WSLCB - Board Meeting
(December 9, 2020)

Here are some observations from the Wednesday December 10th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Policy and Rules Coordinator Casey Schaufler proposed rules which would implement cannabis vapor product legislation.
  • HB 2826 Implementation (Rulemaking Project, audio - 4m). Schaufler spoke to the background of the project to implement HB 2826 at the December 8th Board Caucus. He explained that the proposed rule change would add new definitions to WAC 314-55-010, create a new section “outlining the Board’s processes for regulating cannabis vapor products,” and codify “currently active” emergency rules requiring ingredient disclosure to the Washington State Department of Health (DOH).
    • Liz Clement, DOH Policy Analyst with the Division of Prevention and Community Health, had been conferring with WSLCB Policy and Rules Manager Kathy Hoffman on the development of the draft vapor product disclosure form.
  • Schaufler claimed that “administrative costs for licensees” had been considered and were “not expected to exceed any of the thresholds for more than minor costs as defined under” the State’s Regulatory Fairness Act.
    • “Minor cost” means a cost per business that is less than three-tenths of one percent of annual revenue or income, or one hundred dollars, whichever is greater, or one percent of annual payroll.
  • The Board adopted the CR-102 which projected a public hearing would be scheduled for February 3rd, 2021.

• The public hearing on proposed rules for location compliance certificates elicited a single citizen comment.
  • Location Compliance Certificates (Rulemaking Project, audio - 1m). The new certificates were mandated by SB 6206 which was signed by the Governor in March 2020. WSLCB’s Board then opened a rulemaking project on July 8th and approved the proposed rule language on October 28th. Schaufler explained that the enacting legislation behind the rule was “designed to prevent a competitor from opening a business that would disqualify another marijuana entity's license application.” The agency would issue “a certificate of compliance to an applicant if proposed business premises meet the minimum distance requirement as of the date of [sic] application was received by the Board.” He said no comments had been made since the CR-102 was filed. The Board had no questions nor remarks before hearing from the sole commenter.
  • Jim MacRae, HI-Blog (audio - 3m). MacRae discussed a “well-known incident that’s relevant to this” where an “established retailer in Seattle” temporarily thwarted the opening of another cannabis shop “very, very close to them” by opening a “small arcade...a play place for children” in order to “nullify” the competitor’s application. He said SB 6206 was proof lawmakers recognized the “really unreasonable risk for people that were trying to start retail licenses” to have a cost and time intensive application process nullified by anyone opening “an arcade, or school, or something right beside them” prior to “completure of the licensure process.” MacRae commented that he’d learned of the situation “in about 2015” at a meeting of the Coalition for Cannabis Standards & Ethics (CCSE) where a WSLCB Enforcement Officer who was asked about the tactic gave an answer that “shook me to my core.” He said the officer called it “a brilliant move on the part of the licensee from a competitive perspective.” MacRae concluded by saying he was “glad that after all these years that is being changed” as it would make “life much more predictable for applicants.”

• During general public comment, Jim MacRae amended a history of the Board’s awareness of the vapor associated lung injuries health scare and prompted Board Chair Jane Rushford to announce the Cannabis Advisory Council may convene on the cusp of the 2021 legislative session (audio - 4m).
  • MacRae started off by noting Rushford’s announcement that she would not seek another term on the Board beyond the expiration of her six-year engagement in January 2021 and wished her “all the best going forward beyond that time.”
  • Recalling that HB 2826 arose from a “series of emergency rules that were put in place” in October 2019 restricting sale of flavored vapor items, MacRae called attention to the CR-102 memorandum timeline which showed the agency engaged with the topic after Governor Jay Inslee’s executive order in September 2019. He suggested that the Board’s awareness of the Vaping Associated Lung Injury (VALI) outbreak in Washington wasn’t “properly captured” in rulemaking materials. MacRae pointed to an August 2019 prevention roundtable organized by WSLCB and attended by Rushford, Public Health Education Liaison Sara Cooley Broschart, and others a month before the executive order. “Towards the end of that meeting,” MacRae said, “there was a very lively discussion...about the emerging vaping injuries” which would “seem to be the first time” agency staff were made aware of the situation. He noted that representatives from the City of Seattle and others present “had already begun doing things to address this.” MacRae thought it would behoove the agency to recognize “that the Board’s awareness of the issue did pre-date the Governor’s” official action on it.
  • MacRae lauded the Board for hosting their December 9th Executive Management Team (EMT) meeting, the first since September 16th, and complimented the “very broad” agenda which would cover “an awful lot of important things.”
  • MacRae was “disappointed” that 2020 would conclude without convening the WSLCB Cannabis Advisory Council (CAC), which last met in December 2019. He underscored that a recent Alcohol Advisory Committee (AAC) meeting demonstrated that “there’s some means by which the LCB can implement legislative input after the September deadline” to propose agency request legislation to the Office of the Governor for review. MacRae asked that CAC members be afforded the opportunity to give “any input that might impact your legislative framework” for the 2021 legislative session.
    • Rushford voiced gratitude for MacRae’s remarks and shared her understanding that a CAC meeting was “coming up in January.” Executive Assistant Dustin Dickson reported that the meeting was not “officially on the calendar yet” but staff were “looking at January 6th.” Rushford added that “there’s been so many moving parts this year with many big subjects” including COVID-19 policy allowances, social equity outreach, the Washington State Legislative Task Force on Social Equity in Cannabis, rulemaking forums, and “many other” extenuating circumstances (audio - 1m).