WA House COG - Committee Meeting
(October 21, 2021)

Here are some observations from the Thursday October 21st Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 5 takeaways:

• Cannabis Regulators Association (CANNRA) Executive Director Gillian Schauer, a former Washington State Liquor and Cannabis Board (WSLCB) contractor, informed legislators about delta-8-tetrahydrocannabinol (delta-8-THC) and other “novel cannabinoids” (audio - 12m, video, presentation).
  • Schauer gave a presentation on delta-8-THC to the Oregon State House General Government Committee on March 25th. She presented the opening keynote at the Public Health + Youth Prevention Marijuana Summit on September 28th.
  • Schauer told lawmakers she’d been asked by WSLCB leaders to provide “a bit of an A to Z about delta-8 and novel cannabinoids” in a presentation designed to “underscore the urgency of this issue in terms of consumer safety.” Making clear she was a public servant and didn’t “take any industry funding,” she stressed that she was offering her personal opinion and not the official position of any state or federal agency.
  • Schauer noted the “more than a hundred different cannabinoids,” inclusive of tetrahydrocannabinol (THC) and cannabidiol (CBD), and asserted that “until recently, if you were talking about ‘THC’ it could be reasonably assumed you were talking about delta-9-THC.” However, the “last year has been replete with media articles about delta-8-THC and other novel cannabinoids,” she explained. Schauer indicated that the THC isomers had “the same molecular formula but a different arrangement of the atoms,” and said the World Health Organization (WHO) estimated that delta-8-THC was “less potent than delta-9,” or, “about 50 to 75% as potent.”
    • Washington law regulated cannabis as a controlled substance “under the definition of THC in terms of delta-9-THC” much like other legal cannabis states, Schauer stated. The 2018 federal Farm Bill legalized hemp and CBD production, she said, causing “a plethora of CBD production throughout the country” as “any part of [hemp], including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers” were now legal, provided test results indicating “a delta-9-THC concentration of not more than 0.3% on a dry weight basis.” Schauer remarked that CBD could be “synthetically converted, using a chemical reaction, into delta-8, delta-9, or delta-10-[tetrahydrocannabinol] THC” involving “safe solvents or unsafe solvents...and acids” which could similarly be safe or unsafe for human consumption. The Farm Bill left isomers and novel cannabinoids found in hemp plants “in a gray area of legality largely outside of regulatory control at present,” she commented, and also “widely available online.”
    • Schauer added that “a clarification” had been issued by the Drug Enforcement Administration (DEA) in August 2020 which stated that “all synthetically derived tetrahydrocannabinols remain schedule I controlled substances” - but didn’t define “synthetically derived.” Schauer conveyed that left “this issue to the states.”
    • “A range of delta-8 and delta-10” products were being sold to the public, “largely vapes, edibles, oils,” as well as “smokable” items, Schauer told lawmakers. The products were promoted as “a high without the mental side effects like paranoia,” she commented, and advertised using claims of medical benefits.
  • Possible “health and safety risks” from the compounds included psychotropic effects, meaning products containing them could “be intoxicating,” however, they lacked the regulatory controls in place for “other intoxicating cannabis products.”
    • Her greatest concern was “the consumer awareness issue,” as rules around testing, packaging, and labeling of hemp products were nowhere near as stringent as they were for legal cannabis items.
    • Schauer noted the U.S. Centers for Disease Control and Prevention (CDC) sent out a health advisory on September 14th claiming 660 cases involving delta-8-THC were reported to poison control centers nationwide. She highlighted a report in Michigan where two children ingested gummies with the compound and were sent to the intensive care unit (ICU) following slowed breathing and heart rates, giving her understanding “that both were OK, but this is certainly a consumer safety issue that’s urgent.” Youth access to the products was another concern for Schauer, who indicated items were “much easier” to access online as age verification measures varied.
      • On June 29th, WSLCB staff reported that they’d reached out to the Washington Poison Center (WAPC), the Washington State Department of Health (DOH), and the Washington State Board of Health (SBOH) but found “there haven’t been any adverse events reported” in the state related to delta-8-THC. Cannabis Observer reached out to WAPC that same month, and staff confirmed they added a tracking code for delta-8-THC in March, but had not documented any cases involving the compound since that time.
    • Testing was another subject Schauer was worried about, as “the process of creating delta-8 and delta-10 can leave contaminants and byproducts” but had none of the testing rules applied to legal cannabis items “nor are there testing records if a recall was needed.” She cited the U.S. Cannabis Council (USCC), which “tested 16 of these products purchased from the legal hemp marketplace” and found that although all contained delta-8-THC, “some contained delta-9” with a “mean concentration” over 3% - or “ten times” the amount of the compound allowed for hemp. “Lead was detected, other metals were detected, residual solvents were detected,” Schauer stated, as well as compounds of “unknown identification” which she considered “perhaps the most concerning” health risk for consumers and the public. She mentioned the wave of vaping associated lung injuries (VALI) in 2019, “that was borne out of largely unregulated products from illicit or informal sources” that hadn’t been tested and contained “ingredients with unknown safety profiles.”
  • Schauer also noted the presence of “this parallel market where intoxicating cannabis products are sold...fundamentally undermine[s] the success and future of” the legal cannabis sector in Washington.
  • While certain novel cannabinoids had gained the attention of elected officials at the moment, she anticipated “a range of synthetic compounds that are not natural to the cannabis plant,” naming Tetrahydrocannabivarin (THCV), Tetrahydrocannabiphorol (THCP), and THC acetate ester (THC-O-Acetate). All the compounds were “being derived from hemp,” Schauer noted, highlighting a THC-O-Acetate patient advisory Oklahoma officials issued on October 18th. She hoped to avoid having regulators “play whack-a-mole” against emerging compounds.
    • Some research has found significant levels of naturally occurring THCV in cannabis plants whose genetic lineage traces to specific regions.
  • Wrapping up, Schauer drew attention to “the quantity of legal delta-9-THC that’s allowed to be in legal hemp products,” pointing out the “dry weight” criteria in the Farm Bill meant the possibility of obtaining “much more THC in a concentrated form.” She noted a Rolling Stone article describing the loophole that allowed hemp items with “the same amount of THC in [them] as what’s legally allowed in the adult use marketplace.” The response of state officials had varied, Schauer said. In some places, the products could be in legal markets while “other states have opted to outlaw these products” or only allowed their sale “within the context of the hemp regulatory framework.” However, the majority of jurisdictions “opted to outlaw these products in the hemp market,” she commented, only permitting their sale in a state’s legal cannabis sector, or adding restrictions like serving sizes. Other state officials were considering “regulatory authority over other cannabinoids,” Schauer remarked, along with “broader regulatory authority” for all synthetic cannabinoids.

• Justin Nordhorn, WSLCB Director of Policy and External Relations, offered lawmakers an overview of “high level challenges,” and “updates from some of the work over the last year or two” (audio - 8m, video, presentation).
  • Ongoing COVID Restrictions
    • The coronavirus pandemic necessitated an “emergency response” from agency staff, Nordhorn stated, that involved “adaptation and allowances for businesses to continue to operate, be successful, with public health and safety in mind.” This featured a “pause on enforcement,” in some areas, he told the committee.
    • Nordhorn indicated that some guidance to licensees in the context of the emergency conflicted with the Revised Code of Washington (RCW) and “we didn’t feel like we could continue working with those” as the pandemic seemed to subside. However, “since the pandemic emergency has not ceased,” some temporary allowances were extended. Staff had looked at the allowances and engaged stakeholders, he observed, and decided to continue curbside cannabis service by licensed retailers to help protect “consumers, especially the patient community.” Giveaway restrictions had also been modified to allow for distribution of masks or hand sanitizer, in addition to “walk up windows” for retail sales.
    • For licensed producers and processors, Nordhorn reported that the pandemic had contributed to “childcare challenges,” and that allowances for minors to be present at facilities in the company of a licensee parent or family member were continued as the restriction “was not a state law.” 
  • Social Equity
    • Nordhorn cited Board Member Ollie Garrett’s involvement in the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) as well as agency staff who “discuss things” with task force members “weekly.” This allowed WSLCB officials to inform task force members as to any “limitations that we may have” to ensure “the recommendations end up in the appropriate locations.” Nordhorn indicated regulators were preparing to act on the group’s required input on the social equity licensing program, and endeavored to be “in a good position to be able to facilitate those changes.”
      • The WSLCB board would be presented with a new social equity rulemaking project at their October 27th meeting. The CR-101 framed the effort as “considering new rules in response to future recommendations of the Social Equity in Cannabis Task Force, and changes to current rule that will reduce barriers to entry in the legal cannabis market.”
    • Nordhorn said WSLCB had also hired a “diversity manager,” Jim Weatherly, to lead on diversity, equity, and inclusion (DEI) efforts at the agency, “moving positively in those directions.”
      • Weatherly was introduced during the October 19th board caucus (video, audio - 3m).
  • Hemp-Derived Cannabinoids 
    • Nordhorn referenced the issue of synthetically created cannabinoids, stating that WSLCB staff were looking at the problem from a national perspective with CANNRA members because “everybody’s facing the same challenges.” He called attention to an agency rulemaking project on cannabinoid regulation and how representatives were “preparing some legislative asks that you’ll likely see in the” 2022 legislative session. Nordhorn stated that stakeholder feedback had already been solicited and incorporated into prospective legislative language. Additionally, policy and interpretive statements made clear the position of regulators and the board “that synthetic delta-8 and nine would not be allowable in the current system,” he said. 
  • Uncertainty of Federal Legalization
    • Agency leaders had reviewed a federal discussion draft of the Cannabis Administration and Opportunities Act (CAOA), Nordhorn told committee members, to consider “how is this gonna unfold federally.” He stated, “our plan is to provide some responses to our congressional members” as well as flexibility in agency rule. “We know that we started out with a tightly controlled and regulated marketplace, and that was the intent,” Nordhorn commented, but after several years the agency was prepared to look for areas to “loosen up” and allow cannabis licensees to “run their own business.” He said concerns about the CAOA were that “under the current language” there were potential negative impacts to the social equity program and “our medical patient community.”
      • Preparation for national legalization was also a subject discussed at the Washington State Cannabis Summit hosted by the Cannabis Alliance on September 24th, and subsequently by Nordhorn with board members on September 28th.

• Director of Legislative Relations Chris Thompson provided a legislative briefing to lawmakers emphasizing the outcomes of enforcement reform and hinting at draft legislation (audio - 18m, video). 
  • Thompson began by claiming that the authors of Initiative 502 “very intentionally created a tightly regulated market for what was then the first legal, adult use, cannabis program.” But there’d been “a lot of reasons to move beyond...that posture over time,” he said, mentioning SB 5318 in 2018 which had reformed how “Washington state approaches oversight and enforcement of the cannabis market.”
  • Turning to “agency wide efforts” around enforcement reform, Thompson stated that such efforts had increased after adoption of SB 5318, including changes to cannabis penalties and their structuring with a “closer focus on the relationship to public health and safety,” as well as a voluntary consultation program. He said there was a greater emphasis on educating licensees and achieving compliance, then shared “some of the more important examples” of what had been achieved:
    • Staff had taken “off the table entirely the potential for license cancellation in....quite a number of violation categories,” according to Thompson, as well as the establishment of a “deferral option for licensees when there’s been” an administrative violation notice (AVN) and certain conditions were met. He found the “innovative” option gave “some leniency” for the AVN not to count against a licensee. Thompson further noted removing “a more strict penalty for a tier 3 grower than a tier 2  grower,” saying the “differentiation” had been questioned by “the advocacy of licensees and industry” with staff determining it “didn’t make as much sense.” 
    • Thompson identified other efforts, such as Director Rick Garza’s directive to contact “the community of consultant experts to bring in some outside expert guidance,” leading to the independent enforcement review conducted by Hillard Heintze in 2019. He asserted the findings and recommendations of the report had been implemented by early 2021 and that “within the cannabis side of the house” there was “a 50/50 split” between commissioned enforcement officers and “compliance consultants.” Consultants were unarmed and didn’t have law enforcement badges, creating “a different look and hopefully a different feel,” said Thompson.
    • Enforcement officers had revised “position descriptions,” he indicated, as well as “less prominent” badges, different training, and different uniform expectations. The “investigation of complaints” against staff in the unit “are led by our [human resources] department, not the Enforcement unit,” added Thompson, with assistance from the Washington State Office of the Attorney General (WA OAG) and “the relevant collective bargaining agent.”
  • Thompson said that within Garza’s office “a new legal and policy team” had been created under the leadership of Nordhorn which involved staff handling rule and policy coordination with “a strong focus added” on external relations and engagement. Thompson said the group’s policy and interpretive statements were a “one stop repository” for agency positions and intentions, leading to “stronger consistency in how we work.”
    • Thompson emphasized an interpretive statement on “what marijuana retailers can and cannot sell” which addressed what he called a “conflict” in statute. As the retailer statute limited sales to, “basically, marijuana products and paraphernalia only,” he explained the belief of staff that shops couldn’t “sell standalone CBD products” except for cannabis health and beauty aids (CHABA), which could have “no THC in them.”
  • Thompson concluded with brief remarks about potential agency request legislation on novel cannabinoids, telling lawmakers that WSLCB staff shared Schauer’s health and safety concerns after having seen “hundreds of reports of adverse health effects.” Agency staff had “moved beyond” the last publicly released draft and were endeavoring to conclude internal discussions on “the most sensible proposal.” Thompson hoped to have a new draft to show legislators, the Washington State Office of the Governor (WA Governor), and stakeholders “fairly soon.”
    • Agency representatives hosted a webinar dedicated to the request bill on September 27th.

• Kendra Hodgson, Cannabis Examiner Manager, provided an update on cannabis testing laboratories, covering lab certification and the Cannabis Science Task Force (CSTF, audio - 6m, video).
  • Hodgson reported that there were 11 labs in the state accredited to provide cannabis testing for licensees.
    • Five labs had obtained optional certification for pesticide testing and three maintained heavy metals certification. These testing areas were optional “as pesticide and heavy metal testing is not yet required for recreational product.”
    • Of the 11 labs, nine were located in Western Washington, and two were in Eastern Washington.
    • All labs were “reviewed annually after they receive their initial certification and must participate in two rounds of proficiency testing each calendar year to maintain their certifications to test.”
  • Hodgson reviewed HB 2052, which formed the CSTF, and on which she served as WSLCB representative. She stated that the group was composed of representatives from state agencies and private labs in the state, having met almost monthly since August 2019, with work groups “tasked with making recommendations for the lab standards.” The first CSTF report to the legislature was delivered in June 2020, Hodgson noted, with the second and final report on a “wider range of testing topics...due in December of 2021.” A third report would be given to WSLCB leaders “in a memo format” to become part of the “implementation work” of the ICT.
    • This process was talked about during the CSTF meeting on October 25th in the “Sun Setting the Task Force” agenda item.
  • The “vital” work for 2022, she said, hinged on “critical legislation” which would be requested jointly by WSLCB and the Washington State Department of Agriculture (WSDA) to create an interagency coordination team (ICT) between themselves and DOH, a “multi-agency effort to move recommendations from the cannabis science task force forward.” Hodgson described the ICT as developing cannabis testing lab standards which would be encoded by WSDA. Though there remained “quite a bit of work to do,” she commented that staff collaboration continued towards “the successful transfer of lab accreditation to the Department of Ecology in 2024.”

• Chief Financial Officer (CFO) Jim Morgan brought the committee up to speed on the Cannabis Central Reporting System (CCRS) which the agency planned to use instead of seed-to-sale cannabis tracking software (audio - 9m, video).
  • The state’s traceability software, Leaf Data Systems, and the vendor providing it, MJ Freeway, had been accused of numerous problems which were not adequately addressed by a final system update in July 2019. Further development was halted in favor of maintaining stability and a transition to the CCRS was announced publicly on August 11th. Morgan last reviewed the project with the board on October 13th.
  • Morgan, identifying as the CCRS “executive sponsor,” stated that he would contextualize the intention behind the agency push for the change, which he termed “well underway.” The move to a reporting system was a response to “a number of aspects of our regulation of the industry,” he said, primarily around what information WSLCB staff needed to ensure compliance. The design for the CCRS incorporated some stakeholder feedback, Morgan claimed, from “late 2019 and early 2020” which had been “put on the shelf for a little while.”
  • As the Leaf Data Systems contract would expire in June 2022, Morgan stated staff had evaluated their data needs to consider what the process “could and should look like going forward.” Morgan said staff pared down reporting requirements to “what is absolutely necessary for” regulators to meet their responsibilities. The determination was reached to have “an in-house system for reporting,” he said, instead of extending the agency partnership with MJ Freeway. 
  • Morgan called CCRS a “reporting system only” and framed the move as WSLCB “getting out of the way” of the cannabis industry. Agency officials could receive and maintain reports in a database with no “business rules built into the system that create opportunities to stop transactions from happening,” he said. The “flexible” nature of CCRS was “simpler” and might entail fewer associated costs for licensees, but Morgan warned the committee that by removing WSLCB from “the transaction flow” within the cannabis sector, businesses could no longer rely on a shared traceability system for “facilitating transactions between licensees.” Such transactions would no longer be an “automated process,” he indicated, as “that positive piece is going away.” Morgan noted that third-party integrators were working together “to facilitate that process so they won’t be stuck with just manual processes.”
  • Morgan went over the communications plan for CCRS, saying “ongoing updates” for the system were being distributed via listserv and trade association leadership. He expected the system to go “live” in December 2021.

Here are some observations from the Thursday October 21st Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• The first panel from the Washington CannaBusiness Association (WACA) gave a presentation on the state of cannabinoid regulation and what more could be done along with improving social equity.
  • Joseph DuPuis, Doc and Yeti Urban Farms Owner and WACA Board of Trustees Member, started off by describing his business as “craft cannabis” and explained that he was attending MJBizCon in Las Vegas, Nevada, where industry participants collaborated and networked “in learning about new products and services.” DuPuis remarked that compared to “our counterparts across the nation,” he’d found Washington to be “an outlier in sometimes its prohibitionist approach and has missed some significant opportunities” since voters legalized the plant in 2012. He argued that more must be done to help small businesses like his prepare “to compete with our peers in other states pending federal legalization” (audio - 7m, video).
    • DuPuis considered WACA an organization that was “constantly focused on what is on the horizon, as well as what we should prioritize as an industry so that we acknowledge that [with] the 20th anniversary of the [Initiative-]502 passing we are still leading the world when it comes to cannabis policy, innovation, and excellence.” He believed a “significant part” would be “improving social equity” which he said could help “the existing system to benefit more people while also continuing to prepare our local workers, businesses, and industry for the next ten years.”
    • He commented that WACA members wanted “attention on policies necessary to align cannabis with other sectors and for your openness to what our industry continues to fight against when it comes to attitudes about adult use cannabis.” One possible change was removing the law limiting cannabis license ownership to residents of Washington, DuPuis said, as “current restrictions on access to capital have a negative impact on” businesses like his. “In Washington, if you’re not already sitting on a nest egg or if you don’t have access to an in-state network of wealth you are immediately at a disadvantage,” he added.
    • Washington state could “continue to be among the best” in legal cannabis, DuPuis commented, but had a “regulatory environment that attempts to pick winners and losers rather than allowing the market to evolve through competition and innovation.” He considered the state cannabis sector to be “at odds with other states, including our immediate neighbor to the south, Oregon.” 
    • DuPuis felt Washington State Liquor and Cannabis Board (WSLCB) leaders were still prioritizing unnecessary regulations to the detriment of the “traceability system, public safety, as well as preventing diversion into the illicit market,” and asked for lawmaker action to ensure the state remained a leader on cannabis policy. “To be fair, the industry regularly cannibalizes itself,” he believed, through “use of anonymous complaint[s]...system to undermine competitors by leveraging eager anti-drug enforcement and investigation.” DuPuis urged officials to reach out “to me and others in WACA about what we do.”
  • Shannon Vetto, Evergreen Market Chief Strategy Officer and WACA Board of Trustees Member, told the committee her previous professional “experience was in global capital markets and accounting,” which gave her insight into “executive business transactions in highly regulated markets.” She noted she was also a member of Women Empowered in Cannabis, and found that regardless of the commodity, “it’s difficult to craft sound policy without first defining the economics” (audio - 7m, video).  
    • Vetto reported that WACA leaders had “retained High Peak Strategy,” an economics firm run by Spencer Cohen, “an economist with extensive experience evaluating economic contributions of business sectors across our state.” She promised his firm would submit “a final report with you later this year.”
    • Key figures Vetto highlighted:
      • “In 2020, licensed cannabis businesses directly supported 11,330 jobs across the state.”
      • “In accounting for indirect and induced impacts, the cannabis industry supports a total of 18,360 jobs in Washington, associated with $2.7 billion in total business sales and $868.9 million in labor income, including wages and supplemental benefits.”
      • “For every 10 jobs in the cannabis sector, an additional six jobs are supported through either indirect or induced efforts.”
    • “We should be proud of the cannabis industry’s track record for creating jobs of all kinds across the state,” Vetto commented, as well as the “contribution of the sector to public services” via tax revenue. She said that between fiscal years (FY) 2015 and 2020 “cannabis excise tax revenue grew 152%, that’s the equivalent of 26% per year.” In that same time period, Vetto indicated, total revenue growth for the state was “only 32%.” She said “when accounting for public tax revenue, contributions of indirect and induced economic activity by the cannabis sector, the total tax impact” from the cannabis sector had been “$695.4 million.”
    • Considering the history of the regulated cannabis market, Vetto viewed economic contributions from the cannabis industry as “still nascent.” Going forward, she wanted the economic discussions around the plant to include social equity “as we discuss business challenges today, and on the horizon.” She felt out-of-state financing and limits on the number of retail licenses a single owner could hold led to her “painful decision to look to other states rather than having the opportunity to continue to invest in our communities here at home.” Vetto felt this put state businesses “at a severe disadvantage” when looking to compete in an eventual national market.
    • “The initial startup costs for a retail location ranges from $500,000 to $2 million,” Vetto told committee members. Brands licensed from companies outside Washington were competing with brands established here, she asserted, “making it more difficult for us to uphold the quality and consistency for our customers.” Believing the state to be “saddled with constraints that limit local businesses’ ability to scale,” she warned that the state could be “left behind.”  
  • Vicki Christophersen, WACA Executive Director and Lobbyist, began by speaking to social equity efforts, stating WACA members were “deeply committed to the work of addressing disparities and equity in the marketplace” and the “relentless pursuit of what should be an equitable system in Washington.” She said the best role for the established cannabis sector was “to listen” while noting a position paper members of the organization shared in January, so as to avoid “jumping ahead of the important work and conversation of the [social equity] task force” (audio - 6m, video).
    • Christophersen spoke to ongoing enforcement reform at WSLCB and the independent enforcement review undertaken by Hillard Heintze in 2019, saying “we’re pleased to see the agency has begun” implementing changes. She acknowledged “lopsided” fines and penalties had been significantly revised by agency leaders.
    • Christophersen praised particular WSLCB staff while highlighting other positive changes at WSLCB.
      • Director of Licensing and Regulation Becky Smith had facilitated “collaborative interactions with the licensing division” where leaders including were “responsive, nimble, and open to new ideas,” she noted, like a “simplified process for licensees to make simple changes to their license” such as floor plan alterations.
        • Smith described the transfer of several licensing tasks to customer service personnel on September 8th (audio - 2m, video).
      • Christopherson hailed Director of Enforcement and Education Chandra Brady as another person at WSLCB who listened and acted upon concerns raised by WACA members, calling her leadership “key to ongoing culture change at the agency.”
      • She also lauded the work of WSLCB Chief Financial Officer (CFO) Jim Morgan, claiming he’d brought “a new focus and a sense of urgency to resolving the traceability issues.”
    • Christophersen encouraged continued changes at WSLCB “with an eye towards the scope of the responsibility they now have” as the “bias regarding cannabis and the people in the industry still exists in society and it stands to reason that it still exists in some at the agency.” She assured lawmakers that when WACA members “express frustration, we don’t do it flippantly, and we do it with legitimate concern.” Christophersen concluded by noting that the organization would settle on its legislative agenda for 2022 at their Fall Policy Conference.
  • Brad Douglass, The Werc Shop Vice President of Intellectual Property & Regulatory Affairs and a WACA member, gave a presentation from his “position as a scientist” with “long standing participation in the legal cannabis industry” (audio - 7m, video, presentation):
    • He first went over reasons he believed I-502 was approved by voters:
      • “Disapproval of cannabis criminalization and inequitable harm to our communities
      • Approval for regulating cannabis to make it safer and to sanction for adult-use
      • Desire to eliminate the dangers of underground manufacturing
      • Belief that cannabis offered wellness/therapeutic benefits beyond a single active constituent (cf. dronabinol)
      • Support for research into the benefits AND/OR hazards of cannabis
      • Understanding that there is much more to learn about cannabis and the oversight necessary to help protect public health and safety”
    • Those who drafted and implemented the initiative “used liquor regulation as a model,” Douglass asserted, “something that we knew.” This turned out to be a “simplistic regulatory framework,” he argued, that was “at odds with each of the motivations for cannabis legalization” he’d cited. Douglass said “regulators have been prevented from wading into the complexity of the cannabis plant” and asserted that “prohibition of naturally occurring cannabis compounds in regulated systems is now forcing these compounds back into the illicit marketplace.” Regulations based around “one or, perhaps, two compounds has been a disservice to those medical patients that were folded into the 502 system.”
    • State officials needed to “carefully respect innovation, but not fear it” Douglass commented, indicating that delta-8-tetrahydrocannabinol (delta-8-THC) had become available “outside of the regulated marketplace, to children, over the internet, in gas stations.” Wanting to keep “cannabinoids that get people high in the regulated system,” he added that delta-8-THC “psychotropic activity also comes with medical properties.” Douglass said compounds like delta-10-THC and tetrahydrocannabiphorol (THCP) were similarly psychotropic and policy makers needed to “do a better job of squaring the botanical reality with our legal/regulatory system.” He called for expanded “cannabinoid authority” for WSLCB staff with a goal of allowing “all compounds found in cannabis” to be sold in the legal market to adults following proper testing.
      • Read the third draft of the proposed request bill which was released by WSLCB staff on November 1st, including a summary of its provisions, and a one pager.
    • Douglass shared a “daunting roadmap” calling for a “clear” definition on “what cannabinoids are permitted, what are prohibited so that we can move forward with understanding” the difference between artificial and synthetic cannabinoids. Since some substances were “THC-like, that do, in fact, get people high,” he asked for them to be regulated similarly to delta-9-THC.
    • Douglass was a panelist for the WSLCB Deliberative Dialogue on Cannabis Plant Chemistry on June 3rd and spoke at a WA House COG meeting in September 2020.
  • Chair Shelley Kloba thanked the panelists for their remarks, saying she knew that WSLCB officials had been trying to “get all the facts necessary” to make regulations (audio - 1m, video).

• Representatives of the Cannabis Alliance shared a letter on their priorities for cannabis businesses and for medical cannabis patients.
  • Caitlein Ryan, Interim Executive Director and Board President, stated that Alliance members were “dedicated to the advancement of a vital, ethical, and sustainable cannabis industry.” She said the group’s principles were “firmly planted in advocating for the needs of our medical community” as when “patients are ensured safe and equitable access, traditional adult use markets benefit as well.” She testified that the patient community had “experienced a low rate of confidence in the safety of Washington regulated cannabis” and promised to address potential remedies (audio - 2m, video).
    • See Ryan’s discussion with WSLCB Board Chair David Postman at the Washington State Cannabis Summit on September 23rd.
  • John Kingsbury, Patients United representative and chair of the patient caucus of the Cannabis Alliance, noted that in 1998 there had been public “recognition of the need for medical cannabis.” However, “since the passage of Initiative-502, other than some unrealized commitments contained in [SB] 5052, creating appropriate access to medical cannabis has largely been ignored” (audio - 1m, video).
    • Kingsbury reported that since 2017 “50% of qualified patients are not accessing the regulated system, and that statistic appears to be trending in the wrong direction.” Acknowledging there were multiple reasons, he summarized key barriers as a “lack of trust” in legal cannabis “product hygiene” and insecurity regarding the “legal status” of patients.
    • A continued lack of attention by lawmakers to “appropriate access” to medical cannabis was “untenable” according to Kingsbury. “Years of neglect” couldn’t be remedied in a single legislative session, he granted, but “the Alliance does have some very good ideas about where to begin, like improving quality assurance testing,” which “can no longer be delayed.”
      • In October 2018, Kingsbury filed a petition on pesticide testing with WSLCB.
      • Kingsbury also filed a petition with WSLCB to require medically endorsed retailers to stock and offer medically compliant products for sale.
  • Lara Kaminsky, Cannabis Alliance Government Affairs Liaison, continued on the subjects of “adequate quality assurance testing” and testing lab standardization (audio - 2m, video).
    • While quality control was a “primary reason patients are staying out of the regulated market,” she termed it a “significant health and safety concern” for all consumers, saying their group had advocated for the change “for quite a while, since 2016.” Kaminsky was under the impression WSLCB leaders would “have updated quality assurance rules by the end of this year that will address pesticide testing” as the topic “could no longer wait.”
    • Kaminsky also noted the Alliance involvement in the Cannabis Science Task Force as the group made “recommendations for the oversight and accreditation of cannabis testing labs by the Department of Ecology (DOE).” This effort was “helping the State start to address the ongoing problem of inconsistent test results between labs,” she remarked. Noting its scheduled conclusion in 2024, Kaminsky shared the perspective of the group’s membership that “this is more than adequate time to establish this vital state oversight.” 
  • Ryan next discussed Alliance positions on the traceability transition, medical cannabis terminology, and synthesized cannabinoids (audio - 3m, video). 
    • Ryan was gracious to WSLCB staff for taking input on “improving traceability by moving away from Leaf Data [Systems] to the new Cannabis Central Reporting System” (CCRS). However, she found “the short timeline to come into compliance with the new, dramatically different, audit-based system” to be a serious challenge without “regulatory support.” She thanked Micah Sherman, Raven Co-Owner and a Washington Sun and Craft Growers Association (WSCA) board member, for helping lead third-party software integrators and laboratories in a collaborative effort that included the Cannabis Alliance to “agree on, and implement, a method of systems communication.” That step---which she noted was absent from the WSLCB “transition plan”---would help ensure cannabis licensees “are not restricted to doing business with only partners who share the same technology vendor.” Ryan asked that the “robust” effort be supplemented by “an official compliance grace period of at least three months.”
    • Another of the “safe regulatory practices” Ryan mentioned would “alleviate tension in the discussion regarding structure and function claims on packaging.” She noted that cannabis regulating agencies like WSLCB  used “the term ‘medical marijuana’” routinely in official documents, “however, the LCB labeling department does not allow industry to use the term ‘medical’ anywhere on our packaging.” Ryan commented that there was a need for “agreed upon terminology to identify medical cannabis” and suggested the phrase “medical-grade cannabis” as this referenced quality and “not the therapeutic effects.” She asked that lawmakers pass legislation directing WSLCB staff “to allow this verbiage on our packaging.”
    • “Artificial and synthetic cannabinoids, including delta-8, and [cannabidiol] CBD-derived delta-9, has been an ongoing and challenging conversation,” she stated. After learning a lot, “the Cannabis Alliance does not have confidence that we have learned enough to pass legislation that would create a pathway for artificial or synthetic cannabinoids into the regulated market.” Giving “full throated support” for delta-8-THC to “be firmly under the regulatory authority” of WSLCB staff, Ryan nonetheless found “any additional action would be premature to understanding the public safety impact of any new rule and subsequent enforcement.”
  • Kingsbury told the committee it “was past time to approve the right to home growing” and that although “most adults will not choose to grow at home” the right would remain “critical” for “those who will choose to do it.” As Washington was “an outlier in denying this right to its citizens,” he commented that the actual impacts were “well known, there have not been adverse effects in other states as a result.” Home growing wouldn’t amount to “a social experiment,” Kingsbury believed, as “almost all legal states” already permitted the practice, and officials would be following a “well worn path” (audio - 1m, video).
    • At publication time, HB 1019 ("Allowing residential marijuana agriculture") remained active legislation that could be taken up during the 2022 legislative session.
  • Kaminsky mentioned a report commissioned by the group, 2020 Contributions of the Washington Cannabis Sector, had found “extremely compelling evidence that the addition of a modest home grow provision...would have a profound positive impact on revenue to the state.” She said this was a “similar outcome to the craft beer industry with the development of home brewing” which had resulted in a more involved consumer base and higher quality products (audio - 1m, video). 
    • Find out more about the cited research from its presentation to WA House COG members on January 15th and during comments before the Washington State House Appropriations Committee (WA House APP) on February 9th.
  • Kingsbury talked about the “legal vulnerability” faced by many patients from state institutions “openly hostile and skeptical to us” and lifting the excise tax off medical cannabis (audio - 2m, video).
    • He said otherwise qualified patients were opting to “stay outside of the regulated system, rather than working within it,” according to patient surveys he’d conducted since 2017. Kingsbury asserted that “to break that mistrust the legislature should pass HB 1105 with arrest protections for qualified patients” complying with state law. This would be a powerful sign that “the state does not see us as criminals first,” he remarked.
    • Feeling that the state must “arrive at a point where all products are tested,” he suggested a “good first step” would be for the legislature to pass SB 5004 to exempt the excise tax on “medical grade products for patients who are registered in the database.” This could lead to more compliant products and affordable costs, Kingsbury reasoned, taking “sales directly from the illicit market.”
      • Kingsbury testified before the Washington State Citizen Commission for Performance Measurement of Tax Preferences (WA Commission for Measurement of Tax Preferences) on September 9th in regards to a review of cannabis tax exemptions available to medical patients.
      • Learn more about Kingsbury’s involvement in the development of SB 5004, legislation removing the excise tax on medically compliant products for patients registered with the Washington State Department of Health (DOH) in the patient database. Sponsored by Senator Karen Keiser, the bill was heard on March 16th and remained active through the 2022 legislative session.
  • Ryan added that “any lack of equity for all patients is compounded and disproportionately impacts our community’s members of color” in addition to “the makeup of our industry due to unjust barriers to entry for licensure.” She said that Alliance members supported the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), were “impressed” by the recommendations under discussion, and planned to advocate for those positions in 2022 (audio - 1m, video). 
  • Kaminsky brought up legislation that could “go a long way in addressing many of the issues that we’ve raised today,” a “powerful solution whose time has come.” SB 5365 (“Establishing a Washington state cannabis commission”) was the latest bill on the topic that had been lobbied for by organization members, she commented, having heard “time and again that the one element that we really need” was “scientific research” which could be undertaken by such a commission. Kaminsky also thought research could cover “the impact of industry innovation such as delta-8 conversion” or the “financial impacts, market penetration, and success of legalization.” She differentiated commission research from “private research,” saying the former could be shared publicly “to help the entire industry” by way of “democratic and equitable access to knowledge and information” (audio - 2m, video).
  • Ryan closed by saying Cannabis Alliance members would be a “source of information and education as well as a collaborative partner” for lawmakers (audio - <1m, video). 
  • Kloba offered committee members’ gratitude for the panelists’ participation (audio - <1m, video). 

• A panel from the Washington Sun and Craft Growers Association (WSCA) focused on “the structure of the cannabis market” and their opposition to synthetic cannabinoids being permitted in regulated cannabis products. 
  • Shawn DeNae Wagenseller, Washington Bud Company Co-Owner and WSCA Board Member, testified that the group was “100% licensee led” with a mission to “advance and protect the interests of sun and craft cannabis growers through the development of rule and law that supports an economically and environmentally sustainable cannabis industry” (audio - 1m, video). 
  • Micah Sherman, Raven Co-Owner and WSCA Board Member, stated that WSCA members were focused on defining “craft cannabis” in a “similar manner to how we’ve done for breweries and spirit producers.” Considering “the structure of the cannabis market,” he said the aim of the group was to help create a “more resilient and durable small business ecosystem.” Citing his involvement as a WA SECTF member, he articulated equity as “the principle of fairness” that needed to be broadly implemented across the cannabis sector “so that all of our businesses can thrive, produce quality product, create great jobs, and continue to exist within a small business ecosystem” (audio - 9m, video). 
    • Washington needed an equitable state cannabis market before a “pivot” to compete in a national one, Sherman argued, bringing up his work lobbying for craft cannabis legislation. The concept allowed for small cannabis producers to “operate in a similar way to craft brewing,” he observed, saying a new “simplified” version of the legislation was being drafted for 2022 based on the “endorsement model for the alcohol industry.”
    • The new bill would also allow producers with a craft cannabis endorsement “direct access to their consumers” that Shermain felt would repair issues of “trust” and “transparency” mentioned by other panels. He believed that Washington had been a state where “people got very accustomed to knowing their farmer” and purchasing from them directly, claiming that was “something that we lost in the transition to a regulated, recreational market.” Sherman remarked that craft cannabis was “all about” rebuilding the trust between producers and consumers and that “all of the issues that have been talked about around synthetic cannabinoids, the disruption that that’s had in our marketplace, a lot of those things would be less harmful in an economy that was more resilient.” 
    • Considering a future “national marketplace,” Sherman said that it remained to be seen if there would be federally-regulated interstate commerce, or an arrangement “where our state markets are able to create interstate compacts with each other.” The latter approach was what he thought would be most “resilient for all of our small operators,” adding that WSCA had reached out to “small farmer trade groups” in other states, looking for interest of governors “in west coast production states” to set up cannabis trade compacts without waiting for changes in federal laws.
      • In 2019, Oregon lawmakers prepared for interstate cannabis commerce via SB 582, contingent upon a change in the federal status of cannabis or issuance of an authorizing memorandum. Alliance for Sensible Markets, an Oregon trade group, advocates for “calling on governors of newly legal and legalizing states to reach out to Oregon Governor Kate Brown, who signed historic interstate commerce legislation in 2019, to discuss an interstate compact.”
    • Sherman next explained his involvement in WA SECTF, saying there were “a lot of great ideas that are going to be coming out” from the group, with many that “dovetail” with the priorities of WSCA members. Supporting “new businesses that come into this marketplace” was important, as he believed the cannabis sector was “pretty tough...and it’s not conducive to bringing in a lot of new people” in its current configuration. Sherman wanted a cannabis market that could welcome new licensees without “being afraid how that will affect us negatively.” He wanted to achieve adequate production capacity for “all of the products that we need for our regulated marketplace, we don’t need to be looking at importation to be able to supply those needs.” Sherman said Washington was “very far ahead” of other legal cannabis states and that more could be done to enhance “that resilient economy” and eventually become a “successful exporter.” He mentioned that WA SECTF members were also looking at new “paths to market” with new license types like delivery or social consumption that could bring about a “diversified” cannabis sector that provided better options for medical patients.
  • Ryan Sevigny, Landrace Brands President, High Tide Ranch Owner, and Board Member of both the Cannabis Alliance and WSCA, supported calls for a cannabis commodity commission, raised concerns about the traceability transition, and opposed cannabinoid synthesis (audio - 7m, video).
    • Calling Washington an agricultural “powerhouse” from his perspective having worked for “a decade in the wine industry,” Sevigny was confident commodity commissions were a contributing factor to the success of other crops in the state and could have “wide ranging and far reaching” benefits for the cannabis industry. Officials could make the state “a leader, again” by establishing a cannabis commission.
    • Speaking to the CCRS as a Traceability 2.0 Work Group member, Sevigny echoed Ryan’s remarks that it “absolutely can work” and lauded WSLCB staff for intending “cost savings” and “ease of use.” But, he said a “major piece” missing from the CCRS plan was “interoperability.” Sevigny noted the formation of the Washington Cannabis Integrators Alliance (WCIA) which sought to “solve our interoperability issues” and was a good example of industry collaboration to “accomplish a lot of common goals.”
    • Sevigny was supportive of the WSLCB policy statement on delta-8-THC and other cannabinoids announced on April 28th and the “Allowable Practices for a Holder of a Marijuana Processor License” statement on July 22nd. While WSCA members supported the “intent” of proposed agency request legislation on cannabinoid regulation to expand “the LCB’s authority over all psychotropic and impairing compounds of cannabis,” they were opposed to expanding rights of processors to engage in cannabinoid synthesis and encouraged lawmakers to hold off on that aspect of the draft legislation. Sevigny argued that since implementing HB 2334 in 2018 to allow importation of CBD as a cannabis product additive, the perhaps unintended impacts had been far ranging.
    • Sevigny wrapped up by suggesting that of the participating trade groups, “two of the three are representing very similar interests focused” on sustainable small cannabis businesses.
  • Wagenseller described WSCA support for quality assurance measures, concerns about dormant licenses, and opposition to synthesized cannabinoids (audio - 5m, video).
    • WSCA members “highly support pesticide testing, however, we’d love to do it under the Department of Ag[riculture]” instead of “arbitrary lot rules.” Recalling the “over 7,000” initial applicants, she noted “there are less than 500 of us now” and the remaining producers needed “protection.”
    • Saying there were “hundred and hundreds of unused, dormant licenses that can be acquired,” she then claimed “several” licensed producers had “blatantly ignored canopy restrictions and grow over their licensed limits.” Wagenseller called for “legislative support to sunset licenses held in speculation, similar to how law forces cannabis retailers to use it or lose it” - before enacting out-of-state ownership.
    • “Importation of hemp CBD...really threatened us,” Wagenseller stated, as did the “illegal conversion into THC.” Witnessing her company’s cannabis biomass sales “plummet” and the effect on producers like her motivated her advocacy in favor of “a closed loop system comprised of naturally balanced, plant-based products.”
    • Wagenseller predicted a “hefty omnibus bill in 2023 to address past legislative harms.”
      • She said 2014 legislation for “cannabis growers to not be treated like agriculture” had impacted local zoning of licensees.
      • SB 5052 “made qualifying conditions a political system,” Wagenseller argued. She noted her Lyme disease wasn’t a qualifying condition, and that such determinations should go “into the hands of doctors and out of the hands of politicians.”
      • SB 5318 “made progress in establishing compliance and reform with LCB officers,” she commented. However, she’d received a “notice to correct” during her first compliance check “because our sign-in sheet lacked a middle initial [box], even though there’s no [Washington Administrative Code] that states that rule.” This led her to believe there was more work to do around compliance checks.
    • For Wagenseller, protection meant allowing producers “privileges” similar to craft alcohol producers. “We saw how big alcohol nearly devastated the craft beer, wine, and spirits industry,” she said, adding “let us learn from that history.” She gave thanks to Kloba and Ranking Member Drew MacEwen for “supporting funding of the agricultural [certified] cannabis program,” to establish an organic-equivalent state standard for cannabis.
  • Kloba asked about HB 2334, saying the intent of lawmakers “at that time” was “to make sure that the CBD” being imported was tested “just like anything that originated within the 502 market.” As the legislation “predated” the 2018 Farm Bill, she wondered if public officials were now in a “different environment” where HB 2334 was “not working.” Wagenseller agreed, saying those licensed to produce “within our tightly regulated system” could grow any cannabis plant “whether it’s got less than 0.3% THC in it or not” to supply the state’s cannabis market. “Innovation can be done within the market,” she said, noting that HB 2334 had allowed “illegally grown and processed cannabinoids to come into our system” which she felt wasn’t helpful. “We need to reward innovation within the system” and encourage breeding plants with desired genetics, Wagenseller concluded, rather than accepting “cannabinoids from hemp” (audio - 4m, video). 

Here are some observations from the Thursday October 21st Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• Committee Counsel Peter Clodfelter provided a Washington State House Office of Program Research (WA House OPR) presentation on “organic comparable certification programs” and the committee chair confirmed efforts were underway to secure a 2022 budget proviso to complete rulemaking in Washington state.
  • 2017 legislation advised the Washington State Department of Agriculture (WSDA) to create a program which defined a state organic-equivalent standard for cannabis, as ‘organic’ is a federal labeling term. But the rulemaking project remained at the CR-101 stage allegedly due to budget limitations at the department. At publication time, the project was being overseen by WSDA Organic Program Director Brenda Book.
    • Washington State Liquor and Cannabis Board (WSLCB) staff talked about the hold up in February 2020.
    • Book commented on the project during a webinar on March 24th.
    • On April 7th, Washington SunGrowers Industry Association (WSIA)  Executive Director Crystal Oliver advocated for the state to finish the rulemaking as the absence of a standard hindered “organic and regenerative farmers from being able to effectively differentiate themselves on the shelves of our stores.”
      • WSIA was subsequently recast as the Washington Sun and Craft Growers Association (WSCA) in July 2021.
  • Clodfelter told the committee that organic-comparable certification “came up at a March 2021 work session” on the cannabis sector and he’d been asked by WA House COG Chair Shelley Kloba to “provide an update and summary...to the committee.” He mentioned that the programs he’d identified were voluntary and “generally relate to providing additional information to consumers about cannabis products as well as serving the purpose of enabling cannabis businesses to differentiate their products in the market” (audio - 1m, video, presentation). 
  • Noting a 2017 law, SB 5131, Clodfelter described how legislators had intended for cannabis to be voluntarily certified by the state “comparable to the national organic program” which led to “initial rulemaking activity” (audio - 1m, video).
    • Clodfelter said the rulemaking project for organic-comparable certification at WSDA was necessary as the term “‘organic’ is controlled by the federal government,” which continued a prohibition of cannabis.
    • He outlined relevant laws and organizations governing the federal organic program:
      • The Organic Foods Production Act - The 1990 law “Established uniform national standards for the production and handling of foods labeled as ‘organic.’”
      • The National Organic Program - “A program within the U.S. Department of Agriculture implementing the Organic Foods Production Act, setting standards for the production, handling, and processing of organically grown agricultural products, and overseeing mandatory certification of organic production.”
      • Organic Certification - “Verifies a farm or handling facility complies with the U.S. Department of Agriculture’s organic regulations and allows the farm or facility to sell, label, and represent their products as organic.”
  • Until federal cannabis reform included updates to these laws and programs, Clodfelter reported that the plant remained “ineligible to have an organic designation and businesses cannot get an organic certification through the national program.” He explained that Washington was one of several states passing “comparable types of programs” to allow for “a similar type of structure for cannabis” using the federal program as a “framework” (audio - 4m, video). 
    • Clodfelter said SB 5131 included an “authorizing framework for a comparable to organic cannabis program” within WSDA. He relayed that department staff were given rulemaking authority “to establish:
      • a) Standards for cannabis and cannabis products produced and processed in a manner consistent, to the extent practicable, with the National Organic Program; and
      • b) A self-sustaining program for certifying cannabis producers and processors as meeting the applicable standards.”
      • Rules could include a fee schedule “to provide for recovery of program costs,” Clodfelter noted, as well as provisions for “inspections, enforcement, and administrative penalties.”
    • The rulemaking project initiated by WSDA officials in October 2017 indicated their intent to file proposed rules, said Clodfelter, with staff confirming to the committee in December 2018 “that ‘Certified Cannabis’ was the term that was being discussed as a possible term.” He said WSDA representatives had also mentioned having fees “aligned with the fees that state department of agriculture charges for certifying organic producers under the national program.”
    • Clodfelter confirmed that no draft rule language had been prepared, but conceded “the legislature did not require the rules, it simply authorized them.” Moreover, the program hadn’t been “specifically appropriated funds in the state operating budget.”
  • Pointing to the timeline for the project, Kloba observed that the certification was “something that the industry has wanted for a while and I’m certain consumers have as well.” She noted the lack of a dedicated budget for completion of the project, stating she had “a budget proviso in the works to fund that,” predicting “about a $200,000 budget item” (audio - 1m, video).
    • At the Washington State Cannabis Summit on September 24th, Kloba mentioned potential dedicated funding to finish the project.

• Clodfelter went over the OCal Program, a recent California organic comparable certification for cannabis produced in the state (audio - 6m, video).
  • The OCal program was enacted with a “July 2021 rulemaking deadline for the creation of two different programs,” Clodfelter remarked, one “for cannabis and non-manufactured cannabis producers that’s under the jurisdiction of the state Department of Food and Agriculture” (CDFA), and a second for “manufactured cannabis products” within the California Department of Public Health (CDPH). His presentation centered on the CDFA program, “because that’s the only one where final rules have been adopted and the program is live.”
  • Clodfelter commented that the CDFA program pertained to “cannabis flower, pre-rolled cannabis, and certain other limited cannabis products that don’t have any other ingredients in them besides cannabis.” He indicated that Califorina law included a “contingent nullification” so that if “federal law changes, cannabis becomes eligible for a[n] organic certification and designation.” 
    • OCal Program final rules were adopted July 14th, “creating the ‘OCal’ program for cannabis and non-manufactured cannabis products.”
      • OCal Program - Final Regulation Text 
      • OCal Program - Final Guidance Documents 
      • Food and Drug Administration regulation 21 CFR section 179.26 (Apr 1, 2020) incorporated by reference
    • Voluntary Certification. “Cultivators and distributors may apply to certifying agents to have their operation (or portion of their operation) inspected, evaluated, and certified as OCal compliant.”
    • Labeling Terminology. “‘OCal’ is labeling term to identify cannabis and non-manufactured cannabis products produced according to OCal rules, which are designed to be comparable to National Organic Program rules.”
      • Clodfelter indicated the OCal seal could be used on “product packaging and labels and marketing” while the term OCal could be used in “individual product names.”
  • The system allowed “third-party certifying agents to play a role,” Clodfelter said, either “private entities or local governments” that registered under the program and were accredited by either the CDFA or the national organic program. Participating cannabis businesses had to have “a comprehensive system plan that is agreed to with the certifying agent” covering all “aspects of how their business is conducted,” including “where the cannabis inputs” and materials used came from. He added that this plan needed to be updated annually. The program allowed for yearly “site inspections” including “unannounced” inspections as well as “recordkeeping requirements.”
  • The program featured “provisions on testing and sampling” plants, soil, and water, Clodfelter said, occurring “at the expense of the certifying agent or” CDFA. He went on to describe prohibited substances and methods under the OCal program:
    • “Synthetic substances and ingredients except as provided in the National List of Allowed and Prohibited Substances,” which was part of the national organic program.
    • “Non-synthetic substances and ingredients prohibited in The National List of Allowed and Prohibited Substances 
    • Substances prohibited by the Department of Cannabis Control for use on cannabis 
    • Excluded methods involving genetic modifications 
    • Ionizing radiation 
    • Sewage sludge”
    • None of the substances “could be applied to the land in the three years immediately preceding harvest of cannabis,” he noted.
  • Fees for OCal had to be “reasonable and filed in advance” with CDFA, remarked Clodfelter. He indicated there were also mechanisms like compliance notices, suspension, or revocation of certification in addition to fines. Violations included labeling products as “organic,” and fines could be levied “up to $20,000 for other intentional violations,” but most amounts were based on “the severity of the violation.”
  • Clodfelter reported that CDFA staff were accepting “applications from prospective certifying agents” who would be able to “start accepting applications from the individual cannabis businesses who seek certification” of their products and facilities.

• Clodfelter described how cannabis “appellations of origin,” similar to federal appellation laws for viticultural areas in winemaking, had been enacted in California “to promote regional products and local businesses, prevent misrepresentation of a product, and support consumer confidence about a product’s origin and characteristics” (audio - 6m, video).
  • Clodfelter explained that the California Appellations Program (CAP) set up the state as the first legal cannabis jurisdiction to enable the definition of appellations of origin, and committee members might be “familiar with this concept from the wine industry.” The proposition legalizing cannabis in California which voters approved in 2016 had required labeling of products to indicate “a county, city, or city and county origin,” he said, before a 2019 law created the CAP with “specific standards, practices, and cultivars applicable to cannabis produced in a certain geographical area.” Clodfelter added that there were penalties for businesses misrepresenting their product in either locality or appellation labeling. He clarified that state regulators had only produced “draft rules” and had “gone through...four different revisions.” Clodfelter reported that final CAP rules were scheduled to be adopted by January 1st, 2022.
    • Take a look at CAP documents from the fourth additional comment period:
      • Modified Text of the Proposed Regulations
      • Notice of Modifications to the Text of the Proposed Regulations
      • Addendum to the Initial Statement of Reasons
    • The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) within the U.S. Department of the Treasury maintained a list of established American Viticultural Areas (AVA), including AVAs in Washington state.
  • For a CAP applicant to be approved, they had to “include the practice of planting in the ground in the canopy area,” Clodfelter stated. He made clear this excluded cannabis grown using “greenhouses and artificial light in the canopy area,” indoor product facilities, “as well as, potentially, hydroponic operations.”
  • Clodfelter described how “three or more unique cultivators within an area of a proposed appellation of origin can petition” to “establish or amend an appellation of origin.” He told the committee there were petition submission fees and petition proposal fees based on whether a petition was establishing or amending an appellation. Petitions could cover “a specific strain” being cultivated or a requirement for OCal certification, Clodfelter said, as there was “flexibility in what requirements could be associated” with an appellation determined by the petitioning businesses.
  • According to Clodfelter, CAP petitions also had to have “evidence of a legacy, history, and reputation, and economic importance of cannabis production in the area.” Overlap among appellations was possible but would entail “an explanation of differences,” he stated. CDFA staff would “issue a proposed notice of action” for completed applications, and list approved appellations of origin on their website along with associated mapping and appellation requirements, Clodfelter added.
    • Find out more from the Origins Council, a California nonprofit organization “dedicated to sustainable rural economic development within cannabis producing regions, and establishing nationally and internationally recognized, legally defensible, standards-based, geographic indication systems for cannabis.” The group had been a sponsor of the Mendocino Appellation Project (MAP), a 2016 cannabis appellation of origin effort in the region, along with the Mendocino Cannabis Alliance.
  • Representative Eric Robertson inquired as to states “behind” California in setting up organic comparable programs that could still be a “resource” for Washington regulators. Clodfelter replied that he hadn’t encountered other states setting up similar programs. Kloba remarked this was part of an endeavor by legislators to “order some tools that we can use to make sure that our industry...is ready to go if and when there is a change in the federal law against cannabis” (audio - 1m, video).

Here are some observations from the Thursday October 21st Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• Washington State Department of Health (DOH) Office of Health Professions Director Martin Pittioni provided a briefing on the agency’s medical cannabis program, which he broke into “three components”: patient registration, cannabis consultants, and compliant products.
  • On June 30th, the Washington State Legislative Task Force on Social Equity in Cannabis Licensing Work Group heard a briefing from DOH Medical Marijuana Program Manager Allyson Clayborn about department responsibilities for patients, caregivers, and medical practitioners.
  • Pittioni told the committee that of the three aspects of the program, the “voluntary confidential medical marijuana authorization database” was the “core” (audio - 4m, video, presentation).
    • He noted the system was “not voluntary for minors, and in essence, that registry and database allows us to create a process for producing recognition cards for qualified patients and designated providers.” A patient receiving a medical cannabis authorization “from their doctor can schedule an appointment with a certified consultant and be entered into the database and receive a recognition card,” said Pittioni
    • While under the authority of the Office of Health Professions, Pittioni cautioned that consultants were “not technically considered health providers, they can only work as a consultant in a medically endorsed retail store” which was required to have a consultant on staff. Consultants were empowered to “enter patient and designated provider information from the authorization form into the database” and produce recognition cards, he said, as well as “help the patient with selecting products that may help with their qualifying condition, describe risks and benefits of methods for using products,” and offer advice on product storage, usage, and what was allowed under current law. “What they’re not allowed to do,” he commented, was provide “medical advice, they’re not allowed to diagnose any conditions or recommend any changes in treatment,” nor were they “allowed to open and use actual products while demonstrating how to use” them.
    • Medically compliant cannabis products had “testing requirements...in addition to the floor set by” the Washington State Liquor and Cannabis Board (WSLCB), whose staff Pittioni said had collaborated well with his office, most recently on “clarifying product packaging.”
      • On September 14th, WSLCB staff published a policy statement on Structure or Function Claims Concerning Marijuana [Cannabis] Infused Products followed by a second policy statement dealing with False or Misleading Statements Concerning Marijuana [Cannabis] Infused Products on September 30th.
    • He described the “enhanced standards” for compliant items:
      • Testing for “prohibited pesticide and heavy metals, and mycotoxins as those may be harmful” for patients with compromised immune systems
      • Additional labeling requirements
      • Larger “serving size options”
      • Specialty logos “intended to help the consumer more easily identify what product actually meets the compliance standard.”
  • Delving into patient recognition cards, Pittioni said there were “two sub-buckets here” of “folks that actually are medical marijuana patients” including “a part of the community that we don’t touch at all that simply are benefiting from marijuana legalization.”
    • Adult patients can “get an authorization from their health care provider and then be done,” electing not to register in the database. This allowed for “more limited benefits” like the right to cultivate a smaller number of cannabis plants and hold more than the adult possession limits.
    • Patients registering their authorization gained “significant additional benefits”:
      • “​​May purchase 3 times the recreational limits
      • May possess 6-15 plants if authorized
      • May purchase high-THC products, when available
      • Purchases at endorsed stores are not subject to sales tax
      • Arrest protection
      • May participate in a cooperative
      • May purchase immature plants, clones and seeds from a licensed producer”
  • SB 5052---passed in 2015---merged medical cannabis production and distribution into the adult use market and required the state to use a third-party entity “to create and administer a secure and confidential data system that is not hosted by DOH to safeguard contents from either required or unintentional disclosure” (audio - 4m, video).
    • Security for the patient registry was important, Pittioni commented, since the database included “names and other personally identifiable information” of participating patients. He told lawmakers this information was “exempt from public disclosure requests, inspection, or copying.” Moreover, Pittioni stated that personal information of patients in the database “must not be susceptible to linkage by use of data external to the database.” The registry was first created following outreach efforts to stakeholders, “persons with the relevant expertise,” patients, doctors, and others, he added, and the law included “strict provisions” for data not to “be shared with the federal government or its agents unless a particular qualifying patient or designated provider is convicted in state court for violating” RCW ​​Chapter 69.50 or Chapter 69.51A.
    • Pittioni said the selected database vendor (cloudPWR at the time of publication) was also “required to perform what are called [Service Organization Control] SOC 2 security audits twice a year” in order to identify “weak points that may be at risk for hacking.” He indicated that “to date, since the inception of the program, we have no known hacks or breaches of the data.”
    • On November 5th, shortly after Pittioni’s presentation, DOH staff published a request for information (RFI) “seeking procurement planning directed by state and agency policies and standards, to reprocure for a Medical Marijuana Data Registry.” The RFI asked that prospective vendors respond to a questionnaire by January 7th to help department staff plan for acquiring a system to support:
      • Healthcare practitioner portal for Authorization management.
      • Retail Store portal for Recognition Card management and running reports.
      • Patient portal that allows the patient to download an electronic recognition card that can be stored and accessed from a mobile device.
      • Recognition card verification for law enforcement officers.
      • Card expiration and renewal tracking and management.
      • Admin portal that allows DOH to manage retail stores and users, communicate to users, audit user activity, run reports, and make configuration changes.
  • Turning to active rulemaking, Pittioni expected committee members were “already aware” that “we suspended the in-person demonstration for” cannabis consultants to obtain a cardiopulmonary resuscitation (CPR) card due to the coronavirus pandemic. DOH officials were also looking at rulemaking for “expanding and updating the initial training program learning requirements, updating who can teach the initial training courses to support a more diverse pool of candidates, and adjusting the annual” continuing education requirements to allow for “more creative, self-study options,” he said. Pittioni conveyed that the goal of any rule changes would be to ensure “that our consultants are up to date with industry standards, and get accurate information about rules and policies, and connect them to us as a resource” (audio - 1m, video).
  • Chair Shelley Kloba brought up the distinction between authorized and registered patients, noting those patients that registered for a recognition card received “a set of privileges...that are not available to” authorized patients. “One in particular is arrest protection, versus an affirmative defense,” she stated, finding this made “two classes of patients” with authorized patients “a second class” despite no difference in medical need. She asked Pittioni for “the rationale behind the start of this program and the continuation of this program given that” it created tiers for care. Pittioni demurred, suggesting the answer was “back in the legislative intent from 2015” and that he hadn’t been involved in the program at that time. He promised to “work with my staff to come back with what it is we can unearth” about the history of the bill (audio - 3m, video).
    • HB 1105, prime sponsored by Kloba in 2021, proposed expanding arrest protections to all authorized patients and was passed by the Washington State House of Representatives (WA House) on March 1st. The bill was heard by the Washington State Senate Labor, Commerce, and Tribal Affairs Committee on March 16th and recommended in executive session on March 18th. The bill would remain active during the 2022 legislative session.
    • Find out more about the passage of SB 5052 from histories of medical cannabis implementation in Washington state by DOH and WSLCB staff, as well as the legislature. Sarah Mariani, Substance Use Disorder Prevention and Mental Health Promotion Section Manager in the Department of Behavioral Health and Recovery (DBHR) at the Washington State Health Care Authority (WA HCA), produced Lessons Learned from Marijuana Legalization in Washington State covering medical implementation in addition to other topics at the 2017 Prevention Summit.

• Pittioni discussed the DOH response to a Washington State Joint Legislative Audit and Review Committee (JLARC) review of tax preferences on compliant products (audio - 4m, video).
  • Explaining that “in 2021 JLARC conducted a study to help assess if the tax preferences for cannabis patients should be contiue[d],” Pittioni said the study had “a bit of a side effect” of bringing to light “that there was some ambiguity around what product actually qualified for tax exemptions, and in essence, the core issue there was, is that tax exemption there for just DOH compliant product, or does it apply to any cannabis product that is purchased by a card-holding patient.”
    • The review included exemptions in RCW 82.08.9998, RCW 82.12.9998 and RCW 82.04.756.
  • Pittioni said allowing the exemption for all items was “our longstanding interpretation.” His office had reached out to Washington State Department of Revenue officials and planned “in the next few days...to come out with a policy, an interpretive statement, that will essentially...clarify for the community” that this interpretation “would continue to hold.” He confirmed this meant “any cannabis product would remain eligible for that tax exemption.”
    • The day after the committee meeting, DOH staff published a policy statement on “compliant medical products.”
    • Learn more from the Tax Preference Preliminary Report by the Washington State Citizen Commission for Performance Measurement of Tax Preferences, as well as the Chair’s Draft Combined Comment form with the group’s October 2021 recommendation to maintain medical cannabis tax preferences.

• Pittioni covered medical cannabis patient trends, with new statistics showing authorized patients were on average “slightly older” and the number of recognition cards issued or renewed had been declining (audio - 5m, video). 
  • In 2019, the average patient age was 50, but Pittioni showed that it had since increased to 52, with the most common authorized condition being “intractable pain.” The average age of patients who were minors “continues to be 12,” he indicated, with the most commonly authorized condition being epilepsy. 
  • Additional statistics in the presentation:
    • “​​91,730* Total cards created
    • 4,314* Avg. cards created quarterly
    • 14,293 Active patients
    • 157 Actively endorsed stores
    • 607 Active consultants
      • *Total cards created are not representative of total ACTIVE cardholding patients. The numbers listed represent initial cards and cards that were replaced, renewed, corrected or revoked.”
  • Pittioni mentioned a trend line for patient registration cards from July 2016 through June 2021, stating the provided numbers accounted for “each initial renewal and replacement card created for both patient and designated providers.” The numbers showed a “downward trend...of the number of cards getting issued,” he noted. Although Pittioni didn’t have statistics for the second half of 2021, as “projected out...we would see kind of a plateauing of the decline” of registry participation. Pittioni warned it was “too early for us to say that we will see that,” and it was possible the number of patients voluntarily registering would continue to decline.
  • Trying to minimize speculation, Pittioni said “we don’t really know a lot about what may be behind some of that continued decline, there’s a lot of talk around COVID impacts” such as limited access to medical professionals or “hesitancy to go into a store which includes removing a mask.” There was a lack of clear data on the motives of patients, he stated, but assured the committee his office would continue to work on registry management, and participate in the Cannabis Science Task Force (CSTF).