WSLCB - Board Caucus
(April 27, 2021)

Here are some observations from the Tuesday April 27th Washington State Liquor and Cannabis Board (WSLCB) board caucus.

My top 3 takeaways:

• Before releasing the agency’s policy statement on derived cannabinoids, the board and staff talked about how they’d heard “mixed messages” on the topic from licensees.
  • The most recent WSLCB evaluation of the compound delta-8-tetrahydrocannabinol (delta-8-THC), a delta-9-THC isomer which can be created from cannabis or hemp isolates, was undertaken by the agency in 2020. Staff looked at whether delta-8-THC could be regulated under RCW 69.50.204(c)(30)(i), the controlled substances act definition for THC, as it covered “synthetic equivalents of the substances contained in the plant, or in the resinous extractives of the genera Cannabis, and/or synthetic substances, derivatives, and their isomers with similar chemical structure and pharmacological activity.”
    • In November 2020, WSLCB staff were finalizing a draft policy statement focused on delta-8-THC which was distributed to stakeholders in February. Based on feedback received, the scope of the policy statement was expanded to more broadly include cannabinoids other than delta-9-THC.
    • On April 14th, board members heard from licensed producers and other stakeholders opposed to delta-8-THC derived from hemp in legal cannabis products.
    • On April 23rd, the Washington State Pharmacy Quality Assurance Commission (WA Pharmacy Commission) moved to affirm “the plain language reading of the statute” in response to a WSLCB request “for clarification on the commission’s current interpretation of RCW 69.50.204(c)(30)(i)”.
  • During the caucus, Board Member Russ Hauge reported speaking with Washington SunGrowers Industry Association (WSIA) Executive Director Crystal Oliver and “other representatives” of the trade association “about synthetic cannabis issues that we’re facing now” (audio - 8m).
    • Hauge described their “request for reassurance that we’re on it,” adding, “as far as I know nobody has yet said all the agencies that have a piece of this problem should get together and work out a collaborative solution, at least I’m not aware of that.” According to him, Oliver was “confident about giving the perspective, based on anecdotal evidence, of the negative impact the whole delta-8 thing is having on her clientele.”
    • Hauge found himself questioning “how is this affecting the producer/processors?” as he was unaware of “any, either anecdotal or other information about how this new product, hemp-based, hemp-made, or synthetic cannabis, is affecting the producer/processor part of the business.” He had asked WSIA members to put him “in touch with somebody from that community who might be able to talk, just generally, about how this is going.” Hauge promised “if I do get some bites on that I will follow through and I’ll report back as to how we’re, trying to get, well, basically what I’m trying to get is a clear picture of what’s really happening out there, not based on anecdotal evidence, but, or if it’s based on anecdotal evidence, getting some more anecdotes so we have an understanding” of the issue.
    • Board Chair David Postman reported receiving “mixed messages” from those in the cannabis sector “depending on what part of it they are.” He invited Policy and Rules Manager Kathy Hoffman to chime in, noting she “has been working that” topic in collaboration with other State agencies “and, I think, even seeing some progress.”

• Policy and Rules Manager Kathy Hoffman briefed on WSLCB coordination with other state agencies, providing her perspective on a meeting in which the Washington State Pharmacy Quality Assurance Commission concurred with a “plain language” interpretation of the THC statute.
  • Hoffman said agency representatives had met with WA Pharmacy Commission staff as well as officials from the Washington State Department of Agriculture (WSDA), Washington State Department of Health (DOH), and Washington State Board of Health (SBOH) “to share our agency direction at this point" and to "find out what their awareness of concerns around delta-8 and other THC isomers, what they’re seeing, what they’re hearing." She claimed, "up until last Friday, at least, this isn’t something that’s been at the forefront" of concerns for the agencies and reasoned WSLCB staff had been “in closer proximity" to the practice than other departments.
  • Hoffman said agency officials had “been working with Pharmacy Commission” and referred to the April 23rd meeting during which commission members had been asked to review the statutory definition of ‘Tetrahydrocannabinol’ to ascertain whether they held “a broad interpretation” of the compound, “or is it narrow?” Hoffman asserted that the “decision from the commission was a broad definition, broad application of THC,” adding, “So I hope that helps.”
    • WA Pharmacy Commission members voted on a motion which stated: “The commission agrees with the plain language reading of the statute and responds in the affirmative of the LCB’s policy inquiry.”
  • Hauge responded that he “was aware” of the commission meeting as he had been talking to Hoffman about the issue when Oliver sent WSLCB leaders “a message of concern” while the commission meeting was underway. He commented that as the Board’s role in the subject would be highly visible (“as in so many instances”) he’d been promising those he spoke with "we're going to do something, and, and we're going to make sure that it's right, and we’re going to try to be thoughtful” moving forward.

• Agency leaders reported receiving a variety of comments on cannabinoid derivatives which tended to reflect the speaker’s position in the Washington cannabis and hemp sectors.
  • Postman established that there was "a lot of, obviously, concern out there among licensees" and that he’d had meetings where "I guess there is just a lot of, I guess, skepticism.” But, he said, from Director Rick Garza “on down” as well as “us on the board...there seems to be a really strong consensus” that action would be required “to really do what we need to do. But we just have to, I guess, keep assuring people” that the agency was working on the topic.
  • Postman was grateful for “public health people” like Public Health Education Liaison Sara Cooley Broschart and Gillian Schauer, a research scientist whom WSLCB independently contracted at $145 an hour to work with Broschart “and others.”
    • Schauer’s services contract exemption from Garza stated the scope of contracted services would include provision of “information about and analysis of specific issues to better inform decision-making and policy development. Areas of focus will include emerging issues around cannabis such as delta-8 THC, marijuana product potency, impacts on youth consumption, vapor products, consumer safety education, taxes, environmental health and other issues that may arise.” Her contract with WSLCB began on February 15th.
    • Schauer gave testimony and a presentation on delta-8-THC to the Oregon State House General Government Committee in a public hearing on HB 3000 on March 25th.
  • Hoffman considered the topic to be “a multi-dimensional issue" inclusive of the state hemp sector which was “becoming very interested in what agencies are doing...across the country.” She noted there was “disagreement even within that industry about” how regulating agencies should deal with cannabinoid derivatives.
  • Hoffman said WSLCB staff had heard “different things from our licensees as well, some of it anecdotal, that suggests, you know, one impact and then some of it, supported by data, that suggests another impact that’s very different.”
  • Hoffman felt that the complexity around the issue was “well managed and we’ll be able to move forward in the next few weeks, if not days."
    • On Wednesday April 28th---the next day---WSLCB announced the policy statement on delta-8-THC and other cannabinoids.
    • On Monday May 3rd, agency staff sent a clarifying bulletin about the policy statement expressing that the initial policy statement had been “notifying the public and stakeholders that the agency will be addressing the issue...Current interpretive and policy statements are advisory only. To better inform the public, agencies are encouraged to also convert long-standing interpretive and policy statements into rules.”
    • On Tuesday May 4th, Hoffman assured the board that she’d ask for permission to open “rule development” at their next meeting on Wednesday May 12th “that would allow you, the board, to evaluate additives, solvents, ingredients, and compounds used in the production and processing of marijuana products to determine whether such products pose a risk to public health or youth access.”