WSLCB - Webinar - Advocacy and Rulemaking
(November 12, 2020)

Here are some observations from the Thursday November 12th Washington State Liquor and Cannabis Board (WSLCB) Advocacy and Rulemaking webinar for “community prevention and public health partners.”

My top 3 takeaways:

• Policy and Rules Manager Kathy Hoffman provided a breakdown of the WSLCB’s rulemaking process and suggested preferred ways to advocate to her team.
  • Hoffman’s presentation addressed the rulemaking process first, similar to an overview she offered at the HB 2826 Implementation Listen and Learn Forum on September 1st (audio - 11m).
    • CR-101. WSLCB Policy and Rules staff initiated rulemaking projects by seeking board approval to file a CR-101 with the Washington State Office of the Code Reviser (WA OCR), she explained. Written public comments were accepted during this stage which often included a listen and learn forum, an engagement innovation introduced by Hoffman.
    • CR-102. Staff then offered proposed rule changes as part of a CR-102 package. Written public comments on the proposed rules were sought, and a public hearing was hosted. These events gave agency staff an opportunity to engage stakeholders, Hoffman said, adding the agency also produced supporting documents “depending on the complexity” of rules under consideration.
      • Supplemental CR-102. Sometimes substantive changes to proposals were necessary. Revision of proposed rules necessitated a new public hearing as would occur with the Quality Control Testing and Product Requirements rulemaking project on November 18th.
    • CR-103. Staff would then present final rules as part of a CR-103 package for the Board to vote on adoption of changes. Hoffman noted documents at this stage included a memorandum addressing comments and describing implementation, all of which conformed to the State’s Administrative Procedures Act (APA).
      • Effective Date. She said that most rulemaking became effective “31 days after filing” with the WA OCR.
  • Distinguishing statutes from regulations, Hoffman made clear that the agency was empowered to modify the Washington Administrative Code (WAC), but laws in the Revised Code of Washington (RCW) could only be changed by the State Legislature. She described the scope of WSLCB rulemaking authority as the definition of “guidelines regarding the product production, processing, and retail sale for liquor, cannabis, tobacco, and vapor products” as well as “penalties and fees where expressly mandated in statute into rules.” For this audience, Hoffman emphasized the agency could not establish rules for “consumer behavior, product consumption” nor how products were handled “once they leave the establishment that the LCB licenses” (audio - 4m).
  • Hoffman provided suggestions for engaging in advocacy at WSLCB (audio - 3m):
    • She encouraged participants to sign up for agency email announcements which covered “any kind of agency activity.”
    • Hoffman said, “I can’t emphasize enough how important it is to participate in the listen and learn sessions” which were now held virtually.
    • She encouraged the assembled public health and prevention advocates to coordinate with WSLCB Public Health Education Liaison Sara Cooley Broschart who served as “a resource for you.”
    • Lastly, “follow board meetings and board caucus sessions” on WSLCB’s website.
      • We would be remiss not to encourage readers to leverage Cannabis Observer to track WSLCB policymaking activity as well as cannabis policymaking events at many other state, regional, and local organizations in Washington.
  • Hoffman said her team favored “substantive comments” that “identifies an issue you have with” a rulemaking project or proposal; “tells us why” it would be a problem; “then offers us factual, unbiased, and verifiable information for us to consider.” She encouraged inclusion of specific references, verifiable facts, and proposed changes towards “a reasonable, new alternative or revision to the alternatives presented.” Hoffman also asked for direct references to “unclear” information or arguments in the agency’s rulemaking materials (audio - 10m).
  • Later, Hoffman noted additional resources including the WSLCB Marijuana Dashboard and how to make a public records request of the agency. She acknowledged agency staff had removed some “licensee specific information” from the WSLCB website due to concerns “that information was being used for some targeted theft and some other criminal activity.” A map of cannabis producer and processor locations was password restricted as “a level of protection” for cannabis businesses (audio - 2m).
    • WSLCB also maintains frequently requested lists of data.

• Hoffman presented rulemaking updates before describing anticipated future rulemaking projects, providing more detail on her interest in revising advertising rules than had been previously disclosed.
  • Hoffman mentioned the agency maintained a rulemaking schedule but emphasized it was still “tentative” (audio - 1m).
  • Tier 1 Expansion (Rulemaking Project, audio - 1m, audio - 1m). Hoffman stated that “sometimes...the landscape of what we’re looking at changes.” The tier 1 expansion rulemaking project had been impacted by the continuing coronavirus pandemic and she couldn’t say “when that rule project will move forward or how.” Undertaken as an effort to “support our tier 1 licensees” (“about 190” businesses), Hoffman emphasized they were “the smallest number of licensees” producing cannabis and she wasn’t certain that “all those licenses are being used.” After hosting two listen and learn sessions then soliciting more input via a survey, Hoffman said to expect a CR-102 “we’re hoping by the first part of December.”
  • HB 2826 Implementation (Rulemaking Project, audio - 1m, audio - <1m). Hoffman said her team was “putting a framework around the way that the Board can prohibit certain excipients that may be dangerous” in cannabis products. She explained that a CR-102 “should be presented to the Board on December 9th” followed by the CR-103 “I’m assuming towards the end of January or early part of February” of 2021.
  • Quality Control (QC) Testing and Product Requirements (Rulemaking Project, audio - 1m, audio - <1m). Hoffman noted this rulemaking project had started in August 2018 and represented “a lot of hard work" towards “adding pesticide and heavy metals testing to the current suite of I-502 tests.” The public hearing was set for November 18th, she commented, and “we assume we’ll have a CR-103 to be presented to the Board early part of January.”
    • Review the long history of the QC rulemaking project in the November 16th Week Ahead. 
  • Location Compliance Certificates (Rulemaking Project, audio - 1m). Hoffman told the group that implementation of SB 6206 would allow retail licensees to open even “if another business that may prohibit their being able to open comes along after they’re already situated and licensed” which “does happen sometimes.” She anticipated the CR-103 would be presented to the Board on December 9th.
  • Hoffman then offered her latest projections for new rulemaking on the horizon.
    • Allowances (audio - 1m). She said that “several temporary allowances to support businesses during COVID-19” were under review to develop “our agency position.” Hoffman wanted the agency to be prepared in the event allowances which would “require a statutory revision” were introduced as legislation. Hoffman added that WSLCB would be “putting together information to share with all of our partners.”
      • Criticism of some temporary allowances had been raised by prevention coalition advocates at WSLCB board meetings on August 5th, September 2nd, and October 28th.
    • 2021 Legislation Implementation (audio - 1m). Hoffman shared her expectation that some bills passed during the 2021 legislative session would necessitate agency action, but she was only aware of one potential alcohol-related bill. Hoffman believed WSLCB was “getting pretty close to the time that we will see” prospective legislation.
      • Legislation pre-filing “starts on the first Monday in December prior to the commencement of the session,” according to the legislature’s Guide to Lawmaking. This year, that would be Monday December 7th.
    • Advertising (Prospective Rulemaking Project, audio - 2m). Hoffman called cannabis advertising rules “something we’re interested in.”
      • She had “found that the method, media, and mode of advertising has expanded - and is expanding exponentially.” Hoffman said social media in particular represented “all the different ways that cannabis advertising is seeping into places that I don't think were really envisioned when I-502 was passed in 2011/2012.” She indicated WSLCB staff wanted to “go back and take a look at those” and declared “we will be opening up cannabis advertising rules" after the legislative session.
      • Hoffman added that she presented on cannabis social media advertising during a Regulators Roundtable “on what LCB was seeing on the social media side and how pervasive that advertising is." She’d asked other state regulators about their efforts, and paraphrased that responses revealed a "very complex and interesting area of regulation” having "complexities and complications with respect to freedom of speech and those types of things." Hoffman predicted her team would be starting a difficult rulemaking project, and asked to “enlist” as much participation as possible from the assembled public health and prevention advocates.
      • Hoffman was later asked when the agency would start its advertising rulemaking project. She responded, “probably after legislative session” so staff could be sure to be “aware of what’s happening in the legislature so that we’ll be poised to be able to begin implementation as soon as possible.” She indicated 2020 advertising legislation, HB 2321 and HB 2350, had put the agency “on the edge of our seats” as to whether or not they should begin desired rulemaking - but neither bill was passed. In 2021, Hoffman would be prepared to file a CR-101 on the topic between “March, April, [and] May.” She encouraged those who observed violations of existing advertising rules to report it to the agency’s Enforcement and Education division, while those with interest in advertising changes should “keep track of the concerns that you’re seeing” and share them with Hoffman’s team. She added that, in her graduate studies, she encountered opinion pieces on advertising impacts but looked forward to creating “really quality data with very few limitations” and with “a really good methodology” (audio - 4m).
      • Hoffman’s last public mention of a potential advertising rulemaking project was in November 2019 after she predicted a “revisit” of advertising rules weeks earlier. In August 2019, Enforcement and Education Chief Justin Nordhorn and Marijuana Advertising Coordinator Matt McCallum planned to arrange a presentation on cannabis advertising for legislators that were “expressing some concerns around the loopholes and how they’re being applied.” At that time, they hoped to address “a lot of grey areas."
      • WSLCB was involved in two lawsuits in 2019 related to advertising by cannabis licensees. Litigation brought by retailer Hashtag Cannabis (19-2-03293-6 SEA) challenged the constitutionality of outdoor advertising restrictions in RCW 69.50.369(2) and WAC 314-55-155(2)(a). In November 2019, a King County Superior Court judge agreed. The lawsuit was subsequently mentioned in the intent of HB 2350 which called for “enact[ing] provisions reducing youth exposure to marijuana advertising by prohibiting the use of billboards for advertising marijuana. While doing so, the legislature also intends to provide more flexibility for the use of signs and advertisements by marijuana licensees at their licensed premises.”
      • Another lawsuit regarding licensee outdoor advertising brought by Seattle Events, better known as Seattle HEMPFEST, was first discussed by board members in June 2019. On September 4th, a Thurston County Superior Court judge rejected the plaintiff’s motion for reconsideration. At publication time, Seattle HEMPFEST’s lawyer in the case, Fred Diamondstone, contemplated an appeal and was raising money to Help Seattle Event's Battle for Free Speech.

• Hoffman revealed a substantial draft policy change regarding Delta-8-THC while addressing inquiries about the agency’s collaborative efforts and spoke of the newly formed Cannabis Regulators Association.
  • Washington State Health Care Authority (WA HCA) Prevention Policy and Project Manager Christine Steele opened the event up to questions (audio - 1m).
    • Steele co-presented the WA HCA webinar on “Impacts of Marijuana Legalization in Washington” on September 29th.
  • Steele asked about other agencies WSLCB was “working directly with” (audio - 4m).
    • Hoffman replied that the agency collaborated with the Washington State Department of Ecology (DOE) on the Cannabis Science Task Force (CSTF), the Washington State Department of Agriculture (WSDA) on Marijuana Infused Edibles (MIEs), and the Washington State Department of Health (DOH) on medical cannabis rules and products. She expected a process of “alignment” would be necessary at DOH should WSLCB update its QC rules.
    • Asked what would happen “if something comes down from the federal level,” Hoffman agreed with Steele that the agency would “absolutely” work with state and federal officials to implement directives like those around vaping and health. Recalling the implementation of Governor Inslee’s executive order on the vaping associated lung injury (VALI) health scare, Hoffman said Broschart “was just instrumental in organizing thoughts between Department of Health, LCB, and then coordinating with the CDC and making sure that we were in alignment with the CDC on what was happening.”
    • Hoffman then pivoted to describe “some of the concerns” around Delta-8-Tetrahydrocannabinol (Delta-8-THC) and “the conversion of [cannabidiol] CBD to THC” drawing attention to “some draft rules” on the compound from the U.S. Drug Enforcement Administration (DEA). Hoffman claimed, “in Washington state, Delta-8 is considered a synthetic” cannabinoid and “under the Controlled Substances Act it is therefore prohibited.” She noted “it sounds like the DEA has come down” to a similar conclusion which would “support what our statute says.” Hoffman said the interpretive statement was the first document she’d authored for WSLCB dealing with “the existence of Delta-8,” adding that “since it is a synthetic...we don’t want to see that in our system.”
      • An interpretive statement seeking the prohibition of Delta-8-THC could distill out unanticipated consequences. For context and analysis on the potential policy change, see Cannabis Observer’s reconstruction of WSLCB email communications and recent mentions of Delta-8-THC.
  • Steele mentioned the Cannabis Regulators Association (CANNRA) which had been announced that day and presented a question on whether there “was any representation for youth access on this regulatory body” (audio - 2m).
    • Hoffman called it “a lovely question,” and spoke of the Regulators Roundtables she’d attended with WSLCB Director Rick Garza and Broschart. She noted other participants included DOH Health Services Consultant Kristin Haley and University of Washington (UW) Department of Health Services Clinical Instructor Gillian Schauer. She concluded that “public health [was] well represented in” CANNRA.
    • Garza last discussed the nascent organization on September 16th, saying CANNRA evolved out of the first Regulators Roundtable in Olympia in early 2017 with Washington, Colorado, Alaska, and Oregon represented. Since then, gatherings occurred in Portland, Boston, Denver, Juneau, Baltimore, and most recently online.
    • The founding members of CANNRA included “principal state regulators from nineteen jurisdictions: Colorado, Delaware, Hawaii, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Dakota, Oregon, Rhode Island, Utah, and Washington.”
    • New York State Director of Cannabis Programs Norman Birenbaum was chosen as CANNRA’s inaugural President and Garza was picked to be the group’s First Vice President.
    • CANNRA’s mission included views that:
      • States weighing cannabis liberalization policies “often...seek out regulators from established markets and programs” and “there has never been an organization to facilitate these interactions or help stakeholders navigate the deluge of biased information and skewed data that is commonly presented as fact.”
      • CANNRA proposed to “identify and develop best practices and model policies which safeguard public health and safety, while promoting regulatory certainty for industry participants” and “strives to create and promote harmony and standardization across jurisdictions.”
      • The group hoped “to ensure federal officials benefit from the vast regulatory and implementation experiences of states across the nation to ensure any changes to federal law adequately address states’ needs and priorities.” In CANNRA’s first news release, Garza was quoted as saying “this body is in position to provide regulatory guidance to the federal government should it move towards declassification of cannabis and legalization nationwide.”

• Responding to a question about other agencies WSLCB was “working directly with,” Hoffman pivoted to describe “some of the concerns” around Delta-8-THC and “the conversion of [cannabidiol] CBD to THC” (audio - 4m).
  • After recalling a previous federal collaboration, Hoffman drew attention to “some draft rules” on Delta-8-THC from the U.S. Drug Enforcement Administration (DEA). She claimed, “in Washington state, Delta-8 is considered a synthetic” cannabinoid and “under the Controlled Substances Act it is therefore prohibited.” Hoffman noted “it sounds like the DEA has come down” to a similar conclusion which would “support what our statute says.” Hoffman said the interpretive statement was the first document she’d authored for WSLCB dealing with “the existence of Delta-8,” adding that “since it is a synthetic...we don’t want to see that in our system.”
  • Hoffman’s interpretation, which had not been previously disclosed, would precipitate a substantial policy change at WSLCB if carried through.
• Cannabis Observer obtained a set of WSLCB emails from September which mentioned Delta-8-THC and hinted that a policy interpretation was in the works regarding the THC isomer.
  • On August 26th, OZ. retail licensee Bob Ramstad sent an email to WSLCB’s Policy and Rules team and WSLCB Licensing Program Specialist for Label Approvals Susan Harrell asking for guidance on a marijuana infused edible (MIE) product sample “having 25mg of...delta-8 THC” which the vendor had claimed was “therefore not subject to the per piece vendor limit of 10mg THC.” The MIE was a Smokiez product, a multi-state brand manufactured in Washington by tier 1 producer/processor Pacific Northwest Consulting, LLC (License #417152, UBI 603350861).
    • At publication time, WSLCB’s list of “Approved Infused Products” included 32 varieties of Smokiez Fruit Chews approved on February 4th, 16 formulated as “Delta 8 250mg THC 10mg CBD - 10 servings” and the other 16 as “THC 100mg Delta 8 100mg CBD 10mg - 10 servings.”
  • On August 31st Ramstad followed up, and Hoffman then forwarded his email to a WSLCB Enforcement and Education customer service address asking, "Can someone reach out to this person and offer assistance?" In a subsequent internal exchange prior to responding to Ramstad, Hoffman admitted, “it’s a really, really complex concern that we’re working on, actually.” Policy and Rules Coordinator Casey Schaufler responded to Ramstad later that day to indicate the agency had received his inquiry and staff were “continuing to look into this.” Schaufler consulted on next steps with Hoffman via chat, who replied, “this is an emerging area for sure - I am not sure if [WSLCB Chemist] Nick [Poolman] has shared his concerns with enforcement yet, but it’s good to get it on their radar this way.”
  • Hoffman went on to claim, “It’s not clear whether Bob is making a formal complaint or asking us for a position on Delta 8.” After Ramstad replied to ask if the product was “reviewed by LCB and approved,” Schaufler thought he was asking for the agency’s position. But Hoffman felt that “the interesting thing is the detail in the message, manifest numbers, etc that move into complaint territory. His follow up email is going there.” The next day (September 1st), Enforcement and Education customer service staff interpreted Ramstad's email forward from Hoffman as a complaint against Pacific Northwest Consulting.
  • Harrell was out of office until the following day (September 2nd), and promptly reported that, “I reviewed and approved in error. I went back through all the Delta 8 mails with the MJ Examiners from September 2018 and although their initial decision was that Delta 8 was not derived from Delta 9 their final decision was that it is therefore would need to comply with WAC. No more than 100mg Delta 8 per package and not more than 10mg per serving same as with Delta 9.” Harrell and WSLCB Compliance and Adjudications Manager Nicola Reid were unsure what their next steps should be with regards to the approved products in the marketplace, but Reid felt “we could work through that when we move to revoke with the [Attorneys General].”
  • Later that day, Harrell proactively reached out to Smokey Point Productions Marketing Manager Ryan Simrock to say, “I would like to schedule a time to discuss your products that contain Delta 8.”
  • Then, she followed up with Ramstad to say “Delta 8 is allowed in products in i502 stores. It is my understanding Delta 8 is derived from Delta 9 therefore will need to follow all applicable rules.” Ramstad followed up to ask what that meant, and Harrell replied, “After reviewing WAC 314-55-095, Delta-8 which appears to be a derivative of delta-9 THC and psychoactive would need to adhere to the limits specified in this section. According to WAC 314-55-095, no single serving can exceed ten milligrams of active tetrahydrocannabinol (THC), which would apply to delta-8.”
  • The next day (September 3rd), Cannabis Examiners Manager Kendra Hodgson and Poolman received an inquiry from Confidence Analytics Director of Operations Pat Reynolds after he saw Ramstad post Harrell’s statement on a message board. “Based on that,” he said, “it would appear that some guidance for labs is needed on this topic? We do not combine our delta-8 numbers with delta-9 numbers because there is nothing in the WAC that says we need to. However, the WAC was written before delta-8 was an issue.” He added, “And what about delta-10? To my knowledge there’s not even a quantitative standard available for delta-10, just a qual[itative] one.” Five days later on September 8th, and after getting up to speed on recent agency messaging, Poolman replied to say, “No changes are required of the laboratories at this time.”
  • Also on September 3rd, Harrell proactively reached out to Bill Thompson “regarding your product lines that contain Delta 8.” At publication time, Cannabis Observer was unable to identify Thompson’s affiliation.
  • At this point, a substantial gap in our interpretation intercedes. At publication time, Cannabis Observer’s public records request on this subject remained open, with the next installment of responsive records expected on November 19th. However, one last record was provided from the end of September which included notes from a weekly meeting of Enforcement and Education Division Marijuana Unit Lieutenants to whom Poolman provided a “Delta-8 Update.” In addition to warning to be on the lookout for Delta-8-THC products in vapor retail stores or gas stations, the notes indicate Poolman was under the impression that “one producer/processor is selling that is exceeding limit” and remained concerned about conversion of “CBD into Delta 8.” He conveyed the agency’s intention to file an interpretative statement with the Washington State Office of the Code Reviser, but the notes indicate “Rules is busy dealing with COVID related, so this will have to wait.”
• Delta-8-THC was already on the agency’s agenda before late August: one year prior, the isomer was listed in an early version of the Quality Control (QC) Testing and Product Requirements draft conceptual rules.
  • In August 2019, the QC draft conceptual rules included a new requirement at WAC 314-55-102 (3)(a)(iii) in the “Potency Analysis” section describing the standard battery of cannabinoid concentration calculations conducted by testing laboratories: “Any psychoactive cannabis derivative intentionally added to the formula of a product must be tested for potency, including but not limited to delta-8.”
  • Whereas in the newer proposed QC rules up for a public hearing on November 18th, that language had been subsequently modified to read: “Any psychoactive cannabinoids intentionally added to the formula of a product must be tested for potency.”
• In the fall of 2019, the WSLCB Cannabis Potency Tax Work Group made note of Delta-8-THC in its report which may have been read by key legislative staff.
  • Washington Traffic Safety Commission (WTSC) Legislative and Media Director Shelly Baldwin represented the WTSC at the majority of the work group’s meetings, and asserted that Delta-8-THC was a blind spot in Washington statute and WAC.
  • In the work group’s final report for the Legislature which dispensed with the notion of taxing cannabis by concentration, mention of Delta-8-THC garnered inclusion (p. 7): “It should be noted that, while delta-9 THC is the most prevalent cannabinoid and intoxicant in the cannabis plant, there are other cannabinoids, for example delta-8 THC, that potentially contribute to the effects or potency of the cannabis plant.”
  • Statutory ambiguity around the THC isomer was not missed by key legislative staff as indicated during Washington House Commerce and Gaming Committee (WA House COG) Staff Counsel Peter Clodfelter’s presentation during the Committee’s September 15th work session. Clodfelter reviewed trends in testing, labeling, and taxation of cannabinoid concentrations in other legal states, showing THC/CBD testing and labeling were very common. He observed other states were “defining THC very broadly as to include all the possible THC that could be in the product” (audio - 10m, video).
• But is Delta-8-THC a “synthetic cannabinoid” only producible through transformation of CBD? While we aren’t scientists nor lawyers at Cannabis Observer, we sought out additional perspectives.
  • Isomerization. From what we can tell, isomers of a molecule contain the same constituent elements in slightly different configurations. Delta-8-THC “has the same chemical formula as Delta-9-THC” but “one of its carbon-carbon double bonds is located in a different position.” It’s our understanding that Delta-8-THC shows up frequently in Delta-9-THC distillates either intentionally or unintentionally as a result of heating processes. Rather than requiring a complicated synthesizing process to transform precursor molecules into Delta-8-THC, isomerization of Delta-9-THC to Delta-8-THC may just require heat. Conversion of CBD to Delta-8-THC and Delta-9-THC appears to be a slightly more complicated process which has been patented for some time by none other than Raphael Mechoulam.
  • Prevalence. The potential presence of Delta-8-THC in distillates added to many cannabis vapor and edible products---intentionally or not---may indicate that the isomer is widespread in the 502 marketplace. Complicating matters, it’s our understanding that there may be variability in the capacity of cannabis testing labs to reliably detect and/or identify Delta-8-THC, which may result in misinterpretation and misreporting as other cannabinoids.
  • Prohibition. It’s clear, so to speak, that Delta-8-THC is a cannabinoid deserving of incorporation into the statutory and regulatory frameworks which have carved out room for the 502 marketplace to flourish alongside the on-going prohibition of cannabis still encoded at the federal and state levels. It’s concerning to consider the State may be inclined to ban the latest cannabinoid to come to the attention of regulators without fuller consideration of what that cannabinoid is, how it comes to be, its true prevalence in the marketplace, and its purported pharmacological and medicinal effects. Prohibition should be a tool of last resort. Perhaps a slightly different configuration of constituent laws and rules would produce more beneficial effects.