WSLCB - Board Meeting
(February 5, 2020)

Here are some observations from the Wednesday February 5th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• The Board adopted four revised emergency rules pertaining to vapor products which reestablished the agency’s enforcement authority in relation to the vitamin E acetate ban.
  • The previous day, WSLCB Policy and Rules Coordinator Kathy Hoffman prepared the Board to update the agency’s emergency rules around vapor products. She explained, “all of our emergency rules are connected to the flavor ban” passed by the Washington State Board of Health (SBOH) in October 2019. As SBOH’s initial emergency rules were set to expire at the end of the week, Hoffman proposed that the Board adopt revised emergency rules tied to SBOH’s subsequent vitamin E acetate ban which would expire March 19th and was expected to be renewed. Hoffman did not recommend revising or extending the WSLCB emergency rule on mandatory retail warning signage as she felt it was “too tied” to SBOH’s initial ban.
  • At the board meeting, Hoffman offered a thorough history of the State’s response to the vaping associated lung injury (VALI) health scare before bringing forward revised emergency rules nearly identical to those already adopted (audio - 13m, video).
    • “Today,” began Hoffman, “I ask for your authority to supersede the current LCB emergency rules and replace them in their current form but under the authority of the SBOH vitamin E acetate ban as described in chapter 246-80 WAC to the extent that the SBOH retains any part of that rule structure and more specifically within the authority described in WAC 246-80-021 banning the sale of vapor products containing vitamin E acetate.” Hoffman added that immediate adoption of the new rules was “necessary for the preservation of public health, safety, and general welfare.”
    • Board Member Russ Hauge wanted to know if “the emergency rules will focus solely on the vitamin E acetate, not on other flavoring compounds.” Hoffman confirmed his understanding was correct.
    • “Summary license suspension” and “petition for stay” procedures against vapor licensees (WAC 314-35).
      • Previous Emergency Rule (Oct 23, 2019)
      • New Emergency Rule (Feb 5, 2020)
    • Enforcement authority against cannabis processors (WAC 314-55-077)
      • Previous Emergency Rule (Oct 23, 2019)
      • New Emergency Rule (Feb 5, 2020)
    • Enforcement authority against cannabis retailers (WAC 314-55-079)
      • Previous Emergency Rule (Oct 23, 2019)
      • New Emergency Rule (Feb 5, 2020)
    • Mandatory disclosure of cannabis vapor product ingredients (WAC 314-55-1055)
      • Previous Emergency Rule (Oct 16, 2019)
      • New Emergency Rule (Feb 5, 2020)
  • In conclusion, Hoffman called attention to the agency’s “outstanding” rule on mandatory retail warning signage which had been approved on October 16th. Noting that the rule would expire “on or about February 14th,” she said WSLCB was “confident that the messaging related to the health risks of vapor products had been appropriately and broadly shared and updated since the outbreak began and the need for this emergency rule no longer exists.”
• During general public comment, Crystal Oliver provided perspective on the mandatory disclosure of cannabis vapor product ingredients recently required by the WSLCB.
  • Oliver, Executive Director of the Washington SunGrowers Industry Association (WSIA) and co-owner of Spokane-area producer Washington’s Finest Cannabis, visited to talk about the “vapor disclosure forms.” She was aware there were “penalties” for companies not disclosing product ingredients and wanted clarification on whether the agency was “extending the due date on those.” While her company received the forms last fall, Oliver said that an “early winter” had “distracted a lot of farmers from the emails they were receiving from you all” (audio - 2m, video).
    • When first discussed by Hoffman and the Board on October 15th of last year, the emergency rule for ingredient disclosure forms had no due date nor reporting requirement. Instead, it would have been the responsibility of a processor to complete, store, and make available product information “upon request” by WSLCB staff. Hauge referred to the initial concept as a not “fully baked idea” and suspected processors would deem anything they didn’t have to submit as a “low priority.” He asked that Hoffman “rethink” the draft as he wanted to avoid passing any rules which “we have no intention of enforcing.”
    • The initial emergency rule, adopted the following day, was altered to include submission of the forms to WSLCB “either in electronic form or through mail” until an online form was available.
    • On November 8th, the same day the U.S. Centers for Disease Control and Prevention (CDC) announced findings associating vitamin E acetate with lung injuries, the Department of Health (DOH) and WSLCB issued a joint announcement to licensees more strongly encouraging “Cesession[sic] of Sales of Vapor Products With Vitamin E Acetate.”  It wasn’t until the SBOH banned vitamin E acetate on November 18th that the WSLCB declared December 1st as the due date for receipt of the disclosure forms.
    • During the December 17th Cannabis Advisory Council meeting, WSLCB Public Health Education Liaison Sara Cooley Broschart said the agency had received just over 400 forms as of December 13th but had expected a “minimum” of 11,000 documents. At that meeting, Hauge told council representatives the forms weren’t a “gotcha” effort to issue penalties, but an earnest attempt to “find out what’s out there.”
  • Oliver further advocated for seeing that “those forms are exempted from public disclosure. Those forms contain valuable formulae and proprietary business information.” She said she was aware some forms had been publicly released, but urged consideration of RCW 42.56.270 as “it really looks like those [forms] should fall under those categories and be exempted from public disclosure.”
• Lukas Hunter expressed uncertainty about whether the agency was actually backing away from a ban on flavored cannabis vapor products.
  • Hunter, Harmony Farms Director of Compliance and a former WSLCB Adjudicative Proceedings Specialist, followed up on Oliver’s comments and dug into conflicting messaging from the agency (written comment, audio - 4m, video).
  • Hunter first noted that confusion “early on” regarding WSLCB’s ingredient disclosure policy led to his “filling out around 300 disclosure forms to cover a slew of our products” as he understood that otherwise Harmony Farms’ products would be “pulled off shelves.” While that issue had been “resolved,” Harmony Farms was in the process of submitting additional forms 
  • The central issue Hunter wished to address was “concern around the messaging that went around the lifting of the flavor ban.” Citing the executive order on vaping, his impression was that “the WSLCB communication sent out to industry” ahead of the ban’s expiration caused the “cannabis industry” to become “quite excited with this notification as it alludes to a complete lift of the flavoring restriction on THC vapor [products].” While the communication gave “fair warning” of legislative activity against flavored vapor products, Hunter noted that “there was never anything that said, distinctly, that there would be [a ban] for THC vapor.”
  • In his view, WSLCB’s Winter 2020 Topics and Trends for Marijuana newsletter reinforced this by stating “The Washington State Legislature is now in session and considering bills regarding vapor products, including Governor-requested legislation to ban vitamin E acetate and all flavorings, except tobacco flavoring, in non-THC vapor products.” 
    • HB 2826, legislation requested by the WSLCB in coordination with Governor Inslee and the DOH, would establish a prohibition on certain flavored THC vapor products in state law. The bill was introduced on January 23rd, the day before the release of the cited Topics and Trends newsletter, and received a public hearing on February 3rd during which Broschart testified that the WSLCB “strongly supports” their own proposal (audio – 1m, video). At publication time, HB 2826 was scheduled for executive session the morning of Thursday February 6th, one of very few cannabis-related bills with the potential to make it past the house of origin policy committee cutoff on Friday February 7th.
  • Hunter said that "the majority of the cannabis industry is just trying to tread water at this point" and tracking both agency rulemaking and active legislation was “challenging” for many businesses. Communications from the WSLCB were “taken at face value. It is concerning when the whole story isn’t told on this.” He asked for increased transparency from the agency “if there is going to be a House bill, for instance, that the LCB testifies in support of.”