WSLCB - Board Meeting
(May 12, 2021)

Here are some observations from the Wednesday May 12th Washington State Liquor and Cannabis Board (WSLCB) board meeting.

My top 3 takeaways:

• The board approved a CR-101 to start rulemaking on delta-8-THC and “to allow the WSLCB to evaluate additives, solvents, ingredients or compounds used in the production and processing of marijuana products to determine whether such substances pose a risk to public health or youth access.”
  • Policy and Rules Manager Kathy Hoffman prepared board members for the initiation of rulemaking on May 11th. The project appeared intended to help agency staff develop assessment practices for cannabis products more broadly, starting from an April 28th policy statement on delta-8-tetrahydrocannabinol (delta-8-THC) and other THC isomers.
    • A clarifying bulletin about the statement was distributed by the agency on May 3rd.
  • Hoffman asked the board for approval to initiate “the rule development process concerning the evaluation of THC compounds other than delta-9” (audio - 3m).
    • She said officials had become aware of “products entering the regulated market with labeling noting the presence of cannabinoids other than” delta-9-THC as well as “other [cannabidiol] CBD additives.” She stated staff had learned “that CBD isolates from hemp and other sources is being genetically or chemically altered to result in a potentially intoxicating psychoactive compound not derived from marijuana as defined in statute or synthetic equivalents of substances contained in the cannabis plant.”
    • Hoffman argued compounds aside from delta-9-THC “have appeared in our regulated system” without “mandatory testing standards for these compounds” in law or agency rule, and without data on “the impact of these different chemicals on health.” Referring to the policy statement that “serves as the current agency position on this issue,” she said it “was designed to serve as a foundation to start the conversation around rules” agency staff would “contemplate developing” during the rulemaking process.
    • With board approval, Hoffman described how she would file the CR-101 with the Washington State Office of the Code Reviser (WA OCR) and anticipated “notice would be published” by WA OCR on June 2nd. A deliberative dialogue session on “Cannabis Plant Chemistry” was planned for June 3rd. The public comment period would run until July 2nd, and she believed it was possible to “bring a rule proposal to you by August 18th.” Under this timeline Hoffman indicated the public hearing would be held on September 29th, with final adoption of changes “no earlier than October 13th.” She emphasized that this was “a tentative timeline” and that stakeholder input could delay completion of the rulemaking project.
  • Board Member Russ Hauge said WSLCB was “at really early days here” when it came to understanding “the process that has created this” new and “synthetic substance that’s coming into our market.” A lack of knowledge about “the impact this is going to have on the market and our consumers” was apparent to agency officials, he argued, “given that we don’t have a whole lot of protections” in evaluating unfamiliar compounds (audio - 1m).
  • Hauge told Hoffman that they had “discussed, in passing, emergency rules and we have, at this time, decided not to seek emergency rules on this issue.” He asked Hoffman to confirm emergency action had not “been ruled out,” and she responded “that is correct” (audio - 1m).
  • The board unanimously approved initiating the new rulemaking project (audio - <1m).

• Vicki Christophersen, the Executive Director of the Washington CannaBusiness Association (WACA), shared some “negative perceptions" her group was facing, listing both long-standing member grievances and dissatisfaction with the policy statement and clarification released by the agency (audio - 5m, written comments).
  • Christophersen said WACA had formed out of the “need for collaborative, professional, and data-based advocacy and the formation of a safe, quality controlled, and well regulated marketplace” for Washington cannabis. She talked about how the organization wasn’t “flowing into an empty vacuum when it came to cannabis policy here,” but had worked “against negative perceptions, bad information, and fear-based ideas of the people who work in the cannabis industry, make money from cannabis, and who seek to establish a legal sector.”
  • WSLCB was “still grappling with these issues...on the cusp of ten years since the passage of initiative 502,” Christopherson commented, “and it’s disturbing that the attitude towards the pioneers in the cannabis industry has not evolved farther than it has.” She viewed this attitude as impacting “people currently in the industry, the people who’ve been kept out of the industry, and the innovation occurring in cannabis and hemp despite barriers created by those unwilling to treat cannabis and hemp like anything but illicit drugs.”
  • Christophersen warned that if “Washington isn't careful we will fall behind on several fronts, from equity, to innovation, to investment” and told “anyone who questions this, WACA and its member stand for a safe, equitable, and fully regulated industry” to keep “Washington at the forefront of this nascent sector.” “I’m here today because we are disappointed, on many fronts, in our interactions with the LCB,” she said. Warning that if “this state persists in imposing overly restrictive, expensive, and confusing practices” on a “growing, global industry,” Christophersen suggested the state risked both the health of the legal cannabis market “and the contributions of this sector across the state.”
  • She insisted that "so multiple are our frustrations I could not possibly cover them” during a four minute public comment, but mentioned:
    • “Continued pursuance of license cancellation by this board for violations that would be a mere fine under the current penalty grid” and “enforcement actions against licensees for things as trivial as a handle on a glass jar.”
    • “Persistent views that those who took the risk to build these businesses are criminals.”
    • “Recently issuing a confusing, and frankly inaccurate, policy statement regarding delta-8-THC that reads like an enforcement bulletin...and then issuing a clarification statement that’s still confusing.”
    • “Despite years of work by stakeholders and the LCB to create a clear, transparent, packaging and labeling guidelines we find ourselves back in a subjective, expensive, and unpredictable packaging and labeling process.”
    • “Still, after four years, no solution on traceability...WACA supported the increase in licensing fees for the purpose of a better system. At this point, shame on us for doing so.”
      • WSLCB organized a Traceability Advisory Committee between 2017 and 2019, before starting a Traceability 2.0 work group to help the cannabis sector move past MJ Freeway Leaf Data Systems. The work group last met on March 2nd.
    • “Continued delay in reasonable testing rules so that the industry can show the safety of our products.”
      • At publication time, the Quality Control (QC) Testing and Product Requirements rulemaking project had been active for over two and a half years at WSLCB. Hoffman stated on May 11th that staff would “firm up” a timeline on the project within a “couple of weeks.”
      • The Washington State Department of Ecology (DOE) Cannabis Science Task Force (CSTF) continued to develop laboratory standards for cannabis testing, publishing a report with recommendations covering “Laboratory Quality Standards for Pesticides in Cannabis Plants and Products.” The most recent CSTF meeting was on April 29th, with the next meeting scheduled for May 24th. 
  • Christophersen told the board that WACA members wanted to be a “partner” with the agency and share “good information with stakeholders,” however, “persistent challenges” had resulted in “turmoil and insecurity among license holders who are in a perpetual state of high alert to stay in alignment with the law.” She promised her group would partner in “approaching these issues with diligence, professionalism, respect” adding that she “needed the same” from WSLCB.
  • In follow up written comments, Christophersen wrote that “since my testimony this morning, I have been made aware that our observations and voiced frustration was surprising for some because we work together frequently, openly and with positive intent...But it is critically important for the leaders of this agency to hear that the missteps you may experience as minor are absorbed by our members and throughout the industry as real hits to their bottom line...something that doesn’t seem to be taken seriously.”

• Every member of the board responded to Christophersen’s comments, including Board Chair David Postman who said her comments were "not the message” she’d conveyed during their first meeting.
  • Postman said, “you and I spoke briefly after I took this position. I think you were my first external meeting and this was not the message I, you know, heard then" (audio - 5m).
    • “Given that you said you, you couldn’t even have gotten this all out in the four minutes allowed here I just would invite you to come and talk to me again,” Postman offered. Acknowledging that he’d only been on the board since “mid-March,” he’d nonetheless gotten a very different impression of the agency than Christophersen had conveyed. Postman felt people should recognize “in the scheme of this new market we are still in the very early days” and everyone was still learning.
    • Postman thought there had been “amazing evolution of enforcement” and a “cultural change” within WSLCB that “needs to happen and is still in progress. It’s not just LCB that’s going through that, it’s everybody, I think.” But “in our conversations either in these meetings or when we’re looking at adjudications,” he did not perceive agency representatives projecting an attitude “that we’re dealing with a criminal element.”
    • Postman observed that licensee violations were taken “seriously” following an “evolution of the, the penalty structure” in January 2020 and a continuing “major shift in the entire enforcement” division at WSLCB. Postman said he’d “heard a lot of good things” from licensees about the approach but remained “happy to engage with questions about policy and practices.”
      • Agency representatives went over enforcement reforms in November and December 2020 as well as adding details during a January 6th meeting of the agency’s Cannabis Advisory Council (CAC).
    • He described regular meetings between staff and licensees or industry representatives “about delta-8. That doesn’t mean we’ll always agree, but it’s certainly not an instance of, of that conversation not happening.” He added that “you all are learning about this, too, as quickly as we are,” and that even if the cannabis sector was “one step ahead, we’re trying.” “What people thought delta-8 meant three months ago is not necessarily what people are saying today,” Postman said, adding “that’s around the United States.”
    • Inviting Christophersen to keep meeting with the board, he noted she’d “talked with agency leadership as well, you should continue to do that.” He asked for “everybody to engage in these processes,” noting some proposed rule changes received very few comments that still led to “substantive changes” because all input on WSLCB rule development was “taken seriously.”
  • Board Member Ollie Garrett remarked that she’d been "a little surprised to hear the frustration from” Christophersen but remained willing to continue meeting with her (audio - <1m).
  • Hauge shared the sentiments of Postman and Garrett, telling Christophersen he was "always available for face to face meetings" (audio - <1m).