WA SECTF - Public Meeting
(January 25, 2021)

Here are some observations from the Monday January 25th Washington State Legislative Task Force on Social Equity in Cannabis (WA Task Force on Social Equity in Cannabis) public meeting.

My top 3 takeaways:

• Task force members wanted a better understanding of how the Washington State Liquor and Cannabis Board (WSLCB) previously handled cannabis business licensing before advising the agency on a new process to vet social equity applicants.
  • One of the task force roles is to advise WSLCB on distribution of “retail licenses that have been forfeited, revoked, or cancelled, or that have not been issued without exceeding the limit on the current licenses” allowed.
  • At the December 2020 task force meeting, questions and criticism of WSLCB prior licensing practices prompted the agency appointee to the task force, Board Member Ollie Garrett, to suggest a briefing by Licensing staff.
    • In November 2020, WSLCB Director of Legislative Relations Chris Thompson provided state senators with an agency perspective on the history of legalization and described steps WSLCB had already taken in response to allegations of discrimination.
    • In October and December 2020, WSLCB Director of Licensing Becky Smith provided general updates on agency licensing, and discussed retail licensing during agency engagements with BIPOC communities.

• WSLCB Director of Licensing Becky Smith reviewed a history of adult use and medical cannabis policymaking, the retail license allocation system, local bans and moratoria, requirements to operate a retail shop, and the social equity licensing program.
  • Initiative 502 (audio - 6m, video, presentation). Smith began with an overview of the 1996 medical and the 2012 recreational cannabis ballot initiatives that shaped the state’s early market, noting that Initiative 502 “laid the foundation for application requirements.” She described the original implementation timeline for legal cannabis, which included agency educational seminars to train potential licensees on a process they “had not experienced before.”
    • Smith described 7,000 initial license applications from 2013, including 5,000 for producer and processor licenses and 2,000 for retail store locations, which was “more than I thought we’d receive.” 
    • She emphasized that producers and processors could be located “anywhere in the state of Washington” provided applicants “meet requirements.” With 5,000 production/processing applicants, Smith said that staff had to “step back” to reevaluate “how many we were going to process,” dropping repeat applicants and asking them to pick between three production tier sizes.
    • The 2,000 retail applicants were asked to complete a “pre-screen,” Smith told the group. This included financial vetting for true parties of interest (TPI), age, and residency requirements. She said applicants’ proposed premises had “to meet the 1000 foot distance requirement.” Smith described a required “right to real property” in the form of “a signed intent [to lease] by a landlord” if the applicant didn’t own a business location outright. This left “a lot of work on the retail applicant’s part in order to get into” the WSLCB retail lottery process, Smith acknowledged. She reported that 1,174 applications qualified for the lottery for 334 retail locations, which had been capped based on jurisdiction and population size. For most applicants, their “address really chose their jurisdiction for them,” Smith remarked, adding that 47 jurisdictions didn’t need a lottery as “we didn’t have as many applicants as we did allotments.”
  • SB 5052 (audio - 4m, video). The next licensing opportunity was created by 2015 legislation titled the Cannabis Patient Protection Act, which merged the state’s medical and recreational cannabis systems, Smith explained. The law opened a new six month application window for retailers only and expected WSLCB to “set a number of new licenses based on what was necessary to meet the medical needs” of patients, she observed, including a “three tiered system for prioritizing” the 222 allotments added. Beyond applicant information, Smith said the agency used information from the Washington State Department of Revenue, “Employment Security (Department), and some of the cities to verify priority.”
    • First priority applicants “applied for a marijuana retail license prior to July 1, 2014, operated (or were employed by) a collective garden prior to January 1, 2013, have maintained a state and local business license and have a history of paying state taxes and fees.” Smith said 387 applicants qualified under these criteria and “262 were licensed, 125 were withdrawn, and 50 of which were never assigned.” The licensed businesses exceeded the increased allotment “because there were jurisdictions that in I-502 that nobody applied for” during the initial lottery, she stated.
    • Second priority applicants “operated (or were employed by) a collective garden prior to January 1, 2013, have maintained a state and local business license, and have a history of paying state taxes and fees.” Smith explained that 76 applicants were in this category and the agency acted unilaterally to withdraw their applications. 
    • Third priority applicants “don’t meet the first or second criteria.” Smith told task force members this was “everybody else.” 1,253 applicants in this category all had their applications withdrawn by WSLCB as well. 
  • License Allocations (audio - 8m, video). Smith noted that the WSLCB implementation of legalization and initial assessment of retail allotments featured public engagement efforts in 2013. The Initiative limited allotments “by county” and the “method that we used to determine the retail stores and allocation was established in rule,” she said. Smith clarified that WSLCB staff used population size to allocate most stores to cities, leaving “the remainder at-large throughout the county.”
    • Smith highlighted initial research by BOTEC Analysis on “methods for determining allocation” and a later study Estimating the Size of the Medical Cannabis Market in Washington State.
      • Learn more from BOTEC Analysis Reports for WSLCB, including the spreadsheet used to allocate stores to counties and a user guide.
    • Medical endorsements for retailers were issued by WSLCB based on “criteria” from the Washington State Department of Health (WA DOH), she commented, although an endorsement didn’t mean a retailer “actually had medical product.”
      • RCW 69.50.375 states: “(3) To be issued an endorsement, a marijuana retailer must...(b) Carry marijuana concentrates and marijuana-infused products identified by the [DOH].”
    • When increasing the retail allotments in 2015, Smith said “the ten counties with the highest medical sales” from dispensaries saw their retail cap increase 100% while “other counties received 75%” increases. Areas with bans or moratoriums on cannabis businesses did not receive additional stores, she added, since “we didn’t, at that time, know what that looked like as far as sales” as retailers hadn’t been able to operate.
    • Smith relayed that she was often asked “why didn’t you increase producers/processors at that same time?” She said that University of Washington (UW) researchers evaluated cannabis canopy in March 2016 and found that “given significant difference between the potential value of ten million square feet of canopy space and the current recreational sales” that fully utilizing existing canopy space “was sufficient” for patients and consumers.
  • Local Bans and Moratoria (audio - 4m, video). First looking at store allocations in King County, Smith identified at-large county and city allotments, noting that licensees for one couldn’t relocate into the other. She then showed bans and moratoriums throughout the state according to the Municipal Research and Services Center (MRSC) and noted that local governments were allowed to restrict the number of retail stores further than WSLCB’s license cap. “I think it’s important for...the task force to be aware of those limitations,” Smith remarked.
    • She indicated that an opinion from the Washington State Office of the Attorney General (WA OAG) validated local government authority to “ban businesses” as well as “regulate cannabis businesses through zoning, building permits, and occupancy approval.” SB 5052 allowed municipalities greater flexibility “to modify state requirements,” Smith indicated, particularly around buffer distances for any location except for “schools, or parks, or playgrounds.” Seven counties remained “completely zoned out for retailers,” she commented.
    • Smith explained that retail title certificates were created in April 2018 via board interim policy BIP 04-2018. She said that retailers with locations in banned areas were “screened out right away” but regulations required them to “maintain their location, they had to have security, traceability, insurance, and pay the annual [license] fee.” Title certificates permitted a licensee to avoid paying for certain requirements and if “at some point that restriction or ban gets lifted they have the first right to go in and get licensed in that area,” Smith stated. She added that of 46 certificates issued, six had been reinstated between Clark County and the City of Everett, which she called “a lot.”
      • In 2018, the Board opened rulemaking to make certificates permanent with a projected effective date that September. The project was idle until June 2020 when Policy and Rules Manager Casey Schaufler told board members the BIP was “sufficiently addressing the needs of licensees in local jurisdictions with retail cannabis sales prohibitions.” He asked for withdrawal of the CR-101 on July 8th which the Board approved, closing out the rulemaking project.
      • In September 2020, title certificate holder Angel Swanson and task force Co-Chair Paula Sardinas tried lobbying WSLCB to allow certificate holders to relocate their license to friendlier jurisdictions. 
      • See MRSC’s cannabis web page for information on local regulations.
  • Retail Operational Requirements (audio - 4m, video). Smith reviewed the requirements to maintain a retail license saying stores were “absolutely” expected to be open and operating.
    • She noted “Licensing reviews, on a monthly basis, the sales data reports that come in for cannabis retailers.” Closed retailers were expected to provide documentation to Smith’s staff “to qualify them for an exemption.” When WSLCB began tracking this in 2017, 129 retailers were found to be non-operational. That number had subsequently been lowered to 45 and were mostly due to “local prohibitions” or “permitting issues.”
    • Smith shared the open allotments in the state, distinguishing between allotments in areas with bans or retail caps, and other locations without such restrictions. The social equity program in law directed WSLCB to license equity applicants “who meet the requirements” using “forfeited, revoked, or cancelled” licenses and those that had not been issued, she said. However, Smith noted the law expressly barred an increase in total store allotments by WSLCB absent legislative approval. “Although the Board has the ability to move allotments, we have not done so as of today” as the agency was trying to respect an expectation that allotments “reflect the population.”
    • Of the 36 open allotments, Smith told the task force that only 15 weren’t restricted by local governments. Those potential equity licenses were ready to be issued “once the task force provides us with information on” applicant requirements.
  • Social Equity Program (audio - 10m, video). WSLCB representatives had worked with stakeholders and other agencies on HB 2870, the social equity law, “in response to growing awareness that the existing cannabis laws created unintended barriers for people of color.” She went through some expected qualifications for applicants, including majority ownership of the license by an equity applicant, a social equity plan for the business, “the composition of the...workforce the applicant intends to hire,” and a focus on helping neighborhoods considered “disproportionately impacted areas.”
    • Smith said the task force could help the agency by providing “guidance” for rule development and policies to “fairly implement the law and address the concerns of the public.” Additionally, she communicated that WSLCB staff welcomed broader input from the group to assist with improving equity at the agency.
    • Looking at the agency’s BIPOC engagements, Smith said the events provided a venue to gather feedback which had already resulted in reforms at WSLCB.
      • Potentially changing the criminal history requirements and review process
      • Evaluation of opening producer/processor licensing for social equity purposes
      • Review of barriers in the licensing application process
      • Outreach to areas with bans and moratoriums
      • Development of equity resources and providing staff trainings
  • Smith explained that staff had met with representatives of the Association of Washington Cities (AWC) to connect with cities that may have an interest in ending a ban on cannabis retail. She said all cities with a ban or moratorium were contacted to assess which were “interested in hearing more information” and which remained committed to prohibitive practices. Some government officials expressed interest in more information from WSLCB, Smith stated, but others “were like, ‘Not in my city, not in my town.’”
  • She added that Licensing staff were committed to better “translation services” and more consistency in responses to licensees. “We want to build a relationship and we want to build trust from our communities,” Smith said.
    • During the December 2020 meeting of the WSLCB Alcohol Advisory Council, Smith said the agency made sure “we are providing information in other languages” as a social equity improvement (audio - 5m).

• A long question and answer session from task force appointees and the public ensued including criminal history considerations, local retail bans, calls for a new canopy survey to assess whether potential equity production and processing licensees could succeed in the state’s cannabis market, and more.
  • Co-Chair Melanie Morgan asked if municipalities with cannabis bans and moratoriums permitted sales of tobacco and alcohol. Smith confirmed all did (audio - 1m, video).
  • Raft Hollingsworth, a task force appointee representing licensed producers, wanted to know if the 15 viable allotments were the only option for retail store siting. Smith responded that they were but task force recommendations could change that, although increasing the total allotments required legislative action (audio - 2m, video).
  • Monica Martinez, another task force appointee representing licensed producers, asked how many applications “were denied for exceeding criminal history points” and if any were approved “exceeding the eight point threshold when prior convictions were cannabis related.” Smith told her that “when we first began licensing, we had the authority and the ability to waive...criminal history that had to do with marijuana related offenses” (audio - 1m, video). 
  • Martinez followed up to ask whether new licenses during the medical merger had gone to individuals already holding cannabis licenses, and Smith confirmed that some had (audio - 1m, video).
  • Martinez also inquired whether title certificate holders were the same as non-operational retail licenses to which Smith replied they were “separate” (audio - 1m, video).
  • Garrett brought up the demographics of retail title certificate holders and Smith responded that 30% were identified as “people of color” (audio - 1m, video).
  • Christopher Poulos supported changing the criminal history point system for applicants and offered to assist the agency in doing so (audio - 1m, video).
  • Pablo Gonzalez asked about the last time the agency had studied cannabis canopy, and whether it could be evaluated again in “the near future.” Smith told him she didn’t know of a schedule for further study but staff had begun considering it (audio - 2m, video).
    • The WSLCB year 2 canopy report was created in June 2018. Cannabis Observer previously acquired Director’s Office Division Policy #550 (“Surveying Cannabis Canopy”) and #550A-1 (“Preparing and Conducting the Canopy Survey”), both dating from January 2018, which provided general guidance to Canopy Program Specialists.
    • The agency previously allowed producers to request expansion of their permitted canopy to the maximum allowed by their tier size.
  • Jose Barajas later restated the need for a new cannabis canopy study (audio - 1m, video).
  • Morgan asked how many producers and/or processors had failed (audio - 2m, video) and confirmed neither license type could sell directly to the consumer (audio - <1m, video).
  • Gonzalez validated that only processors or producer/processors could sell to retailers because the State’s tiering model constrained wholesale transactions (audio - 1m, video).
  • Carmen Rivera asked if there were demographic data on licensees who had gone out of business, and Smith said there were (audio - 1m, video). Martinez followed up to comment on the difficulties existing producers faced, speculating “small farmers and minority owners are probably the ones that aren’t making it” in the market (audio - 1m, video).
  • A question submitted by “Clay” dealt with what citizens could do if their local government had a cannabis ban or moratorium in place. Smith advised they raise the issue at local, likely virtual, public meetings (audio - 1m, video). He later asked about prioritization for equity applicants compared to retail title certificate holders. Smith said certificate holders were prioritized for municipalities with bans or moratoriums (audio - 1m, video).
  • Edgar Castaneda wondered how community outreach would be conducted due to the coronavirus pandemic, and Smith referenced the agency’s virtual public meeting schedule (audio - 1m, video).
  • A question was raised about reallocating inactive producer and processor licenses to equity applicants. Smith replied that agency staff were “looking at” that but warned it was "a pretty competitive process" amidst 930 active wholesale licenses. She noted WSLCB staff needed more proficiency in supporting new businesses (audio - 1m, video).
  • Michael Gordon (audio - 1m, video).
  • An attendee wanted to know if barriers would be in place to prevent equity licensees from being exploited (audio - 1m, video).
  • Veronica Abraham asked about the 2015 allotment increase (audio - 1m, video).
  • Henry Garrett asked about equity licenses for the Black community and potential mentorship for new businesses. Lead task force staffer Christy Curwick Hoff said the subject would be addressed in a task force work group (audio - 1m, video).
  • A former license applicant named Baljit Bassey asked why some priority one applicants had been withdrawn from consideration. Smith answered that some had requested to be withdrawn. Baljit said his priority one application was withdrawn without his “even being asked” and he found the process difficult and discriminatory (audio - 5m, video).
  • Crystal Oliver, Washington SunGrowers Industry Association (WSIA) Executive Director, commented that cost wasn’t the only obstacle producers faced before asking about “changes in the structure of the marketplace” to make producers more independent. Smith responded that the agency needed and welcomed producer feedback (audio - 1m, video).
  • Hollingsworth then brought up vertical integration, and Smith remarked that a restriction on the practice was in statute and would need legislative change. Hollingsworth said that “not everyone follows those tenants...if you have enough money there's a ways around that” (audio - 1m, video).
    • In the event chat box, Ramsey Doudar of Patients and Users for Reasonable Policy typed “HB 1260 would address this. It would allow for the formation of craft grows that can also sell their own product, and social equity applicants would receive priority licensing. The bill needs to move to a public hearing.” Doudar wrote about the bill on January 23rd.
  • Jferrich Oba, a former applicant, wanted to know if there was “legislation concerning admitted racism towards Blacks and minorities has taken place within the LCB" (audio - 3m, video).
  • Sami Saad, former Owner of 12green (audio - 3m, video).
  • Adam Powers, a Black Cannabis Commission (BCC) Board Member, asked how WSLCB would be evaluating recommendations from the task force, particularly around retail allotments (audio - 2m, video).
  • Mike Asai of the former Emerald City Collective Garden (ECCG) asked about Seattle allotments (audio - 1m, video) as well as past applicant refunds (audio - 1m, video).
  • Aaron Barfield, Black Excellence in Cannabis (BEC) Co-Founder (audio - 1m, video; audio - 1m, video).
  • Paul Brice, Happy Trees Owner, had a question on prioritization of past applicants (audio - 1m, video).
  • Andre Felton (audio - <1m, video).
  • Wrapping up, Garrett commented on WSLCB’s demographic information on producer and processor ownership (audio - 1m, video) before thanking Smith and assuring her fellow task force members that WSLCB was holding on issuing new licenses “or doing anything that could contradict with what we’re trying to do here as a task force.” She said the agency was “eager to work with the task force and to hear and get recommendations” from the group “in order to move forward” (audio - 2m, video).

Here are some observations from the Monday January 25th Washington State Legislative Task Force on Social Equity in Cannabis (WA Task Force on Social Equity in Cannabis) public meeting.

• The leader of a new task force work group proposed a method to allocate technical assistance grant program funds to existing minority-owned I-502 businesses before the current appropriation expired.
  • While the social equity program the task force was designed to advise on was administered by the Washington State Liquor and Cannabis Board (WSLCB), the technical assistance grant program included in the enacting law would be organized by the Washington State Department of Commerce. 
    • The grant program was included in WSLCB request legislation developed in partnership with Commerce leadership in September 2019.
    • The legislation had been developed significantly by the time it was signed into law in March 2020. It included the grant program, which was encoded in statute as RCW 43.330.540, to “provide technical assistance grants to marijuana retail license applicants under the [WSLCB Social Equity] Program.” Activities eligible for funding included, but were not limited to:
      • Assistance “navigating the marijuana retailer licensure process; marijuana-business specific education and business plan development;”
      • Training for regulatory compliance, financial management, and assistance in seeking financing;
      • Connecting applicants “with established industry members, tribal marijuana enterprises, programs for mentoring, and other forms of support approved by the LCB.”
  • The supplemental biennium budget allotted WSLCB $348,000 from the Dedicated Marijuana Account (DMA) for fiscal year (FY) 2021 to implement the new law. Commerce was appropriated $1,100,000 as an annual DMA appropriation in RCW 69.50.540(1)(i) “to fund the marijuana social equity technical assistance competitive grant program.” The final fiscal note followed the bill’s passage with revised costs for the WSLCB, the Office of the Attorney General (WA OAG), and the Governor’s Office.
  • At the inaugural meeting of the task force in October 2020, lead staffer Christy Curwick Hoff explained that Christopher Poulos would represent the Department on the task force. At the following meeting in December 2020, several work groups were established, including the Technical Assistance Grant/Mentorship Work Group. Licensed producer Raft Hollingsworth offered to lead the group, retailer Pablo Gonzalez expressed an interest in joining, and Co-Chair Paula Sardinas floated the idea of enabling current minority licensees to apply for the funding (audio - 1m).
  • WSLCB Director of Legislative Relations Chris Thompson discussed the grant program as a factor in the agency’s biennium budget negotiations when talking to the Cannabis Advisory Council (CAC) on January 6th (audio - 4m).
    • He stated that since the start of the social equity program was “significantly delayed” agency staff raised concerns with the Governor’s Office and the Washington State Office of Financial Management (WA OFM) at a “very late stage of the budget development program.” The FY 2021 appropriation of $1.1 million for the technical assistance grant program could be lost as “there was a good likelihood that those funds would not be able to be awarded prior to the end of the fiscal year,” Thompson said. In order to avoid a “loss of funds to the program,” WSLCB asked that the Governor’s proposed budget include “an effort to try and recapture those funds for this program out into the next biennium.” This was added into the final proposal, he continued, with “half into each fiscal year.” This would allow the grant money to be used when WSLCB and Commerce implement “the guidance from the task force,” Thompson added.
  • Towards the end of the January task force meeting, Hollingsworth said he had organized a meeting “with minority-owned I-502 businesses just about technical assistance” and the allotment of the first year’s grant money in the week following the task force’s December meeting (audio - 5m, video).
    • He told task force members the group included “most of” the state’s “Black-owned cannabis shops...and the consensus was before we allot these new social equity licenses we should support” existing cannabis businesses “that fit the social equity criteria.” Hollingsworth argued there had been public support to use grant funding for producer and processor licenses, and that ahead of bringing new licenses into the cannabis market, state officials should “create a system that’s going to support those licenses.” Allocating grants for current businesses “would support them and, and would create a system of mentorship” for successful equity applicants .
    • The group composed and sent a letter to task force members to “communicate the urgent need for the social equity task force to act. We feel the $1.2 Million in technical assistance funding that is earmarked for HB 2870 can help assist I-502 Washington small businesses.” After describing hardships induced by the pandemic and spending guidelines, the letter suggested “the first success of the task force can be the issuance of this grant money to help save those already operating in this space.”
    • The letter included the following signatories:
      • Tamara Berkley, Natural Blessings Recreational Marijuana Owner and task force retail appointee
      • Aaron Bossett, Black Cannabis Commission Founder
        • Bossett was a member of the CAC, last attending in December 2019.
      • Paul Brice, Happy Trees Owner
        • Brice participated in all task force meetings and WSLCB BIPOC engagements.
      • Darlene Conley and Julius Debro, JD Associates Tacoma
        • Conley was identified by Co-Chair Paula Sardinas as having had her cannabis license reinstated. Conley and Debro own Social and Economic Equity and Diversity (SEEDS) for African Americans in the Legal Cannabis Industry, a tier 1 producer in Tacoma.
      • Duane Dunn, Emerald Leaves
      • Emmanuel Frayer, Natural Mystics LLC, doing business as Lucid Lacey and Olympia locations
      • Joy Hollingsworth, Co-Owner of Hollingsworth Cannabis and Hemp Company
        • Joy Hollingsworth was also Chief of Staff at FMS Global Strategies, Sardinas’ lobbying company.
      • Raft Hollingsworth, Co-Owner of Hollingsworth Cannabis and Hemp Company
      • Stan Johnson, Green Solution Place Preludio Management doing business as Lucid Auburn, and Timberline Development doing business as Lucid Puyallup
      • Dennis Turner, Alkaloid Inc doing business as Lucid North Cannabis, and Green Solution Place doing business as Lucid Cheney
    • “We kept asking [Director of Licensing Becky Smith] ‘how serious would you take these recommendations?’” Hollingsworth explained, wanting a commitment before the task force drew out the process for businesses that met the social equity criteria. “We can send this recommendation to the LCB immediately and we can see just how, how real our recommendations, and how much water and weight they’re going to hold with the LCB,” he said. In addition to helping existing businesses, this would “do as the laws initially intended” by furthering market stability for eventual social equity licensees. Hollingsworth called for action “right now” to approve the recommendations, saying it would be “a huge first step” for the task force. Then, he made a motion “to allocate those technical assistance grant dollars to existing I-502 businesses...that would fit the social equity criteria.”

• Before considering the motion, legislative members appointed to the task force presented an update on possible revisions to the group’s mandate and addressed the appropriated grant money.
  • Co-Chair and Representative Melanie Morgan said, as her staff worked with Senator Rebecca Saldaña and her team, they had “come to the conclusion that House Bill 2870 has really put some barriers around this task force.” She reported that Saldaña’s staff had “crafted some language” for legislation “to widen our scope of work that we were tasked to do” (audio - 3m, video).
    • Hoff laid out several obstacles, including the enacting law’s “place-based approach” which defined and emphasized "disproportionately impacted areas." Unfortunately, she said definitions of place were complicated by “gentrification and some of the just, the technical ways” the areas were “defined in the legislation.” Despite repeated requests from stakeholders that “licenses get into the hands of...the Black and Brown communities that have been harmed by enforcement,” Hoff felt a "race-conscious or a very race-specific approach" was beyond the law’s language. She said the law utilized “proxy indicators” which “quite frankly...other states and other counties that have tried to do that same approach, they’re not really succeeding, and the licenses aren’t getting into the hands of those that they want them to.”
    • In 2019, media coverage reported on complaints around cannabis equity policies in Los Angeles and Massachusetts from applicants and some officials.
  • Saldaña outlined the “framework” she was developing into legislation which featured the issue being raised by Hollingsworth (audio - 5m, video).
    • “We do have the ability on retail...to make recommendations right now on social equity,” she commented. Saldaña intended to “make sure that we secure that fund for the purposes of what is in the spirit” of Hollingsworth’s letter “to make sure that the current owners and operators and producers” should be considered “an asset and a strength” of the current market. She didn’t want to lose “leaders and pioneers” in the cannabis sector who were “still fighting” from within the industry.
      • Allowing current license holders access to the grant money was an idea advocated by Sardinas and a certificate holder to WSLCB in September 2020.
    • Saldaña backed creating an “incubator space” and equity licensee mentor program for what she called a “capital-heavy industry."
    • She highlighted retail title certificate holders as having “early pilot” potential for the “first round” of social equity licenses and backed allowing certificate holders to move their licenses to “ready partners” in receptive jurisdictions. She looked forward to having legislation “introduced as a vehicle” to improve the program.
    • Hollingsworth was in favor of the effort, and Morgan asked Hoff to draft a motion on the recommendations.
    • WSLCB appointee to the task force Ollie Garrett asked if the proposed motion was “going to be random, all certificate holders, or certificate holders based on qualifying under social equity?” Saldaña answered that “what we’re looking for is Black, Indigenous, People of Color” (BIPOC) which included “about 14” of the retail certificate holders (audio - 1m, video).
  • Four days after the task force meeting, Saldaña introduced SB 5388 - “Concerning social equity within the cannabis industry.” On February 1st, Morgan sponsored companion legislation in the House, HB 1443. That bill was scheduled for a public hearing in the Washington State House Commerce and Gaming Committee (WA House COG) on Friday February 5th following a work session “Update from the Social Equity in Cannabis Task Force” on Thursday February 4th.

• A lengthy discussion among task force members and staff resulted in the proposal and adoption of two motions recommending modification of qualifying criteria for equity applicants and the technical assistance grant program.
  • Hoff displayed a draft proposed motion which “doesn’t reflect the full conversation that we’ve had” and shared uncertainty regarding “how to do that, cause I’m not sure where we’ve landed on our proposed motion.” The wording addressed changing equity applicant criteria “from one based on place to one based on race” but didn’t speak to the grant money, she noted (audio - 5m, video). 
    • Hoff asked if recommendations to the Department of Commerce about the technical assistance grant program should be added to the current motion. Morgan stressed that they didn’t intend to “delete” the criteria in law so much as expand “how to choose” them, and asked Saldaña to weigh in. Saldaña was receptive to modifying applicant criteria, which she believed should be voted on separately from task force recommendations about the grant funding.
    • Saldaña outlined wording for “current retailers, processors, operators, all licenses” who “identify as BIPOC and would possibly qualify under the social equity framework” to be considered “eligible for some technical assistance and can be part of a mentorship program.” Businesses that fit the existing criteria and “have made it this far” shouldn’t be pushed out of the market “by COVID or other things,” she remarked.
    • Saldaña wanted guidance to support minority-owned cannabis license types besides retail and “to be sure that we’re building an incubator” for new licensees along with “resources and staffing to make that successful.” However, she admitted that it “was a little gray” as to whether the task force’s existing mandate allowed for input to WSLCB on current licensees and non-retail licensing.
  • An urgent and at times hard to follow discussion amongst task force members ensued as the three hour meeting ran over its allotted time (audio - 6m, video).
    • For the 2021-23 legislative biennium, Hollingsworth asked for language on a separate motion to ask Commerce to allocate the technical assistance grant money “now, today.” Hoff said the allocated money was “specifically for the technical assistance grant program the way that it was written in [HB] 2870...and you can’t just take an allocation and do something else with it” unless the legislature gives the disbursing agency “very specific authority.” For this reason she believed new legislation would have to be passed in order for the proposed motion to have the intended impact.
    • Morgan supported drafting another bill to revise the task force’s power “to really do our equitable work.” Due to approaching legislative deadlines she said “we need to decide today” what any recommendations would look like. “I feel like we’re trapped inside the current bill that we’re working on,” she said, “and would love to give us more room to move.”
    • Gonzalez wanted to know the “criteria for these grants,” stating “if we are going to do this...I don’t think that, you know, that the ‘big guys’ that have more than one or two stores” should be eligible for grants. He was concerned that giving grants to “people that have already gotten licenses,” even himself, could be interpreted as “a disservice to, to the taxpayers.” Hoff commented that existing language in the law “provides the criteria for who” could receive social equity grant dollars and the motion draft would be requesting that “current licensees, not just new licensees, to be able to apply for that.”
  • Task force appointee Cheri MacLeod asked that the motion addressing the grant program “continues with the initial intent of that money” while incorporating the concerns in Hollingsworth’s letter on allowing “qualifying current licensees” to prevent the change from “being an open bank” for any cannabis businesses. Hollingsworth agreed, Hoff showed a revised motion draft, and Brice asked for assurance that changing the language didn’t mean retailers would lose out on future grant allocations. Asked about the possibility of losing the 2021 funding by Garrett, Hoff gave her understanding that “the current appropriation is for this current biennium and Commerce cannot actually start giving out the dollars because they’re still waiting” for WSLCB’s social equity program to start. “The appropriation for the current biennium, which ends at the end of June, is likely not going to be able to be used the way that it was appropriated for,” she reported, but “another $1.1 million in the next biennium” would be available as the program was “an ongoing appropriation” (audio - 5m, video). 
  • As the meeting ran long, Morgan excused herself and asked Saldaña to serve as acting chair (audio - 13m, video).
    • Saldaña observed that the task force had the authority to “make this recommendation to LCB and Department of Commerce” but their power was focused on retail and “the universe of the licenses.” To that end, she said that the group could advise that “qualifying current licensees [and] certificate holders can also receive technical assistance grants.”
    • Saldaña said it also sounded to her like there was support for “legislation that will authorize [us] to look at other licenses” owned by BIPOC individuals “to be part of a mentorship program incubating going forward.” She suggested a recommendation to WSLCB about the program qualifications, and a separate recommendation to lawmakers “to authorize the task force to be able to have more jurisdiction over other pieces.” Moreover, Saldaña considered this to align with the task force operating principles adopted at the December 2020 meeting as it kept “the impact on Black Washingtonians in particular” centered in the group’s decision making.
    • Hollingsworth asked if the group still had enough members present for a quorum. After staff confirmed they did, Saldaña read the first motion: “The task force recommends changes to the underlying criteria for social equity applicants from one that is not just place-based to one that allows for specific prioritization based on race.”
    • Next, Saldaña read the second motion: “The task force recommends changes to the underlying social equity grant program to ensure that qualifying” licensees of any type and title certificate holders could apply for the grants. She said the motion would “defend” the existing funding by calling for “legislative action.” Martinez confirmed that “disproportionately impacted areas” stayed as a criteria for applicant consideration but MacLeod warned that it would be difficult to “identify the areas as the legislation has put up for us as [a] framework.”
    • A member of the public didn’t get an answer when they inquired “how many task [force] members would benefit off this motion?”
  • Hollingsworth moved for a vote on the social equity applicant criteria and was seconded by Michelle Merriweather. The task force voted in favor of the measure with the exception of Gonzalez who opposed it (audio - 1m, video).
  • The next motion pertaining to the technical assistance grant program criteria was also proposed by Hollingsworth and seconded by MacLeod. Again the only dissenting vote was Gonzalez (audio - 1m, video).