WSLCB - Executive Management Team
(December 8, 2021)

Here are some observations from the Wednesday December 8th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 3 takeaways:

• The transition to the Cannabis Central Reporting System (CCRS) from traceability vendor MJ Freeway/Akerna began on December 6th, just over three months after the plan was announced to all stakeholders.
  • Problems with Leaf Data Systems, the Washington state seed-to-sale cannabis traceability system hosted by MJ Freeway, had been a near constant concern from its launch in early 2018 through its planned decommission on December 18th. During the transition from the previous vendor, BioTrack, WSLCB leaders formed a Traceability Advisory Committee focused on making the new system workable for regulators, licensees, and integrators which met until August 2019.
  • Then, the Traceability 2.0 work group was organized to help officials evaluate and draft a new approach to ensuring compliance and public safety. That group last met on March 2nd to go over WSLCB staff conclusions. Prior to leaving the agency, Chief Information Officer (CIO) Mary Mueller secured board approval on a road map towards ending the contractual relationship with MJ Freeway by June 2022. She departed weeks later, and was succeeded as CIO by George Williams, previously the Senior Information Technology (IT) Manager.
  • The next public mention of the road map occurred on August 11th when Chief Financial Officer (CFO) Jim Morgan, executive sponsor of the CCRS project, briefed agency leadership on a communications plan that staff would follow to help transition the cannabis sector to the CCRS reporting-only traceability regime. The plan included an initial notification to all stakeholders on August 27th.
  • Data reporting would largely be conducted via comma-separated value (CSV) files using a set of defined formats. A separate required transportation manifest form was situated behind a CAPTCHA specifically intended to preclude automated submissions. The communications plan aimed for a launch date “in December” and included the creation of a range of supporting resources:
    • A CCRS FAQ and CCRS resources website, along with accompanying documents:
      • CCRS Preparation Guide
      • Getting Started with CCRS
      • Secure Access Washington (SAW) User Guide
      • CCRS Quick Start Guide
      • CCRS User Guide
    • Webinars on the system on September 8th, September 20th, October 4th, and October 29th
    • And additional broadcast communications, including:
      • Guidance regarding the “Leaf Decommission and CCRS Expectations”
      • A policy statement on “Security and Traceability Requirements for Marijuana [Cannabis] Licensees” which clarified several reporting standards for CCRS:
        • “‘Up-to-date’ means a weekly report of the required information if there have been updates, changes or actions to any of the information described in WAC 314- 55-083(4)(a) through (p).”
          • On December 9th, the CCRS FAQ was updated to note a “Week is defined as Sunday - Saturday.  After the transition period,  all licensee weekly reporting will be expected by no later than Sunday for the previous week.  Reporting more frequently [than] weekly is allowed.”
        • The “system will not be generating unique identifiers; these will have to be generated by licensees...all marijuana, usable marijuana, marijuana infused products, marijuana concentrates, seeds, plant tissue, clone lots, and marijuana waste must be physically tagged with the unique identifier reported to the traceability system.”
          • On December 8th, board members heard from a licensee who expressed concerns about meeting “our public safety obligations without” rational “identification of a universal ID implementation.”
        • “All other traceability reporting requirements such as manifests, lab results, and co-ops remain the same consistent with existing rule.”
    • “Clarification” regarding a “Known CCRS Bug” whose fix would “be drafted and presented to the Steering Committee for discussion and decision for inclusion in a future release.”
    • WSLCB leaders heard feedback from stakeholders at board meetings on September 1st, September 15th, and December 8th; and during events with agency leadership on September 23rd and 27th.
  • By October 13th, a “one week pilot” had concluded with six integrators, three licensees, and two accredited cannabis laboratories. During an update to agency leadership, Morgan said identified problems had “all been resolved.”CCRS testing was subsequently “opened up” to all “licensees, integrators, and labs,” he indicated, but there were “no outstanding issues that we’re aware of.”
    • The Washington Cannabis Integrators Alliance (WCIA) announced its formation the same day.
  • On November 10th, Morgan reported a “month-long industry testing period” had concluded on November 4th, which led to identification of "a number of issues that have all been addressed." Director of Communications Brian Smith added that staff had been working “with subject matter experts on the team to make sure that we’re getting out the right kind of communications” while managing the ccrs@lcb.wa.gov email account and handling “general questions.”
  • On November 15th, Cannabis Observer Founder Gregory Foster emailed “WCIA concerns for CCRS transition decision” to WSLCB leadership, raising integrator and licensee concerns “that this holiday season may be severely disrupted not only for business but also for agency staff.”
    • Morgan followed up on November 17th, responding to the issues raised and concluding it was “beneficial for LCB staff to review stakeholder concerns in advance so that we can ensure we are as prepared as possible.” He added, “We likely will not know until Dec. 6 the degree to which all licensees are prepared. However, please know that we have actively engaged with industry trade associations, individual licensees and stakeholders. In general, the upsides of this transition are known and, for the most part, a positive change.” The internal WSLCB CCRS Steering Committee made the decision to move ahead on November 16th.
  • CCRS went live on December 6th and previous communications indicated “Leaf will be shut off and no longer available to licensees after 8 a.m. on Dec. 18.”

• Chief Financial Officer (CFO) Jim Morgan, along with Licensing and Communications division leadership, talked about the status---and criticism---of the CCRS launch.
  • Morgan said “the team worked through the weekend resolving a couple of late-breaking issues and successfully launched on Monday as scheduled” (audio - 6m, video).
    • Although the system “is performing as designed...it’s not time for a victory lap,” he said, acknowledging that a more meaningful measure of success could be taken once “the industry is fully engaged, and fully involved, and successfully using the system.” Morgan stated that the information technology (IT) division had “brought in a number of extra resources” to troubleshoot for licensees and integrators, with most issues revolving “around gaining access to” CCRS.
    • Morgan hadn’t seen any “show stoppers...putting the brakes on the entire industry,” and that “as expected, the manifest issue, going from completely automated to a more manual system is one of the issues that we’re hearing about.” He summarized feedback across a spectrum from “congratulations LCB...on a flawless execution” to “things I can’t repeat here.” Some responses had been "tinged with anxiety and anger, possibly," remarked Morgan, but staff were still reviewing them for “the real issues” where “we need to address things in the system.”
    • “As of this morning,” 612 licensees had logged into CCRS, said Morgan, or “about a third,” many of whom were authorizing their software providers. He commented that “a couple of the larger integrators...are still making preparations, they haven’t really hit the system hard,” but “we’re expecting that soon.” Use had been increasing, but “servers and the infrastructure are handling the volume,” Morgan noted. Staff had told him that some complaints had come in pertaining to error messages when files were uploaded, but that “in quite a number of cases folks are getting their error messages, they’re resolving their issues, and then turning around and successfully uploading their files without contacting our help desk.” In all, Morgan believed the CCRS was “effectively working as designed.”
    • Throughout implementation and testing, WSLCB officials had been “gathering input on things...that we may want to change," he said, which would constitute “changes to the system” rather than indications that “the system is not working the way it was intended.” Manifests for transfer of cannabis products was one of the “hot topics” they aimed to solve “as soon as the dust settles from the initial go live,” Morgan told the group, including increasing efficiency around uploads.
    • Morgan felt problems encountered during the transition were to be expected of “any change, no matter how smooth it is,” and staff were trying to “minimize that disruption.”
  • During her update, Director of Licensing Becky Smith mentioned that “we certainly couldn’t have expected the number of phone calls that we’re getting from CCRS, but certainly we’re figuring out how to...help those folks” (audio - 4m, video).
  • Director of Communications Brian Smith said collaborating with other divisions on the reporting system was “my number one priority at the moment.” His office was “trying to be responsive” and meeting “twice a day, an incident command meeting, to assess where we’re at.” Smith said they focused on assisting licensees to “get into the system or figure out what it is they need to do” (audio - 5m, video).

• Board Chair David Postman had some questions about the launch and agency staff engagement with those impacted by the transition to the new system.
  • Postman praised the work of staff from across the agency at implementing CCRS, calling their efforts “a big part of why it's gone as well as it has.” He felt that they had been able to meet the timeline initially projected, but emphasized “there is no victory dance here.” Postman appreciated the ability of staff to “filter out some of the attitude,” adding, “I’m not always as well adjusted as you, Jim” (audio - 1m, video).
  • Postman inquired about a request from Foster for increased and “ongoing interaction with stakeholders on this,” wanting to know if there was an entity within the agency preparing for that or if “there[‘s] something we can do there to formalize that communication loop.” While not having “specific plans,” Morgan agreed stakeholder involvement was “really important” and said he’d ensure “they have a chance to engage with us” (audio - 1m, video). 
  • Next, Postman asked if larger integrator companies---“the high end user”---were offering feedback since the launch. Morgan responded that there’d been “some specific issues that we would call bugs" that they were addressing, and the response from integrators “that are engaged has been useful and we have been acting on some of it” (audio - 1m, video). 
  • Morgan provided some further thoughts on the public criticisms heard at that day’s board meeting, stating that “oftentimes the feedback” or requests for solutions were “accompanied with ‘this would be a simple fix, why haven’t you done it already?’" As the go live date neared, “some of those kinds of things would have disrupted the schedule,” leading him to tell those offering advice that, “while something may look simple,” security and “systems issues” meant some suggestions “may, or may not, be a simple fix.” Postman was grateful for Morgan and others’ efforts during the transition, including the “incredible hours” expended, but warned “it’s not over for you yet” (audio - 2m, video).