WSLCB - Board Caucus
(March 29, 2022)

Here are some observations from the Tuesday March 29th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Chair David Postman introduced the panelists, starting with four owners of retail stores—three of which had been robbed—to give firsthand accounts of the crimes and trauma caused throughout the legal cannabis sector. 
  • Postman referred to the “massive public safety crisis that’s roaring through the state” from cannabis business robberies that left “tragic deaths”; traumatized employees and license holders; and constituted a broad threat to the public (audio - 4m, TVW, YouTube).
    • Referencing a spreadsheet compiled by Uncle Ike’s showing “70+ robberies of Washington cannabis stores” as of the “83rd day” of 2022, “we could be approaching one a day,” he warned.
    • He noted the “deep grieving still continues” for 29 year old Jordan Brown, a Tacoma retail employee killed during a robbery on March 19th, offering condolences on behalf of the agency to those mourning the loss as “people universally described him as just an incredibly nice and sweet young man.”
    • Postman then acknowledged recent deaths of Washington law enforcement officers in incidents not involving cannabis businesses, saying “this is a particularly hard time for law enforcement as well.”
      • 35 year old Pierce County Sheriff Deputy Dominique "Dom" Calata was shot along with another officer on March 16th before dying of his injuries.
      • 41 year old Everett Police Officer Dan Rocha was fatally shot during an altercation on March 25th.
      • Additionally, 33 year old Edmonds Police Officer Tyler Steffins was fatally stabbed on March 26th while on an off-duty trip to Las Vegas.
    • Postman welcomed panelists to contribute to deliberations over what more could be done to help licensees, first asking the licensees to introduce themselves and share “what their experiences have been with this crime spree.”
  • Jenna Rodriguez, Gypsy Greens Co-Owner (audio - 3m, TVW, YouTube).
    • Operating since 2013, first as an unlicensed medical dispensary then a licensed cannabis retailer with two locations, Rodriguez felt the coronavirus pandemic was “pretty rough, but then…these armed robberies started happening.” Robbed on February 24th, she admitted to being “extremely grateful for the way ours went, because absolutely nobody got hurt.” The perpetrators were “in and out in four minutes” taking cash and cannabis products, Rodriguez explained, but their employees were safe, there’d been “no customers in the store,” and they utilized training on how to react to a robbery as well as having functional panic buttons. “But for us it went pretty routinely,” she added, noting the very idea that a violent crime could be “routine” was problematic.
    • Postman asked her about a report that an employee had personal items taken. Rodriguez replied that the robbers took a staff member’s backpack to carry stolen product along with items like their child’s artwork.
  • Alden Linn, World of Weed Owner (audio - 4m, TVW, YouTube).
    • The robbery on March 19th when Brown had been killed occurred despite what Linn described as “a great safety record” with set procedures and employing two security officers. “We were just overran by four individuals,” he said, two subduing one guard outside while the other two entered his store and “fired a shot” before killing Brown. Linn called Brown “one of the stars of our team” who died despite staff going “above and beyond in our security protocols.”
    • Linn noted possible solutions included passage and implementation of the federal SAFE Banking Act, greater funding for law enforcement, and permitting armed guards at retail locations. Linn added that his store had been closed since the robbery and would stay closed “until we feel…safe and are able to open with confidence that we can handle ourselves.”
    • Take a look at the Remember Jordan Brown GoFundMe page.
  • Aaron Varney, Dockside Cannabis Owner (audio - 7m, TVW, YouTube).
    • With several locations in western Washington, Varney’s stores had been robbed repeatedly, first at the company’s Ballard location in October 2020, then at their Aurora Avenue location on January 5th where a staffer was shot repeatedly. According to the spreadsheet, the most recent robbery was at the retailer’s SODO Seattle location on March 10th. 
    • Varney offered condolences to Brown’s friends and family, stating, “our hearts go out to you” as one of the first legal cannabis retailers to face armed robbery. “You’re not alone,” he added, saying he was concerned for all “front line workers in cannabis retail today” who were essential both for the industry and their communities.
    • Varney believed that safety had to be “the foundation” of his business’s operations, which began as a dispensary in 2011 before becoming a licensed retailer. He said the “inability to use financial tools available to other businesses puts us at a risk and makes the public less safe,” noting his business’s inability to receive tax deductions for investing in security. 
    • Varney described how his company was in a “concessionary relationship with the state, we exist because you have granted us the right to sell cannabis.” He reasoned “47.1% of the funds in all cash registers in Washington State” were state funds which licensees were “collecting and protecting.” He suggested that some of the tax money could be used for a store’s security needs, pointing to an interview about the robberies in Seattle Now with staff from Mary Mart where they admitted to firing budtenders so they could afford “to hire armed security.”
    • He acknowledged the “only short-term solution we have found” was armed security, though it wasn’t his “first choice.” To hire professionally trained security, “the beginning cost is going to be $70 and up an hour,” Varney indicated. He understood “the folks that are able to afford” armed security were already “getting them,” and those who couldn’t were becoming “bigger targets than they were yesterday.”
  • Sara Eltinge, The Herbery CEO (audio - 4m, TVW, YouTube).
    • After opening in 2015, Eltinge said her four locations in Clark County had “not yet” been robbed in an “incredibly competitive industry.” She worried that "historically our industry has been unwilling to share best practices with each other" or collaborate towards common security goals. In doing so, Eltinge cautioned, “we’re just shoving the bad people to the next shop down the road.” She urged licensees and trade associations to open up about what has worked, or not, to minimize the risk of robberies.
    • Eltinge described her business’s 115 employees being “on pins and needles” and worrying about being robbed. As there were 21 retailers allotted to her region, Eltinge knew of no method to alert stores when one was robbed. She asked for WSLCB leaders to work with their counterparts in other states with medical or adult use cannabis retail to collect data on what deterred crimes “if any state has had something work yet.” Eltinge believed without regular communication channels “we cannot solve the problem.”

• Postman introduced Washington State Treasurer Mike Pellicciotti who gave an update on his SAFE Banking Act lobbying efforts in D.C. before hearing comments by state lawmakers and a national lobbyist on banking reforms and other legislative efforts to deter the crimes.
  • Postman announced that Governor Jay Inslee had asked his staff and the board to work with the Washington State Department of Financial Institutions (WA DFI) and others, “including licensees” to look at solutions to cannabis retailers being cash-only businesses. He suggested officials and stakeholders had to both “demand that Congress acts on the SAFE Banking Act” while also acting under an assumption that “they’re not going to do that” (audio - 2m, TVW, YouTube).
  • Pellicciotti commented on his lobbying of the Washington Congressional Delegations on the matter, as banking restrictions on cannabis businesses went “beyond any measure of anything that makes sense.” Banking reforms might not be a “full fix” for the crimes they were concerned with, but he was confident they’d improve the situation. Pellicciotti mentioned how the legislation had been passed by the U.S. House of Representatives “six times” but had yet to be passed by the U.S. Senate (audio - 7m, TVW, YouTube).
    • Pellicciotti attended a meeting of the National Association of State Treasurers (NAST) in Washington D.C. where he was part of a “banking committee” that was making the bill a priority. He remarked at being “encouraged” by the support he’d received, even from officials of states without legal cannabis.
    • He’d also met with Representative Ed Perlmutter’s staff, a SAFE Banking Act sponsor, to understand the “pressure points, what is holding this up,” since “if something’s not moving, there's a reason for it." Pellicciotti described differing views “on how to bring reform in this industry,” including Democratic leaders in the senate who indicated they were expecting “major reforms in addition to just the SAFE Banking Act.” While supportive of such reforms, he had the impression “those votes are not there.”
    • Pellicciotti then met with Washington senators Maria Cantwell and Patty Murray to impress upon them the importance of approving banking changes, saying he believed they’d recognized the urgency even before there’d been fatalities. “I am hopeful that in the months ahead that there might be some progress,” he said, envisioning a “very specific path” for the bill language to be amended into other legislation which the senate was likely to pass. One was the “America COMPETES Act,” which Pellicciotti considered the “most appropriate” opportunity to pass the legislation, adding that bill was in a finance committee Cantwell served on. The other option was the Cannabis Administration and Opportunity Act (CAOA) which had been proposed by Senate Majority Leader Chuck Schumer but not yet introduced as a bill, he remarked. However, Pellicciotti thought there was a better path to include the language in the America COMPETES Act if members of congress “push right now.”
      • WSLCB leaders reviewed the CAOA in September 2021.
    • On March 22nd, the Seattle Times reported on the violent trend wherein Pellicciotti and others suggested the “simple” fix for the crimes was federal approval of the SAFE Banking Act, legislation to give cannabis retailers access to common banking services like accepting credit cards. He furthered his call to act on the bill in social media and on talk radio.
    • Treasurers in Colorado and elsewhere had also called for this legislation to become law. Even a former Governor of Utah, where adult use retail remains prohibited, said members of congress “oughta be ashamed” for not acting on the matter in 2019.
    • The Columbian Editorial Board also supported the importance of this change on February 2nd.
  • Senator Karen Keiser went over her work on cannabis safety and labor issues as Washington State Senate Labor, Commerce, and Tribal Affairs Committee (WA Senate LCTA) Chair. She candidly voiced skepticism that Congress would act on the SAFE Banking Act “this year, I really am not holding my breath.” As for the state legislature, she felt the topic was at “an impasse and we need to move forward." Keiser considered robberies to not just be public safety concerns, but a workplace safety concern as well, and asked WSLCB officials to work with colleagues at the Washington State Department of Labor and Industries (WA LNI) “on what they think we should do to protect workers in these retail stores.” She speculated that state authorities could be empowered to act under emergency powers (audio - 5m, TVW, YouTube).
    • A possible solution was “two-door entry,” which she said was done for many businesses and kept individuals from entering a business without being “verified” by staff first. Keiser then called for “standardized training” of retail staff, whom she said were often working for “minimum wage, with tips.” She then indicated that the "hyper-competition" in the state cannabis sector was proving to be “counterproductive to both public safety and to worker safety.”
    • Keiser explained that she introduced SB 6033 in 2020, which would have required reporting of all robberies to WSLCB staff because they wouldn’t know if “organized crime” was behind any of the incidents without better information. She noted that representatives for the Washington Association of Sheriffs and Police Chiefs (WASPC) objected to the bill with “detailed issues” she nonetheless believed could have been worked out. Keiser alleged that a retail trade association didn’t want “to hear about [it] because they were concerned it would imply that it wasn‘t a safe industry.” She exclaimed, “two years later we know damn well it’s dangerous.”
    • Keiser wanted something done, declaring “we cannot dither around any further and wait for Congress to act” nor industry to collaborate because “people are dying and people are being terrified.” She had also heard from licensed producers and processors that they wanted to be included in the discussion around security, and noted she planned to introduce relevant legislation in 2023.
  • Michael Correia, National Cannabis Industry Association (NCIA) Director of Government Relations, considered the lack of progress on the SAFE Banking Act to be indicative of a conflict between “incremental versus comprehensive reform” at the national level. He said NCIA members had been lobbying congress for the past nine years on financial access for the industry, expecting an “eight to ten year process, and boy was I off.” Correia had been focused on incremental changes so that cannabis retailers could operate “legally…without having to worry about some of the issues that you have to worry about.” He’d instead been “bogged down” by the “intricacies of comprehensive reform and cannabis legalization” (audio - 10m, TVW, YouTube).
    • Correia already considered banking issues to be related to public safety, but the call to connect those topics had grown ever since NCIA member Dockside Cannabis had an employee shot during a robbery on January 5th. He agreed with Pellicciotti’s assessment and thanked him for lobbying on the topic.
    • Correia described a “narrative that is going on in D.C, right now between advocates and industry” that was making “incremental and comprehensive reform mutually exclusive.” He felt seasoned lobbyists and legislators understood the value of incremental changes, but named “the Drug Policy Alliance” along with Senators Schumer and Cory Booker as feeling like SAFE Banking would only help “fatcat Wall Street bankers get rich, and that only…comprehensive cannabis reform will address the issue.” NCIA members supported and had lobbied for comprehensive cannabis legalization, Correia said, but the votes were in favor of the SAFE Banking Act.
      • Correia spoke about the federal policy landscape to the Cannabis Alliance in September 2021, including lobbying on CAOA (see the group’s official response). He characterized the position of some as “unless you have comprehensive reform that addresses every issue in the war on drugs” along with any “issue associated with the harms of the war on drugs and prohibition, well then, we’re not going to do it.”
    • Correia pointed out that SAFE Banking had enjoyed widespread bipartisan support in the House and “42 cosponsors” in the Senate, something most national issues didn’t have. “It’s not cannabis prohibitionists that are stopping SAFE from moving, it’s our cannabis champions,” he insisted, claiming Schumer had already removed SAFE Banking language from the America COMPETES Act. Correia pointed out that Schumer had similarly had the language dropped from the National Defense Authorization Act for Fiscal Year 2022 in December 2021 even though there was “overwhelming support” for the change.
    • Calling attention to the fact that Cantwell wasn’t a cosponsor of the senate version of the legislation, Correia wondered aloud what her objection was. He believed Cantwell and Murray were representing the state well on many things, and getting their names on the legislation would only help its odds of being passed.
    • Though he disagreed with Schumer’s view on the issue of cannabis banking, Correia believed he could be moved to act if enough members of his caucus were calling for it, adding that Perlmutter was “getting very frustrated” with the Senate’s inaction as well. Correia and others had been waiting “15 months” for Schumer to formally introduce CAOA, but he remained confident “the votes aren't there.” He was content to pass SAFE Banking “and then the moment that’s done let's move on to comprehensive reform which will take a lot longer.”
    • Varney wanted to know whether passage of the SAFE Banking Act translated into “Visa/Master Card access” for retailers, or if “maybe it will, depending on other things.” Correia answered that as long as cannabis was a Schedule I federally controlled substance, the U.S. Department of Justice could take action against a business, which dissuaded “credit card processors from wanting to get involved” in cannabis retail. SAFE Banking wouldn’t “[guarantee] anything,” but it would let banks and regulators have “just a little more certainty of what the federal government’s doing” (audio - 2m, TVW, YouTube).
  • Representative Kelly Chambers commented that she’d cosponsored HB 2029, the House companion to the senate robbery bill, but that it hadn’t been granted a public hearing. Having grown up in the neighborhood near Linn’s retail store, she offered condolences and noted she owned a small business which helped her appreciate the pressures he faced (audio - 3m, TVW, YouTube).
    • She asked Correia for any factsheets he had pertaining to the SAFE Banking Act. 
    • Chambers encouraged cannabis trade groups and licensees to work with WSLCB officials on “best practices” for retail security “so that [they’re] not having to…recreate the wheel.”
  • On March 29th, King County Councilmember Reagan Dunn pre-filed a motion to have the county “executive establish a marijuana retail security task force to develop strategies to prevent criminal activity targeting marijuana retailers and address security concerns at marijuana retail locations and to provide a report."
    • See legislation details and the text of the proposal.

• Senior WSLCB leaders and Barbara Serrano, the Governor’s Senior Policy Advisor for Public Safety, offered insights along with panelist questions and suggestions.
  • Rodriguez noted an employee lost their account with Bank of America when it was realized the employee was getting paychecks from a licensed retailer “because they’re federally backed as well.” She used O Bee Credit Union but found their “fees are outrageous," which dissuaded her from making additional deposits (audio - 2m, TVW, YouTube).
  • Keiser recalled when retail cannabis first began, the state “used armored cars to pick up the tax receipts from the stores” and deliver them to the treasurer’s office, wondering if this could be used for retailers now. Postman spoke up to say state authorities were looking at potential for cashless transactions (audio - 2m, TVW, YouTube).
  • Serrano offered "a note of caution" on bills that only enhance “existing penalties for armed robbery.” As armed robbery in the first degree already carried a “life sentence,” Serrano was skeptical that “adding 12 months is going to make much of a difference, or be a deterrent. These guys are not thinking about that on the way to the store” (audio - 4m, TVW, YouTube).
    • She described Governor Inslee as “not a fan” of creating new criminal offenses or adding sentencing enhancements, “which tend to disproportionately affect people of color.”
    • Serrano spoke favorably about Keiser’s suggestion for a “two-door entry point,” though she was mindful “that is a very high expense” as were “armed security guards.” She noted that lawmakers in California proposed a dedicated tax credit for retailers investing in security measures and that Washington legislators could consider a similar tax break in 2023.
    • Postman suspected that “part of the…impetus behind some of the sentencing enhancements is out of a frustration” with inaction on cannabis retail security.
  • Varney appreciated that some lawmakers were motivated to act, noting that some of his employees hadn’t returned to work due to mental health needs (audio - 5m, TVW, YouTube).
    • He considered information sharing to be “crucial,” and wanted more data on how many documented robberies had been at businesses with armed security.
    • As for a tax credit, he felt that "those that can afford [guards] are already doing it" and, although his business had employed them, “we don’t know that we can afford it.” Varney wanted state support for retail security “until the ability to get cash out of the stores is a reality.” Curious “who banks the LCB’s excise funds,” he expected the agency had “a lot of pull” with that financial institution.
    • Summertime was sure to see “more problems than not” for retailers, Varney claimed, fearful that officials would be “reactive instead of proactive” and that the next robbery fatality might be a customer.
  • Correia reminded the group that because banking was “such a federal issue,” state policymakers had less control. Near-term mitigation options could be offered and then “eased up” as U.S. law changed, he said. Postman made clear that armored cars had picked up money from WSLCB offices but not “from the retailers.” He didn’t want to wait for Congress, stating that the board would look into possible emergency actions as well as try to facilitate greater communication among licensees (audio - 3m, TVW, YouTube).
  • Varney asked whether WSLCB Enforcement staff could “offer support” like safety training (audio - 2m, TVW, YouTube) after which Eltinge cautioned, "there are not enough LCB officers for this current crisis" (audio - 6m, TVW, YouTube).
    • Eltinge said she was following up on training that her officer suggested, but “logistically” there were more stores than Enforcement and Compliance staff could handle. Whether WSLCB provided training themselves, or subsidized the business getting it, Eltinge said small retailers were often unable to “even start looking into these things.” Having no background in retail security or loss prevention, she anticipated it would be difficult for businesses “drowning already” under existing laws and rules. Postman promised to help coordinate training resources around worker safety from local police departments and WA LNI.
    • Chambers shared that a former military constituent of hers had experience creating a "threat assessment” for a private business. Eltinge didn’t think some stores could afford to seek out and employ safety professionals. This led Chambers to recommend having cannabis trade associations or WSLCB officials fill that gap (audio - 2m, TVW, YouTube).
    • Director of Education and Enforcement Chandra Brady said her division was identifying ways to help licensees, such as “looking to other industries who have experienced this type of thing” or getting licensees together to discuss “some lessons learned” (audio - 1m, TVW, YouTube).
    • Rodriguez followed up on Eltinge’s remarks, saying she was one of those small businesses that had to figure out a way forward after a robbery. She had to “become this expert" on security issues, and encouraged more information sharing within the sector (audio - 1m, TVW, YouTube).
  • Director Rick Garza told the panel he had been unaware cannabis associations weren’t communicating about robberies, but internal talks had already begun between WSLCB and other agencies about what could be done to help (audio - 4m, TVW, YouTube).
    • Garza said the agency had “lost our national bank” after they began regulating cannabis businesses, and had moved to Timberland State Bank. He understood “those fees are killing the industry” but insisted that cannabis businesses had access to “state chartered banks and state banks” that other adult-use cannabis jurisdictions did not.
    • Credit card use by retailers was another area Garza said would be improved by lawmakers passing the SAFE Banking Act, but shared Keiser’s sentiment that they couldn’t wait for federal action. He confirmed that “administrative action” like emergency rules were under consideration.
    • Postman reported that WSLCB Chief Financial Officer Jim Morgan told him it would be possible to help pay for security consultations and the agency would develop that option. He promised to “put that at the top of the list” to begin “immediately.”
  • Varney noted that the only federally deductible tax expense for cannabis companies was “the cost of the product” - not security, training, nor other investments. He suggested adding guards was a good first step, as well as “de-escalation training” for staff (audio - 7m, TVW, YouTube).
    • Varney noted that increased security in the evening and reduced hours of operation had failed to stop a second robbery at one of his locations which took place at 9:45am, and that other attempted break-ins after hours at his store hadn’t even been reported. 
    • Varney reported that while security costs in the industry were “rising, the revenue is decreasing," and retailers were struggling to retain employees “because they don’t feel safe to come to work.”
  • Board Member Ollie Garrett was thankful for all the feedback and ideas that had been shared, assuring those present that the agency would be looking at what could be done to help without putting more expenses on small businesses. She advised having the board and staff talk through the topic at the next Executive Management Team (EMT) meeting. Postman seconded the idea (audio - 2m, TVW, YouTube).
  • Chambers asked what data had been collected on the robberies and encouraged having the spreadsheet compiled by Uncle Ike’s reviewed by law enforcement in order to create additional “hard data” about the crimes (audio - 1m, TVW, YouTube).
  • Senator T'wina Nobles had listened to the discussion and thanked retailers for speaking up while encouraging licensed producers and processors to also be included in the conversation. She believed the issue of retail safety impacted “community members, family members,” and licensees who “care about community” and had helped her educate others on “how to get into the industry.” (audio - 4m, TVW, YouTube).
    • She assured attendees she would “continue to be a champion" for legal cannabis and a "voice for what the industry needs." Nobles thanked licensees and their employees for their contributions to communities.
      • Nobles accepted an invitation to speak at a Washington CannaBusiness Association (WACA) event for the first time in November 2021.
    • Postman agreed with her impression of the industry and encouraged legislators to share any solutions with agency staff and stay engaged with their work.
  • Varney thanked all those involved in the meeting before mentioning the GoFundMe page for Jordan Brown’s family. He agreed with Nobles’ effort to "humanize this” subject, viewing the cannabis sector as “a loving community, and it's really challenging to see so much pain shooting through it right now." Varney mentioned an employee in a robbery who considered intervening, but remembered de-escalation training and chose not to act. He said the result was “everybody got to go home that day” (audio - 4m, TVW, YouTube).
    • Rodriguez was also appreciative of those who participated in the roundtable, having found the conversation “very helpful.” Postman assured her that officials would compile a list of suggestions, and that their first solution would be safety training for store staff (audio - 1m, TVW, YouTube).
    • Eltinge asked that regulators not wait for a perfect solution as “my people are afraid now” (audio - 1m, TVW, YouTube).
  • Postman thanked participants and gave his word that the staff and board weren’t content waiting on Congress to improve the situation (audio - 4m, TVW, YouTube).
    • Postman explained, “the voters are the ones who gave us [legal cannabis], and said ‘let’s do this, it’s a harm reduction measure’” to “pull back from…the failed war on drugs.” Recognizing that the state worked under this “voter mandate,” he hoped that federal lawmakers recognized how state authorities were “running up against a wall” of federal rules keeping cannabis retail cash-only.
    • On a parallel track, Postman made clear regulators would “figure out what we [can] do” to help licensees and the public regardless of federal inaction, believing that a cannabis store should be no less safe for people than “a brew pub.”
    • He also promised the agency would keep looking at options and giving public updates on their solutions. Postman added that he welcomed anyone with thoughts on the matter to submit written comments to the agency, crediting Green Tiki Cannabis Owner Christy Stanley as someone with ideas about “cashless systems” who had reached out to agency staff and was actively participating in developing solutions.