WSLCB - Board Caucus
(March 30, 2021)

Here are some observations from the Tuesday March 30th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Director Rick Garza shared thoughts on his testimony the week prior to the Washington State House Commerce and Gaming Committee (WA House COG) and Board Member Ollie Garrett prompted a conversation about agency membership in the Cannabis Regulators Association (CANNRA).
  • Garza recounted aspects of his testimony before the WA House COG during a dedicated work session on March 25th (audio - 3m).
    • Director of Legislative Relations Chris Thompson requested the opportunity to speak to the committee after Garza saw they were “having a work session with its last meeting” on the “future of [the] cannabis industry in Washington state.” Thompson reached out to the committee leadership to see “if time was available for me to give an update.”
    • Following his statements to lawmakers, Garza pointed out that Ohio regulators had joined CANNRA bringing the total number of jurisdictions represented to 27. He also mentioned New York, another CANNRA member, where officials had reached agreement on adult use cannabis legislation.
      • New York has had a medical cannabis program since 2016. Governor Andrew Cuomo first instructed state agencies to study legalization in 2019 following several listening sessions on the topic. Later this same day, the New York Assembly passed the Marijuana Regulation and Tax Act (MRTA) which the Governor was expected to sign promptly.
      • At publication time, New York Director of Cannabis Programs Norman Birenbaum was the president of CANNRA.
    • Garza confirmed CANNRA had affiliated with the Council of State Governments (CSG), whose members included legislators nationwide.
      • The Washington State Legislature is part of CSG West. See the CSG West Executive Committee for the list of Washington legislators in leadership positions within the organization.
    • Garza mentioned social equity as a topic showing “the ability of CANNRA...to work together around policy development.”
  • Garrett reflected that as “a person who wear multiple hats in...other organizations,” she encouraged Garza to “[make] it clear what role you’re in” when testifying whether that be “on behalf of the LCB” or CANNRA (audio - 5m).
    • Garrett was upfront about not having listened to his remarks, but she’d seen “some comments that there was not clarity on what hat you’re wearing.” Garza was open to input on how he could better articulate that distinction going forward. He said, “I'm always an LCB employee” but stressed that he was a leader of CANNRA on behalf of the agency and wasn’t viewing the roles as “separate hats." Comparing it to WSLCB membership in other regulatory groups like the National Alcohol Beverage Control Association (NABCA), he welcomed feedback Garrett had for better conveying that CANNRA was a way for him to “collaborate with the other regulators.” Garza observed that legal cannabis states were “not always in the same place in the systems that we set up" and collaboration through CANNRA was useful on “challenging issues.” 
    • Chair David Postman said, “we often hear questions and even criticisms" that participating in multi-state government organizations amounted to "giving away our sovereignty.” However, Postman noted, “CANNRA doesn’t direct what we do.” Rather, he understood the group provided “an opportunity to share notes and expertise and, and get help” and couldn’t assert any “regulatory authority over Washington state." Others agreed, and Garza stressed CANNRA was a 501(c)(4) nonprofit organization. Postman mentioned that he encountered this concern in “other multi-state efforts and it's just important to make clear this is a professional organization” that didn’t impose “any minimum standards" on participating jurisdictions.
    • Garrett found the discussion about the separation between CANNRA and the agency to be “good clarity...especially since it's new.”

• Garza expounded upon his remarks about the agency’s upcoming delta-8-tetrahydrocannabinol (delta-8-THC) work group, the scope of which seemed likely to encompass all psychoactive cannabinoids.
  • Garza first announced the planned collaboration between WSLCB staff and stakeholders during his WA House COG update on March 25th.
  • He stated that the group would evaluate “what we can do by rule” about the delta-9-THC isomer while also working with WSLCB staff to help develop agency request legislation covering not only delta-8-THC but "all cannabinoids that have any kind of psychoactive effect, or an intoxicating effect." Garza said Initiative 502 singled out delta-9-THC as a regulated cannabinoid, but since then "we've seen this outbreak of new cannabinoids and we need an ability by rule to bring it under regulation like delta-9" and ask the legislature “to codify that.” The Washington State Department of Health (DOH), Washington State Department of Agriculture (WSDA), and other agencies would be included as well, Garza indicated (audio - 1m).
  • Postman wondered if the work group’s deliberations would inform prospective agency rulemaking or help agency staff prepare request legislation (audio - 4m).
    • Garza said Policy and Rules Manager Kathy Hoffman had been working with staff “for the last month if not longer as it relates specifically to delta-8” and that they were weeks away from “bringing something to the Board to look at as far as a draft proposal of how we deal with the issue of delta-8” in agency rules. He expected that the work group would involve “a broader discussion that needs to happen” around psychoactive cannabinoids including “delta-10 and others.” Garza wanted cannabis sector stakeholders and regulatory agencies to “figure out how do we get a hold of all the cannabinoids that may be psychoactive and make sure that they’re being regulated in our marketplace.”
    • Postman commented, "We're not slowing down on the, the work Kathy and her team have been doing...on delta-8,” but acknowledged agency rulemaking powers were limited and a need for legislative action was certain.
    • Garza mentioned the Oregon Liquor Control Commission (OLCC) had appeared before an Oregon state legislative committee “with a bill they put together...that would cover all the cannabinoids” before adding that “New York has done something interesting.” WSLCB staff would evaluate the responses of other states, also "an on-going project of CANNRA."
      • OLCC’s announcement of an Effort to Limit Unchecked Use of Delta-8-THC, Other Artificially-Derived Cannabinoids noted that “The House General Government Committee of the Oregon Legislature is expected to take up the Delta-8- THC issue at a public hearing on Thursday, March 25, where it could consider legislation ensuring that all intoxicating THC products, properly tested and labeled, are sold within the OLCC regulated system and ban the sale of currently non-regulated Delta-8-THC products to minors under age 21.” Materials for the bill, HB 3000, included a public sign in sheet, and presentations from OLCC Hemp and Processing Compliance Specialist Steven Crowley and from Gillian Schauer, a University of Washington (UW) Department of Health Services Clinical Instructor. On March 16th, Garza mentioned that Schauer had been contracted by WSLCB “to help us do some research on this issue and others.”
      • New York established an Industrial Hemp Agricultural Research Pilot Program in 2015 that was later modified into that state’s Industrial Hemp Program. In 2020, the New York Department of Health began a Cannabinoid Hemp Program in order to “regulate the processing, manufacturing and sale of cannabinoid hemp products (products containing cannabidiol or "CBD") in New York State. Responding to the recent production and use of cannabinoid hemp products in the market, the Program implements basic consumer protections to ensure cannabinoid hemp products are properly manufactured, laboratory tested and accurately labeled.” At publication time, the Department had published proposed regulations. The state Office of Addiction Services and Supports also maintained a resource page on Synthetic Cannabinoids. In the New York State Senate, Assembly Bill A6465 “Relates to defining the term synthetic cannabinoid” and was in a legislative committee at publication time.
  • Hoffman took time to mention the inclusion of the Washington State Board of Health (SBOH) in the delta-8-THC work group. She said “this concern extends beyond LCB" and the participation of that agency’s staff could be beneficial to the “overall effectiveness” of the work group (audio - 1m).

• Policy and Rules Manager Kathy Hoffman reviewed the status of agency rulemaking projects and anticipated permanent rulemaking to authorize enforcement of the Washington State Board of Health prohibition against vitamin E acetate in vapor products.
  • Hoffman’s last rulemaking update was on March 17th.
  • Quality Control (QC) Testing and Product Requirements (audio - 2m, Rulemaking Project) 
    • Hoffman said a document responding to public comments on the rulemaking project had been “finalized” and was “well over 150 pages worth of materials.” A study of what QC changes the agency could make through rule as well as potential traceability changes were also being considered. Hoffman promised to “firm up a timeline once we’re fully staffed.”
  • Tier 1 Expansion (audio - <1m, Rulemaking Project)
    • A report on surveys the agency conducted of tier 1 producers would be released “by the end of this week” while discussions around possible rule language continued.
  • Criminal History (audio - 1m, Rulemaking Project)
    • Hoffman explained that after four “fairly lengthy internal drafting sessions” staff were still evaluating “conceptual revisions.” A listen and learn session for the topic was being planned for “last week of April.” Under this possible timeline, she envisioned:
      • A CR-102 with conceptual rule changes in “mid-to-late June”
      • A CR-103 for “finalization” of the rule “in early-to-mid August”
  • Rescission of Board Interim Policy 03-2018 (BIP 03-2018, audio - 2m) 
    • An interim policy on quarantine requirements for cannabis products was adopted by the board in April 2018, mentioned again during citizen comment that December.
    • Hoffman said she would ask the Board for “approval to rescind” the policy “to temporarily lift the requirement that marijuana facilities observe a 24-hour quarantine period prior to transfer of product to other licensees” on March 31st.
    • The interim policy was intended to “address challenges that our licensees encountered” while “the then-new Leaf traceability system was being implemented.” The policy was only supposed to run until the Board adopted rules on the topic---which they did in October 2018---“so the board interim policy is no longer necessary,” Hoffman said.
  • Vitamin E Acetate (audio - 1m)
    • Hoffman said she would also present a CR-101 to start a rulemaking project around enforcement of the vitamin E acetate prohibition in cannabis vapor products. The changes would “add a permanent cross reference” in cannabis retail rules to the SBOH permanent prohibition of the compound in vapor items adopted in October 2020.
    • The WSLCB emergency rule banning the compound was last extended on January 6th, and allowed the Enforcement and Education division to “take disciplinary action against a processor or retailer who sells vapor products containing vitamin E acetate,” Hoffman stated. With the permanent SBOH rule, “we can change references in our rule to the permanent prohibition.” She said the “technical rule project” was unlikely to necessitate a dedicated listen and learn forum.
    • Postman asked about the expiration date of the current emergency rule. Hoffman replied the Board would “have to renew that one more time, it expires in April” (audio - 1m).