WA Senate LCTA - Committee Meeting
(November 15, 2021)

Here are some observations from the Monday November 15th Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA) Committee Meeting.

My top 3 takeaways:

• Cannabis Regulators Association (CANNRA) Executive Director Gillian Schauer led a presentation similar to the one she provided to a Washington State House of Representatives (WA House) committee on October 21st, but senators had several new questions for her.
  • Schauer reiterated points about delta-8-tetrahydrocannabinol (delta-8-THC), a cannabinoid isomer she said was “psychotropic, that means it can be impairing." She told senators products with delta-8-THC were available in “grocery stores” despite significant concerns about the impact on public health (audio - 6m, video, presentation).
    • Schauer spoke to some poison center reports about delta-8-THC (audio - 1m, video) and a U.S. Centers for Disease Control and Prevention (CDC) health advisory issued September 14th (audio - 1m, video).
    • Schauer concluded her presentation by talking about her anecdotal experience with online sales for delta-8-THC products, potential health risks in the absence of testing and labeling requirements, and other novel cannabinoids that could be created by chemically converting cannabidiol (CBD) extracted from hemp. She indicated that regulators in states like Michigan and Oregon chose to regulate delta-8-THC and/or novel cannabinoid products as part of their legal cannabis markets (audio - 7m, video).
      • At the Public Health + Youth Prevention Marijuana Summit on September 28th, Schauer moderated a panel on “Delta-8 THC and Other THC Isomers” featuring CANNRA leadership and Washington State Liquor and Cannabis Board (WSLCB) Policy and Rules Manager Kathy Hoffman.
      • At publication time, CANNRA leadership included Michigan Marijuana Regulatory Agency (MI MRA) Executive Director Andrew Brisbo and Oregon Liquor and Cannabis Commission (OLCC) Executive Director Steve Marks, both of whom sat for the summit panel moderated by Schauer. WSLCB Director Rick Garza was the CANNRA First Vice President.
  • Chair Karen Keiser asked whether “hemp-derived” products had an excise tax added when sold. Schauer said the items did not, having a “very different tax approach” (audio - <1m, video).
  • Senator Mark Schoesler wondered if delta-8-THC products were age restricted to adults “21 and over.” Schauer said that depended on the state, but in her experience jurisdictions “may have some age in effect, it’s typically 18 and older, and it’s typically not widely enforced.” Keiser noted the committee would “bring that question forward for LCB” staff presenting later (audio - 1m, video).
  • Keiser questioned Schauer about the CDC health advisory indicating 39% of poison center reports were pediatric cases, wondering if this was “a child getting their parent’s product.” Schauer said the definition of ‘pediatric’ varied, but could be “small children who accidentally ingest it” as well as “teenagers who buy it on their own and ingest it and have an adverse reaction that is scary to them” (audio - 1m, video).
    • The CDC advisory stated “pediatric patients less than 18 years of age.”
  • Keiser expressed gratitude to Schauer for a “very alarming, but informing” briefing (audio - <1m, video).

• Justin Nordhorn, WSLCB Director of Policy and External Relations, and Kathy Hoffman, the agency Policy and Rules Manager, provided more insight on delta-8-THC products and fielded more lawmaker queries.
  • Nordhorn started off by confirming “delta-8 as well as other delta products...are out on the market” and many weren’t tested before being sold since there were “no regulatory mandates.” Products were “predominantly chemically converted from hemp-derived CBD,” he added, and the items were broadly available online in addition to stores not licensed by WSLCB. Nordhorn asserted the cannabis industry was “fairly divided on how to handle this” and that staff were listening to all stakeholders. “But two of the common themes that we’ve really seen,” he stated, were a call to regulate “delta-8 and other impairing products” and a desire to prohibit "artificial” cannabinoid molecules like Spice or K2 that interact with the human endocannabinoid system but weren’t naturally occurring in cannabis. Speaking to Schoesler’s earlier question of age restrictions, Nordhorn commented that any novel cannabinoids in “a vape product, it would fall under our state’s vaping laws.” However, he said the agency had no “regulatory structure” around edible products so there was no age restriction unless a store’s employees “impose their own age restrictions” (audio - 3m, video).
  • Hoffman led a presentation on the “three-pronged approach" taken by agency officials to respond to “hemp-derived cannabinoids in the Washington State market,” saying it was “anchored in science, and data, and facts” (audio - 4m, video).
    • First, staff “took a look at the extent of our statutory authority to determine what our regulatory options were,” Hoffman told the committee, finding it was “currently limited to products defined as marijuana,” or those with more than 0.3% delta-9-tetrahydrocannabinol (delta-9-THC). Her office had also evaluated if terms “like ‘synthetic’, ‘artificial’, and ‘cannabinoid’ were defined anywhere in our statutes, by other states, or at the federal level.” Hoffman remarked that agency staff also considered how THC was defined under existing law and evaluated research around “health implications of both synthetic cannabinoids and hemp-derived THC compounds other than delta-9-THC.”
    • The “second prong of our approach” pertained to setting policy that would “inform and frame the contours of rule development and request legislation,” said Hoffman. She talked about how stakeholder engagement inclusive of “our regulatory partners from across the country” in addition to representatives of other state agencies resulted in a policy statement which “provided that any products sold from an [Initiative-]502 store came from the I-502 system, and had been tested...and met all of the other I-502 safety standard.” The statement assisted in formulating policy and rule development around “how the board might evaluate THC compounds to determine whether they pose a threat to public health or youth access,'' stated Hoffman. She emphasized that existing statute allowed WSLCB leaders to “prohibit the use of an additive, solvent, ingredient, or compound used in the production or processing of a marijuana product sold in our stores,” but no authority to prohibit them “anywhere else.” 
    • Hoffman noted WSLCB staff had hosted two deliberative dialogues with subject matter experts on cannabis plant chemistry on June 3rd and July 20th, saying the experts affirmed “this is a very complex topic and developing our knowledge base will take time.” She indicated that creation of agency request legislation was underway and that a public hearing for the rulemaking project was scheduled for “next month.”
      • A second bill draft was released on November 1st along with a summary of its provisions and a one pager.
  • Keiser wanted to know if the rulemaking project dealt with taxation or age restrictions for sales of unregulated novel cannabinoid products. Hoffman responded that the project “gives the board the ability to evaluate THC compounds that may find their way into our regulated system. We don’t have the authority to go beyond that at this point” (audio - 1m, video). 
  • Vice Chair Steve Conway wondered about “any effort to control youth...access to edibles.” Hoffman believed that was “addressed to the extent possible in our current rule structure” but delta-8-THC infused edibles were made and sold outside of their authorized system. Conway was hearing the message that “we also need to broaden the authority of the agency to regulate" those items (audio - 1m, video).
  • Nordhorn outlined the key concerns, regulatory gaps, and goals of eventual policy and legislation (audio - 7m, video):
    • Key issues
      • “Address concerns of stakeholders related to impairing cannabinoids that are not clearly covered in [the Revised Code of Washington]”
      • “Improve public health and safety through regulating all impairing cannabinoids, current and future”
        • Nordhorn stressed to the committee that “we’re not interested, necessarily, in regulating a cannabinoid that is not impairing, but the issues of any impairing cannabinoid, we’re trying to...wrap our arms around that issue.”
      • “Establish definitions for common terms to mitigate the risk of misinterpretation and increase consistency in understanding and application of law”
      • “Provide opportunities to use non-impairing cannabinoids beyond CBD as additives to ‘marijuana’”
        • Nordhorn acknowledged there had been “controversy amongst the stakeholders” about permitting synthetic compounds in the legal market, ostensibly restricted to synthesized molecules that were “natural in the plant...they’re already there.” He nonetheless believed that inclusion would allow for regulating “cannabinoids in a productive manner that doesn’t create a youth access issue or a public health and safety issue.”
        • HB 2334, signed into law in March 2018, allowed CBD imported from outside the 502 market to be used as a cannabis product additive. The bill was codified as RCW 69.50.326 and implemented by the WSLCB board in October of 2018. This statute would later be cited in 2021 by a licensed processor defending the production of synthesized cannabinoids within the legal market prior to a WSLCB stopgap measure to prohibit the practice.
      • “Mitigate youth access risks”
      • “Improve ability to respond to emerging issues relating to impairing cannabinoids”
    • Regulatory Gaps (in relation to novel cannabinoid products)
      • “False or misleading statements”
        • On September 30th, WSLCB staff published a policy statement on False or Misleading Statements Concerning Marijuana [Cannabis] Infused Products.
      • “Structure or function claims”
        • On September 14th, WSLCB staff published a policy statement on Structure or Function Claims Concerning Marijuana [Cannabis] Infused Products.
      • “Mimicking packaging of well known candy, snack products,”
        • Nordhorn mentioned, “we haven’t seen it directly in our state as predominantly as other states.”
      • “Packaging and advertising may be especially appealing to persons under 21”
        • Find out more from existing WSLCB cannabis packaging and labeling resources.
      • “THC concentration definition in statute recognizes only Delta-9 THC”
        • Nordorn noted there were no established serving sizes for unregulated products.
      • “[The 2018] Federal Farm bill did not envision hemp as impairing consumer product”
        • Nordhorn remarked that this sentiment had been expressed by “congressional members.”
    • Policy/Legislative Goals
      • “Address concerns about impairing cannabinoids that are not clearly covered in RCW
      • Improve public health and safety through regulating all impairing cannabinoids, current and future
      • Mitigate risk of youth access
      • Improve ability to respond to emerging issues relating to impairing cannabinoids
      • Allow science to inform policy
      • Limit sales of impairing cannabinoid products to only licensed cannabis businesses” 
        • Nordhorn suggested the intent of agency leadership was for businesses processing or selling delta-8-THC and novel cannabinoid products to be licensed by WSLCB.
      • “Establish definitions for common terms to mitigate the risk of misinterpretation and increase consistency in understanding and application of law”
    • Nordhorn explained that request legislation from the agency may “tackle this a little bit differently than a couple other states. We believe that...there’s room to be able to identify what is synthetic, and what is artificial, and how should those be regulated, or prohibited, in different manners.” He commented that the request legislation would seek to:
      • “Prohibit artificial cannabinoids
      • “Expand disclosure to consumers, testing requirements for additives”
      • Provide opportunities to use non-impairing cannabinoids beyond CBD as additives to ‘marijuana’”
        • Nordhorn called out that “there’s certainly a demand for these products right now” and without “an avenue for them to be sold, we’ll have that gray or illicit market activity continuing."
      • “Bring all impairing cannabinoids into the regulated market framework”
      • “Strong focus on consumer safety”
  • Keiser inquired about artificial versus synthetic cannabinoids. Nordhorn said, “our understanding of artificial is you’re going to create, chemically, in a lab, and it only comes from chemicals,” a compound “without any natural base.” Synthetic compounds were “something that you’re going to take out of the plant, such as CBD, and then you’re going to put it through a chemical process,” he stated, for conversion “from the CBD into a delta-8.” Nordhorn shared the view of agency officials that these were “two slightly different methodologies for production” (audio - 1m, video). 
  • Ranking Member Curtis King spoke up to say that after hearing Schauer’s remarks on youth access and Nordhorn’s depiction of risks for the “first time user,” he believed “there’s kind of an emergency here.” He doubted “we got a lot of time” as “the fact that you can get online” and purchase delta-8-THC items with “a credit card or something” was “concerning.” King’s memory of SB 5276, the 2019 law legalizing hemp production, was that it was “agriculture” and had “no relationship to marijuana...it’s a separate product. Well, now it’s a separate product but guess what? We’re tying it, somebody’s tying it, to...all of these things that can come out of it in a way that I don’t think any of us envisioned.” He wanted a resolution “in a manner that is fair, equitable, and makes sense” (audio - 2m, video). 
    • SB 5276 was signed into law in April 2019, modifying a pilot program at the Washington State Department of Agriculture (WSDA) into the contemporary hemp program. With SB 5372, signed into law in April 2021, WSDA officials moved to open rulemaking for voluntary registration of unlicensed hemp processors to support the provision of hemp extract certifications.
    • At publication time, King represented the Washington State Senate (WA Senate) minority caucus on the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF).
  • Keiser asked about coordination between WSLCB staff and their counterparts at the Washington State Department of Health (DOH), since that department had issued “public service announcements, and informational materials to consumers, parents, children, about the dangers of other products” in the past. She urged DOH staff to have “a public information campaign on these products.” Nordhorn responded that a DOH alert about delta-8-THC products had been distributed on October 14th, and a July interpretive statement by agency representatives indicated “we didn’t believe that anybody should be selling delta-8...in any marketplace within Washington state.” Keiser stressed this was about consumer messaging rather than regulatory action. Nordhorn said their message had been around “the legality of it, and DOH messaged the safety of it,” while the draft legislation envisioned more collaboration between the WSLCB, DOH, and WSDA. Hoffman added that she’d spoken regularly with Washington State Board of Health (SBOH) representatives to “see if they’re hearing anything” (audio - 3m, video).
  • King wanted to know what DOH staff thought about the safety of delta-8-THC products in relation to youth, and whether they had “authority to do something.” He urged WSLCB officials to “limit the illicit market.” If “we create a system here that everybody’s regulated...and then it forces everybody to go to an illicit market,” then King feared that would have “the greatest chance of...harm being done” (audio - 1m, video).

• Committee Chair Karen Keiser asked about the draft request legislation on cannabinoid regulation being put together by WSLCB staff (audio - 3m, video).
  • Keiser asked whether the request bill would be available “shortly.” WSLCB Director of Legislative Relations Chris Thompson reported that “this week we will finalize” a request package, including the bill draft and “budget impact,” for submission to the governor’s office and Washington State Office of Financial Management (WA OFM). Following approval, he promised to “be in touch with members” about sponsoring the request legislation. He hoped to convey the impression that “we’re close to the finish line.”
  • Thompson noted the planned bill language envisioned "a prohibition on the sale of any of these impairing cannabinoid products outside of the licensed retailers.” He added there was “close communication” with DOH and WSDA staff as WSLCB officials constructed the request bill, and he doubted the governor’s staff would need long to study the final draft before approval.
  • Keiser stated she “looked forward” to reviewing the legislation.
    • WSLCB Board Member Russ Hauge subsequently discussed the final draft of the bill during the November 16th Board Caucus. As board members were separately briefed in private on the bill, he described his feedback around conversion of CBD into other cannabinoids, noting “...it takes a while to figure out that 'oh yeah' if we open up this hose of unregulated hemp into the cannabis market we are going to obviate the need for farmers, or considerably cut back. And we will also blow up the canopy because there's no way to correspond or figure out corresponding values of battery-washed CBD and growing plants" (audio - 5m).