WSLCB - Cannabis Advisory Council
(December 17, 2019)

• The Cannabis Advisory Council (CAC) is an appointed body which serves as a primary public interface between WSLCB leadership and the regulated community. Board Member Ollie Garrett serves as the executive sponsor and Chair of the CAC.
• This year, the agency has acted to diversify representation on the CAC beyond trade associations and a consumer representative. Prior to the last meeting in July, Garrett appointed Mark Ambler as a representative of tier 1 producers and Aaron Bossett from the Black Cannabis Commission. Prior to this meeting, Garrett appointed Lukas Barfield as a medical cannabis patient representative following advocacy for representation from the patient community.
• The meeting agenda includes two primary topics: a fifteen minute update on the agency’s response to the vaping associated lung injury health scare, and discussion of the upcoming legislative session. Staff will provide an update on the agency’s request legislation, which was last publicly discussed on December 4th. It’s likely that the agency will have heard back from the Office of the Governor on the approval or denial of their two request bills to establish a fledgling social equity program and address a mishmash of patient and small producer concerns. Moreover, the agency planned to provide time in the hopes that CAC members would be forthcoming about their own legislative agendas.

Here are some observations from the Tuesday December 17th Washington State Liquor and Cannabis Board (WSLCB) Cannabis Advisory Council public meeting.

My top 3 takeaways:

• The Cannabis Advisory Council members introduced themselves before being briefed on potential 2020 agency or governor request bills.
  • The Cannabis Advisory Council (CAC) was formed by WSLCB to engage with cannabis stakeholders in a public setting to discuss the agency’s cannabis efforts or issues of concern. The CAC met earlier in the year on January 16th and July 17th.
  • The Council went around the table for introductions, including new members and acknowledging last minute substitutions (audio - 2m).
    • Lukas Barfield, new patient representative and member of the Tacoma Area Commission on Disabilities. Barfield was chosen following pressure to add a patient representative to the CAC which resulted in a request for patient applicants meeting specific criteria.
    • Aaron Bossett, founder of Washington’s Black Cannabis Commission.
    • Kyle Capizzi, Executive Director of the recently-formed Craft Cannabis Coalition (CCC). Capizzi said he was “replacing” Eric Gaston of the dormant Cannabis Organization of Retail Establishments (CORE). 
    • Brooke Davies, Deputy Director of the Washington CannaBusiness Association (WACA). Davies represented WACA in place of Andy Brassington, President of Evergreen Herbal.
    • Bailey Hirschburg, Citizen Observer at Cannabis Observer. Hirschburg represented Washington’s chapter of the National Organization for the Reform of Marijuana Laws (WA NORML) as the Council’s consumer representative.
    • Lara Kaminsky, Executive Director of the Cannabis Alliance.
    • Jeremy Moberg, owner of CannaSol Farms. Moberg represented the Washington SunGrowers Industry Association (WSIA) in place of Crystal Oliver, WSIA’s Executive Director.
    • Council Members unable to attend included Frank Fauls of the Cannabis Farmers Council, Bill Sterud of the Puyallup Tribe, Robin Sigo of the Suquamish Tribe, and Angel Swanson from the Marijuana Business Association (MJBA). Mark Ambler, who was awarded a seat on behalf of the Tier 1 Producer Association and participated at the last CAC meeting, was no longer listed as a council member.
    • The WSLCB was represented by Board Member and Executive Sponsor Ollie Garrett, Board Chair Jane Rushford, Board Member Russ Hauge, and Director Rick Garza.
    • WSLCB staff present included Executive Assistant Dustin Dickson; Policy and Rules Coordinator Kathy Hoffman; Policy Analyst and Tribal Liaison Brett Cain; Director of Legislative Relations Chris Thompson; Enforcement Chief Justin Nordhorn; Research Consultant Trecia Ehrlich; and Sara Cooley Broschart, the agency’s Public Health Education Liaison.
  • The final CAC agenda outlined three areas the agency either wanted to update the Council on, or solicit their feedback.
    • A “2020 Legislation” Update
    • A “Vapor Associated Lung Injury” (VALI) Response Update
    • “Other Council Member Priorities”
  • Thompson led the legislative update and answered CAC member questions, occasionally deferring to Cain and Ehrlich for more specific answers (audio - 35m).
    • Garrett initiated the conversation by observing that “one of the things that, both in [Initiative] 502 and [WS]LCB initial regulations, we failed to address the social equity goals.” She told the CAC that she’d begun focusing on social equity in 2018 after hearing from a group of African American licensees on the lack of diversity and social equity in the 502 market. The effort had continued throughout 2019 with internal talks, research into other state's practices and a white paper on the topic prepared by Cain. Garrett then said her participation in equity-focused events including New York’s Marijuana: Justice, Equity, Reinvestment Conference and the Marijuana Management Symposium hosted by the City of Denver further contributed to her “trying to identify what we can do now, here in Washington state.” Garrett turned the briefing over to Thompson and Cain to explain “the bill that we’re proposing, the process it goes through” and its current standing.
    • Thompson started off by reviewing the “agency request package” that WSLCB “expected to bring forward” to the legislature in 2020 including a social equity bill, medical cannabis/small producers legislation, and late forming vapor product legislation. Thompson thanked Garrett for the comments on how the agency “got to this point.” He said bill drafting had started in the spring and summer of 2019 when staff solicited feedback from cannabis stakeholders. “In the case of both of the bills that we developed last summer, subsequent revisions were made,” Thompson reported.
    • For the equity program, the agency had revised its initial goal of permitting any class of persons covered in the state nondiscrimination statute to apply, which Thompson said was deemed “overly broad” by the governor’s office. There would be “two avenues for the awarding of new retail cannabis licenses.” The first would be if local governments “request additional [retail] slots within their jurisdiction,” and secondly by the agency re-issuing “discontinued or previously unissued licenses.” The latter method would involve “in the neighborhood of three dozen or so” retail licenses. Thompson further cautioned not to “expect a big groundswell” of municipalities wanting to raise their caps on cannabis shops. The bill’s “scope of eligibility” was also reduced to “communities of color and some requirements around a social equity plan that would be submitted as part of that application.” Thompson admitted the request legislation was “modest” and would “fall short” of “what we might all agree to call ‘social equity’ in this industry” but was nonetheless “a place to start” that might “begin to address a priority that we haven't really taken on, head on.”
    • Moving on to the proposed medical cannabis and small producer bill, Thompson explained that it would permit tier 1 producers to “sell medical marijuana products at retail” provided they were Department of Health (DOH) compliant. Like the equity bill, he acknowledged the medical patient/small producer draft had been “narrowed” from its first iteration. Producers could provide medically compliant product by “home delivery” to patients registered in the DOH database or a retail “location that complies with a number of limitations” such as local zoning.
    • “What is likely to become a third agency proposal” pertained to VALI and vapor product bans enforced by WSLCB emergency rule. Thompson told the CAC that state agencies---primarily WSLCB, DOH, and the governor’s office---were “writing language for that proposal” and at the “very beginning step” of collecting stakeholder feedback. He said that “in keeping with the governor’s executive order in regards to [tetrahydrocannabinol] THC vapor products” any bill’s objective would be to “not necessarily create a whole bunch of new legal provisions and requirements” for cannabis vapor items but rather to “create some significant new regulatory authority in [the non-THC vapor] marketplace.” Thompson noted an eventual bill may not come from WSLCB, but that the agency had weighed in to “clarify existing agency rulemaking authority” and what changes would be required to “authorize what is currently being produced” in the non-THC vape sector “in the way of certain types of flavor products.” The bill would also “disallow certain product types” while at the same time outlining what was “clearly, positively, explicitly, authorized and approved.” Thompson assured the group the bill wouldn’t comprise a complete flavor ban, nor “strictly a carte blanche 'flavors are okay,’ either.” Certain compounds were sure to be banned, while others would be “allowed at least under the current set of regulations.” The bill wouldn’t keep WSLCB from “adopting new regulations” based on concerns about “health risk or youth access,” Thompson added.
    • Thompson said the agency hadn’t received approval from the governor’s staff “to move forward yet with any of the three, once that does occur, if we do get approval” then WSLCB would seek sponsorship from lawmakers which “starts the legislative process.”
      • Earlier this year, Cannabis Observer revised a website for Seattle HEMPFEST on Advocating in Washington State for citizens interested in participating in state or federal law making, or rulemaking by the WSLCB.
  • CAC members had a variety of questions for Thompson.
    • For prospective tier 1 changes, Kaminksy said that as the agency had rulemaking underway to revise cannabis quality assurance rules (now called 'Quality Control') to require pesticides and heavy metals testing, all legal cannabis products would effectively be medically compliant. “Have you thought about how [the request bill] will affect that?” she asked. Thompson responded that her observation had come up in internal meetings and that “the point is well taken.” He said that the bill wouldn’t change the “definition of, or status of medically compliant, or medical products.” Sales were still limited to patients registered with DOH, he added before including that the agency was "definitely prepared to revisit the parameters of the program" if the request bill became law. Thompson said Washington was "at least a little ways off yet from all products being required to be tested." Hoffman spoke up to say she anticipated a CR-102 on the Quality Control project would be ready by January 8th, 2020.
    • Barfield asked whether the Board had “really thought about how they’re going to market [the request bill] to patients,” saying that “most patients I know” wouldn’t follow WSLCB closely enough to realize it was happening. “There’s not a whole lot of communication out there between the 502 market and patients,” he said. In addition, Barfield inquired as to whether home delivery was something for which the cannabis patient community asked. Thompson replied that "no patient groups have asked for this piece of legislation" but that WSLCB had heard feedback on their proposal. "Frankly, we have a long way to go," he stated, noting that the agency would “have to come back to" the specifics of the delivery system were it to become law.
      • WSLCB completed a study of home delivery for the legislature in 2018 which involved a stakeholder meeting on the topic.
    • Bossett delved into the social equity ideas the agency put forward, inquiring whether retail licensing was “the only way" to pursue diverse new businesses, as “the cannabis industry is more than retail.” He warned that asking prospective minority retailers to enter only one facet of the 502 sector could be “setting these people up to fail.” Thompson replied that "retail is the only piece that we've bitten off of the entire pie" and that WSLCB didn’t have data to speak to the risk for failure such an applicant faced. He agreed there would be challenges, "even more so for people coming from backgrounds that have suffered and see significant, disproportionate harm" from cannabis prohibition.
    • Garrett asked Bossett to elaborate on equity options “other than retail,” who replied that “the cannabis industry is more than a retail industry,” but also ancillary services like “data analytics, packaging, and marketing.”
      • He also questioned who would review the social equity applications “because, right now, under affirmative action, white women receive the most affirmative action licenses.” He said that he’d even had difficulty getting responses from the agency for engagement as “the only person here willing to sit down as a stakeholder to come up with a solution.”
      • Bossett called attention to WACA’s proposal for an equity fund collected from a tax on large investments in cannabis businesses. He termed it a “good plan” but that its 1% tax on investments of $500,000 may not be the right level to adequately fund the effort. Bossett then asserted it needed to be available to “help with business development in other aspects of industry, all industry” saying the newest minority-owned retailers would be “really at the whim of the [existing] industry.” He maintained that the economic disparities represented the single greatest obstacle in the success “between the victims of the war on drugs and the existing cannabis class.”
      • His next idea was a “different license structure” because WSLCB’s bill covering tier 1 producers missed a chance to incorporate more equity licenses. Bossett liked the “fully integrated system” of the agency’s other proposal as it allowed control over both production and sales. He wondered if allowing a “community fund” for investment in business development could be part of the total equity fund for minority owned licenses, or potentially “micro-loans” to “not just cannabis businesses.” Bossett told WSLCB to consider letting a non-governmental organization (NGO) like the Black Cannabis Commission exercise some administrative control over the potential fund, applicant review, and training.
      • “I don’t think [equity policies are] the responsibility of anybody” from the current industry, Bossett told the group, “that’s a government issue. And I hear the [WS]LCB putting that issue off on everyone else in the room.” He advised WSLCB set an example through more diverse hiring, saying the agency’s “entire staff” didn’t “even represent the entire demographics of this state.” Bossett felt the current industry was “now being tasked to come up with the solution” for what should be primarily government policymaking. He felt the proposals so far were “not tangible, they’re not even real” with an ideal model involving “funding, training, and then opening up a different licensing route” which would include “a different way that licenses can be held.”
  • Cain and Ehrlich offered supplemental information on the agency’s understanding and monitoring of other states’ equity policies.
    • Cain called the request legislation an “attempt by the agency to put this in front of the legislature. That it’s an incremental step.” He mentioned the Albany conference which he attended with Garrett and collaborating with Ehrlich to brief on other state’s efforts in May along with “policy options for the agency to consider.” Cain told the CAC not to expect the proposal to “be passed exactly as it's initially presented” and assured everyone staff would “continue to look into this topic.” He and Ehrlich would be checking back on other state’s programs in addition to the University of Washington (UW), Washington State University (WSU), and researchers “on social equity in the cannabis space.”
    • Ehrlich elaborated on the research WSLCB was watching, saying that she’d been in contact with researchers at UW and WSU about “complex and emerging” data on equity in the industry. “In the past, research was very much focused on the disproportionality of arrests before and after adult possession was legalized in Washington. She noted that WSU had studied federal Uniform Crime Reporting to analyze disparate arrests, but cautioned it was “not as comprehensive as other types of data.” Ehrlich said that UW professor Alexes Harris and graduate student Michele Cadigan were looking into “Washington Administrative Court data which is very detailed and very specific. So not only will they be looking at disproportionality in arrests and convictions, but also fees and penalties paid” and how much money “communities of color in Washington have put into our system.” 
    • Ehrlich couldn’t point to any studies of equity programs, but observed that “in the last four months, we’re starting to see the first pieces of research that actually look to evaluate equity programs, what’s working and what’s not.” She believed they’d finally receive “solutions-oriented information.” Bossett was supportive of this monitoring, but said “nobody’s talked with the victims yet.”
  • Moberg asked if tier 1 licensees with direct sales “would be limited to their own product or could they buy- act as a processor?” Thompson said producers with the retail endorsement “can't hold another producer license or a different retail license” and that a retail endorsement only permitted sales of compliant product of that producer’s “own production.” He added a producer with a retail endorsement could possibly hold a separate processor’s license but the retail endorsements wouldn’t allow them to sell products from the processor’s license.
  • Hirschburg asked Thompson if there was data to back up the agency’s assumptions that this would increase access to medically compliant product for patients. Hirschburg said, “My concern is, there was an assumption that we create this standard of compliant product and patients will get all this compliant product.” However, “it didn’t really happen. Very few licensees choose to do that.” Hirschburg was curious if this was another “assumption that this will lead to more compliant product, or is there information about that?”
    • Thompson told Hirschburg there wasn’t "proof this is going to work" or research. “We’re hoping that this is one more, among other, efforts and policy initiatives to increase” medical cannabis access. Thompson said there was other agency rulemaking underway with that same objective.
  • Hirschburg’s next question was if the home delivery function was “assumed to be the responsibility” of an endorsed licensee or whether it could be a separate cannabis transportation company which WSLCB licensed. He tied the question to equity, saying there were “transportation licenses, we’ve got research, there’s lab[oratories]” for the 502 industry while being concerned about simply adding more producers and processors to a competitive market. Hirschburg echoed Bossett’s earlier idea that funding for business development of minority licensees be open to other license types and “explicitly for an ancillary business that’s going to be in the cannabis market.”
    • Thompson said the type of services was a detail to be determined later in WSLCB rulemaking. “There are very few parameters” explicitly stated in the request legislation, aside from requiring a certified medical cannabis consultant on staff with producers holding the new endorsement, he explained.

• WSLCB Public Health Education Liaison Sara Cooley Broschart presented new data on vaping associated lung injuries which drew multiple questions about the agency’s work on both cannabis and non-cannabis vapor products.
  • Federal and state health investigations into VALI causes have continued as the State cracked down, banning flavored vape items and the additive vitamin E acetate. The new prohibitions adopted by the State Board of Health (SBOH) were implemented in part by WSLCB emergency rulemaking in October.
  • Broschart gave presentations to SBOH at that Board’s October and November meetings, in addition to updating lawmakers during the House Commerce and Gaming Committee’s vapor enforcement work session on November 21st (video).
  • Though much of Broschart’s remarks covered information or actions already disclosed by the agency, DOH, and federal regulators, several new facts came to light (audio - 23m).
    • First, Broschart confirmed that VALI “cases continue to come in” to the U.S. Centers for Disease Control and Prevention (CDC)---albeit with a persistent “lag in reporting”---but was optimistic that the state and nation may have passed the peak of new cases, which she said health officials “believe was mid-September.” She said officials would continue to study and react to new information.
    • Confirming that VALI victims tended to be younger and male, Broschart offered no “reasoning or rationale” beyond assumptions that vaping was generally more popular among men.
    • Broschart acknowledged that injuries were concentrated in both states with legal cannabis retail, and states without. She said officials were seeing people “identify that they bought these products from a variety of sources.” Vitamin E acetate was a common “chemical compound of concern” Broschart included.
      • SBOH banned that compound from all vapor products a month earlier.
    • Broschart said health professionals were “scratching our heads a little bit” as nationwide 13% of cases involved patients who didn’t report vaping THC products. In Washington, 43% of the state’s 21 confirmed VALI cases showed urinalysis testing results validating patient claims that they vaped nicotine products exclusively. “So some folks are truly not using THC and yet still sick, so there’s still a lot we don’t know” but Broschart believed WSLCB could claim some credit for an observed “limited impact” from VALI cases.
    • She said DOH interviews with patients found 1/3rd of those using THC vapor products reported shopping in Washington’s 502 retailers. “We’re not sure where the origin of this is coming from,” Broschart insisted, “and so we don’t want to exclude possibilities at this point” adding that the CDC was “insisting that there may be other chemical compounds involved.”
    • Broschart reviewed WSLCB’s enforcement efforts, saying the agency “act[ed] swiftly” since the executive order was signed in September and SBOH banned flavored products the following month. She had updated information similar to what was presented to the legislature. 
    • She noted a lawsuit against the state over authority for the flavor prohibition involved a temporary restraining order that was not upheld. She said the lawsuit’s next hearing will be “February or later” after SBOH’s 120-day emergency rules on flavored vapor items expired, though that Board had the authority to extend the ban.
    • Broschart reported that WSLCB’s role had been development of “consumer warnings,” an ingredient disclosure form for cannabis processors, and ensuring compliance.
    • Enforcement officers visited over 4,100 licensed cannabis and vapor retailers by Thanksgiving, finding 98% of cannabis retailers in compliance compared to 94% compliance for non-THC vape licensees.
    • Broschart said that the agency had received over 400 ingredient disclosure forms back as of December 13th. This was far below the expected response rate expected by the subsequently applied due date of December 1st. She told CAC members that more communications would be going out, but WSLCB wanted their help encouraging their organizations’ processor members to submit the required forms, which was required even if only to disclose that a processor didn’t make vapor items.
    • In addition to reviewing compliance with product recalls, Broschart announced that officers would be doing “random processor checks” through the end of the year primarily to “see where things stand, to make sure that everybody has the information” about the bans. When “looking through the forms we have thus [far] received nobody has been using vitamin E acetate,” leaving her hopeful that the substance wasn’t a problem in the state’s legal market.
    • She concluded by noting that the agency was now re-visiting non-compliant locations and “have had to issue some penalties there” if the stores remained out of compliance. Lastly, WSLCB was continuing to collaborate with the Department of Ecology (DOE) on appropriate disposal of banned products.
      • The agency issued a press release announcing the suspension of three western Washington vapor businesses the following day.
    • Broschart noted that the agency continued to update online information available to the public and affected business. Other steps ahead for the agency in dealing with the issue included:
      • Weekly internal project team meetings
      • Interagency calls with DOH, the governor’s staff, “and others”
      • Continued enforcement outreach
      • A potential inter-state work group on “best practices” for vapor product regulation
      • Contributing to request legislation development
  • Moberg asked Broschart about the definition of a product for disclosure forms who told him it was “each product in your current inventory and for all future products" even if the cannabis cultivar was the only difference. Moberg observed that that standard was labor intensive, reproducing multiple disclosure forms for “strains” of cannabis concentrate with otherwise identical vapor ingredients and additives. He was convinced this was contributing to the low response rate. After some discussion, Broschart said WSLCB could accept “variable” as a cultivar listing on the form “as a first step.” Hauge said the forms weren’t a “gotcha” effort to issue penalties, but an earnest attempt to “find out what's out there.”
  • Kaminsky asked about including a set of cultivars or extracts on the disclosure form, and Broschart conceded that the form may eventually be modified.
  • Hirschburg noted that “I rarely vape, but when I do it comes from the 502 market and apparently if I’m going to make that choice, so much the better.” He thanked CAC members representing the industry for caring “about your customers at the outset.” Pointing to the high level of VALI patients in the state who reported not using THC vape items, Hirschburg asked whether WSLCB would get more authority to require disclosure or pull dangerous products from the non-THC vape sector. Broschart responded that the agency’s internal team and the interagency effort were weighing “substantial legislation on the non-THC side” as the agency had some licensing authority, but was limited in comparison to their cannabis mandate. 
  • Capizzi inquired as to whether the 400 disclosure responses represented 400 licensees or products. Broschart said it was product forms, and that WSLCB expected a “minimum” 11,000 product forms in total from cannabis licensees.

• Board Member Ollie Garrett invited council representatives to share their 2020 legislative agendas before agency representatives offered some final thoughts.
  • Davies invited Executive Director Vicki Christophersen to present WACA’s goals for their fifth legislative session. Saying that "WACA is a democratically run organization," Christophersen outlined their three most prominent priorities and several secondary issues (audio - 13m).
    • The trade association’s first bill would establish a new procedure for “location compliance.” Upon securing a location which met statutory and regulatory constraints (e.g., setbacks from child care facilities), WSLCB would be required to issue a certificate to a licensee attesting to the location’s compliance. In the event another facility opened in proximity to the attested location which would invalidate the claim prior to the application process and move being finalized, the licensee would still be permitted to undertake licensed activity at the location.
    • A second bill would allow sales of cannabidiol (CBD) only products by licensed retailers who are currently limited to selling items containing more than 0.3% THC. Christophersen commented that an absence of federal guidance was “troublesome” and had led to CBD items being sold in places like “gas stations.” WACA’s measures would let “licensed, educated experts in the retail space” sell the products provided they passed the same testing requirements expected for THC products. Christophersen noted that this proposal dropped a plan to allow retailers the right to sell merchandise, a feature of previous bills supported by her group.
    • WACA’s third priority was the “Cannabis Capital Equity Act” which had been mentioned earlier. Calling Bossett’s comments on WACA’s plan “very well taken” she acknowledged the long timeline for progress but felt that “state after state” was passing equity policies that Washington could draw from. Christophersen allowed that the proposal also addressed a long-term ambition of WACA to eliminate the state’s residency requirement for cannabis license ownership. She said attending the recent MJBizCon event in Las Vegas reinforced to her the potential for the state’s market if outside money could get behind it. Christophersen was skeptical of arguments that investment would go primarily to large licensees because “the big guys are well capitalized, they figured out how to make it happen.” By contrast she said smaller members had been some of WACA’s loudest voices to permit out of state financing because they had “fallen through because of this restriction.” Christophersen listed changes to the proposal since it first came to light in September saying many of the finer points remained “fluid” but the proposal had "committed sponsors and a lot of interest in the legislature."
      • It would apply a 1% tax to “any investment in aggregate” of $500,000 or more “by a single entity” regardless of whether the money comes from inside or outside the state. Funds would be administered by the Department of Commerce (Commerce) and distributed via a “zero to no interest loan” program that would be “revolving” rather than dependent on continued state appropriations. 
      • If investments failed to raise $2 million dollars in the first two years “the threshold would be lowered to $250,000.” Nonetheless, Christophersen said more “fiscal analysis” would still be needed. “We are committed to making this fund something that actually raises real dollars that can provide real assistance.”
      • The bill also stipulates the creation of a Commerce advisory body which would include members from communities of color to help distribute loans from the fund.
    • Kaminsky asked Christophersen if licensees producing CBD cultivars could take their crop to the “open market.” Christopherson answered that it hadn’t been addressed in the bill.
  • Moberg said of WSIA, “we play defense a lot" with most of the group’s priorities involving responding to legislation rather than putting forward their own. Calling organized lobbying “a game that’s expensive to play” he said WSIA would be “taking a close look” at all 2020 cannabis legislation (audio - 10m).
    • He cautioned against WACA’s out of state investment bill “repackaged as a social equity proposal.” Moberg felt the industry had lost ground on equity since the first licenses were issued and without a “healthy marketplace” in the state “minority owned and women owned companies” would continue to struggle. 
    • Moberg seconded Hirschburg’s caution about opening up a marketplace which has already “been very brutal for the last six years.” Moberg argued that the 502 market “hit rock bottom” with unsustainable wholesale prices which were finally beginning to increase. Saying that out-of-state financing was “inevitable” he asked the agency to consider a stipulation to prevent large interests from buying up inactive licenses “not worried about making a profit, just worried about getting market share.” Moberg also advised limiting the number transfers of a single license allowed in a year.
    • For quality control rulemaking, Moberg strongly recommended WSLCB not adopt the DOH approach to sampling and testing. He asserted a preference for the Washington Department of Agriculture (WSDA) to “be doing on site visits and collecting samples” as that would “keep people honest.” Otherwise, he feared the “biggest benefactor is the labs” and that consumers wouldn’t see a benefit.
  • Capizzi said the CCC was still “working to understand how to maintain diversity in this marketplace.” He believed the 502 market’s diverse product assortment benefited both consumers and businesses, and maintaining it was a top priority for his members. Another focus for CCC was understanding the “economic impacts of rulemaking” on smaller licensees (audio - 2m).
  • Barfield summarized a patient perspective that "we want our medical system back" and his goal for patients was "safe and affordable access" (audio - 3m).
    • Barfield called for rescinding the 37% excise tax on medically compliant products, saying Washington was the only medical cannabis state that taxed the product: “even Florida, way down in the deep south, doesn’t tax medical cannabis.”
    • He also wanted “more legal protections” for patients, commensurate with those using opioids or other prescription drugs. Barfield noted that while medical cannabis patients could grow plants, the grant of “affirmative defense” for patients who elected not to join the patient registry conveyed a message from the State that “we’re not quite sure if we’re going to protect you under the law.”
    • Barfield said more education was needed “in the retail cannabis space.” He said that Christophersen’s proposal to allow CBD items to be sold by retailers didn’t address gaps in medical consultant or budtender knowledge. “I’m still going into stores and finding people asking me if I want sativa or indica,” he added, saying that had nothing to do with the medical utility of cannabis.
    • Barfield concluded, “There’s no reason why Washington state shouldn't have the best medical cannabis system in the country.”
  • Kaminsky said the Cannabis Alliance would be bringing back legislation they’d previously supported (audio - 4m).
    • SB 5234 would remove the 37% excise tax on DOH compliant product for patients registered in the state database. She said there was “a lot of support” and expressed hope that her group would “get that over the finish line” to save patients’ money.
    • HB 1974 would establish a state Cannabis Commodity Commission. Kaminsky said her organization had been working with WSDA on appropriate language to allow the commission to raise money from producers and facilitate research which she believed would contribute to “market stabilization over time.” The most significant change from previous versions would let the commission market cannabis “in compliance with state and federal law” as regulations evolve.
    • Ideas without specific drafts that the Alliance supported included:
      • Addressing “plant material waste” sales outside the 502 market
      • Establishing “banquet permits” which Kaminsky felt could benefit social equity applicants in hosting temporary events
      • Supporting the right for adults to grow their own cannabis
      • Raising retail transaction limits for cannabis patients to “correspond to possession limits” and keep them from having to make multiple trips to secure sufficient cannabis
  • Bossett said BCC would engage in an “awareness campaign” for lawmakers and the public to see “what a true social equity plan looks like.” He pledged to engage other community groups in dialogue like the King County Zero Youth Detention program. Following this campaign, Bossett anticipated a “fully comprehensive program” from BCC in 2021 after “understanding of what the industry and market demands are” and seeing to it that the “community have a voice and a say” in the program (audio - 2m).
  • Hirschburg ran through some of the agenda items others had mentioned which Washington NORML backed, and addressed a few more which hadn’t been mentioned. He also thanked the agency for request legislation which was better than he’d “seen in several years.” He believed assistance for social equity, patients, and small businesses was “crucial” for the state (audio - 6m).
    • Hirschburg was supportive of WACA’s concept for location compliance and their “effort to look at social equity funding.” However, he was critical of getting a sustained source of equity funding from the organization’s proposed tax on investments. “I heard a comment along the lines of ‘we think this will help smaller businesses because the big businesses have enough money,” Hirschburg commented, “if that’s the case then we’ve discovered the first industry in America where the richest and most successful don’t want more money.” He said that regardless of the mechanism, equity funding was a conversation “that we need to have.”
    • He advocated for direct sales by smaller growers and the inclusion of “farmers markets” as a shared retail venue for tier 1 businesses securing a retail endorsement who “can’t afford or can’t set up a retail location from their premises.”
    • Hirschburg mentioned the active adult home growing legislation, HB 1131 and SB 5155, saying the bills “don’t have a huge role for [WS]LCB” but that the agency was sure to be asked again about home growing’s impact on their regulatory efforts. He also asked the agency to back up its claim of assurances or promises made by federal officials for the State’s continued prohibition of the practice.
    • Hirschburg agreed with the need for a banquet permit, saying social consumption of cannabis had a clear “equity component” because “the richer you are the easier it is to” use cannabis in the state. “There’s a huge economic disparity in how you can use cannabis in this state. Or how you can’t.”
  • Garza took the opportunity to directly address some of the priorities he’d just heard from CAC members (audio - 11m).
    • He began by noting that “the only memorandum we got from the Department of Justice (DOJ) was the Cole Memo which is rescinded” and “the feds, especially the Department of Justice, does not reach out to us.” He admitted, “The U.S. Attorneys might reach out to us here and then when they see an issue that’s going on out there, but I’m not sure where that came from, Bailey.” Hirschburg clarified, “In testimony last year, it was suggested in an LCB panel that we did see those benefits without kind of saying what they were.”
    • Garza suggested equity had been hard from the outset of the legal market due to heavy banking restrictions. Efforts by "low and middle class to jump in" to the market would find a deck stacked against them. He agreed with Christophersen that Washington state was “backing into this [equity] issue.”
    • Garza summarized WSLCB’s 2020 legislative “mantra” as being “how do we make more medically compliant product available? How do we help the small growers who are struggling? And how do we create a social equity program that was lacking” in Washington and other states that established legal cannabis marketplaces.
    • Reflecting on a recent roundtable of cannabis regulators he’d attended in Maryland, Garza said 28 states and 3 Canadian provinces participated and that newer states that had “placed social equity programs into their law” still struggled “to put those in place.” He credited WACA’s concept as it "at least provides a pool of capital that would be available" and was proud of the Board for taking on a difficult task. Garza thought those with money might be better off starting businesses in other sectors “given how difficult [the 502 market] is to be regulated under this industry and to just be profitable in this industry.” It was a problem common to all legal states so far in Garza’s estimation. 
    • Looking at the impending canopy expansion rulemaking, Garza said tier 1 production licenses “make up a small, tiny percentage of the overall canopy” and that smaller tier 2 prodcers had said they “want in too” on any canopy increase.
    • Garza suggested that WSLCB rulemaking around cannabis was becoming “more transparent” and incorporating greater stakeholder feedback. He called the recent packaging and labeling project "one of the more positive experiences" the agency had and was “a testament to the staff and a testament to the Board” following the agency’s initial cannabis rulemaking that was about “throwing this thing together as quickly as we could.” He concluded that WSLCB was making “good strides” toward transparent and accountable policymaking.
    • Retail was always difficult, according to Garza, as half of retailers outside the cannabis market also failed. “In any business there’s a pretty good chance you’re going to fail,” he warned. “All [WSLCB] can do is, kind of, bring proposals forward to address what you’ve brought to us,” Garza said, endeavoring to take the long view and cautioning CAC members of expecting a functional equity system within a year. Nonetheless, he claimed the agency’s goal was to make the "marketplace more vibrant and inclusive."
    • Responding to comments about WSLCB “not doing a good job of educating people in the stores,” Garza voiced frustration because “you own the stores and you make the product." He felt CAC member organizations should play a key role in crafting educational components for their own industry. “Help us understand how we do a better job as the regulator of educating people in the stores when we’re not in the stores,” he asked those in attendance.
  • Hauge offered his perception that he saw “the same issues as you all do" around patient access and business viability with the possibility of significant out-of state-investments. “I look forward to a productive session, and the next session after that,” he said (audio - 1m).
  • Rushford thanked all the participants, saying the policy discussions at WSLCB had “deepened, they’re richer and more meaningful.” She cited the listen and learn process as one that improved their rulemaking and agency staff was “all endeavoring to do a better job." Though not easy, Rushford said, “we have the best interests of the industry in mind all the time" (audio - 1m).
  • Before bringing the meeting to a close, Garrett impressed upon the CAC and attendees that “we are listening.” She promised that the agency would continue working on equity, medical cannabis, and business viability. Garrett also committed to working with Bossett directly to reach as many disadvantaged communities as possible. “The goal here is to be inclusive,” she said and to "not have unintentional consequences when we’re making some of the decisions and the rules that we’re making." She told the CAC to expect the first meeting of 2020 “right after [the legislative] session. We will probably have a lot to talk about” (audio - 2m).