WSLCB - Board Caucus
(August 31, 2021)

Here are some observations from the Wednesday August 31st Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 2 takeaways:

• Board Member Russ Hauge encouraged agency leaders to give the issue of federal decriminalization, or potentially legalization, more consideration even as Board Chair David Postman commented that such a change wasn’t expected soon.
  • Hauge shared that board members had been sent a letter from a licensee, “Mr. [James] Dusek,” Owner of the Downtown Cannabis Company. The letter indirectly raised the issue of federal legislation to legalize cannabis, which Hauge felt “has been coming up more and more lately.” He’d discussed it with Policy and Rules Manager Kathy Hoffman and members of the WSLCB Management Team, but was “pretty pessimistic" about the odds of change at the federal level. Hauge described a sense that “there is so much other work that needs to be done that” federal action reforming cannabis laws was “not gonna happen any time soon” (audio - 3m, video).
    • Hauge viewed regulators in Washington as spending increasing amounts of time and energy on “issues that relate not so much to the market that we have now that was designed in Initiative 502, but what the market’s going to look like when the feds do decriminalize.” Considering decriminalization of cannabis nationally “the kickoff bell" for interstate commerce, Hauge asked those present to spend “time thinking about what we would like to see the system look like when it is nationally legalized so that we’re not caught unawares.” He encouraged them to consider “what about the current system would we recommend preserving, what would we recommend changing?”
    • Hauge also believed it would be prudent to seek legal advice “about what will inevitably change, such as interstate commerce” as it wasn’t “too soon to start thinking in those terms.” His guess was that federal change would happen in “no fewer than two years, but probably no more than five.”
  • Postman agreed there was no chance of the change happening “immediately,” noting that he’d seen comments from the U.S. Senators who drafted the Cannabis Administration And Opportunity Act (CAOA), “saying ‘Well, this isn’t going to pass.’” Nonetheless, he supported Hauge’s call for more thought on the topic and said agency staff were “looking very carefully at” CAOA for changes or areas of “incursion into territory that we think states’ rights should maintain.” An issue Postman said he was working to “get my head around” was the idea that state officials should “be ready to have Washington’s industry become national leaders.” He indicated that while people wanted “every Washington industry to be the best,” and that even Governor Jay Inslee “who appointed us, loves to brag about every Washington business,” including cannabis, Postman thought the claim was complicated “because it has to do with our current policies and enforcement” (audio - 2m, video).
  • Mentioning staff review of the CAOA draft, Postman acknowledged any discussion of the issue with the full board would constitute an open public meeting, further stating, “it’s time for that.” He was unsure of the best format, and whether a discussion would rely on staff or include other stakeholders, but wanted a “purposeful” conversation (audio - 2m, video). 
    • Hauge commented that a review of what staff had already done would be most appropriate but also favored “a public discussion with our license holders about what they would like to see preserved of our current system.”
    • Postman agreed to that idea, wanting to know more about CAOA and where the draft bill “rubs up against things that concern us.” He added that Director Rick Garza’s July 15th update included mention of outreach from staff for Senator Patty Murray, who “seem very open to wanting to hear from us about, you know, where are those red flags.” He remained hopeful Murray could be “a good partner in [Washington,] D.C.”
      • A July 1st meeting between Garza and staff from Murray’s office focused on introducing the Cannabis Regulators Association (CANNRA), but also included participation by Postman and other WSLCB staff who relayed a 2018 handout on Marijuana Legalization in Washington State.
      • Garza told lawmakers on March 25th that agency staff would be forming a work group to consider federal legalization. At publication time, Cannabis Observer was not aware of the formation of an internal or external WSLCB work group on the subject beyond staff analysis discussed by board members.
  • Learn more about the CAOA draft from an initial announcement from Senator Cory Booker, as well as a fact sheet and a detailed summary. At publication time, the CAOA remained draft language and had not been introduced as a federal bill.
  • In June 2019, Oregon Governor Kate Brown signed Senate Bill 582 which established a system for legal import and export of cannabis, contingent upon such interstate commerce being allowed via federal guidance or legislation. The organization Sensible Markets advocates for similar legislation in other legal cannabis states.
    • Cannabis prohibition at the federal level had been enforced in states, in part, under the authority of the U.S. Commerce Clause, with a notable federal court case being Gonzales v. Raich.

• Policy and Rules staff had received little feedback on the tetrahydrocannabinol (THC) and Criminal History rulemaking projects, but potential interviewees were lining up to describe cannabis testing impacts.
  • THC (audio - 1m, video, Rulemaking Project) 
    • Hoffman said there was a listen and learn forum scheduled for September 9th and that “to date, we’ve received no comments on the draft conceptual rules...hoping to get something in the next couple weeks.” Drafting of the CR-102 was underway, and staff were “on target, at this point, for presentation of proposed rules to the board on September 29th.
  • Quality Control (QC) Testing and Product Requirements (audio - 1m, video, Rulemaking Project) 
    • Policy and Rules Coordinator Jeff Kildahl said that staff were working “with the economists from [Industrial Economics, Incorporated] IEc,” and had held “two scheduled weekly meetings.”
    • He relayed that agency representatives distributed “an invitation” on August 30th for “interview participants to help us understand producer/processor perspectives beyond the deliberative dialogues.” Kildahl said “up to 25” producer/processors would be selected “across the state” representing “all tiers and methods of production” to engage in “one hour interviews with the economist.” He observed that, “so far, we have received 30 responses.”
    • Officials were planning to host a listen and learn forum on a new set of draft conceptual rules “on or about” October 15th, with Kildahl concluding that a CR-102 would be ready “approximately December 8th, 2021.”
  • Criminal History (audio - <1m, video, Rulemaking Project)
    • Kildahl stated that there had been no comments at the public hearing held on August 18th and the CR-103 to adopt proposed changes to the license applicant and renewal background check process would be presented to members the following day at the September 1st board meeting.