WSLCB - Board Caucus
(April 14, 2020)

Here are some observations from the Tuesday April 14th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Director Rick Garza provided a lengthy look back on WSLCB’s operational activities in response to the COVID-19 pandemic, and offered hints about what lay ahead for the agency and the State.
  • Continuing the temporary requirement for public meetings to be hosted virtually due to the coronavirus outbreak, board members and staff connected via WebEx similar to WSLCB Special Board Meetings hosted on March 27th and April 6th. A dial in number was posted to the agency’s website around 24 hours prior to the public meeting.
  • Garza briefed on an assortment of topics, most prominently the agency’s internal and external operations since early March ahead of Governor Jay Inslee’s “Stay Home, Stay Healthy” order signed on March 23rd and extended through May 4th.
    • Learn more about Washington’s response to the public health crisis at coronavirus.wa.gov.
  • Internal Operations (audio - 10m). Garza addressed how the crisis was impacting “our employees and our move out of the office.”
    • He said WSLCB’s management team continued to communicate each work day at 9am via agency technology taken “out of the office with us to our homes.” The team had also been meeting at 4pm each day, but had been able to scale back that commitment. Participants included:
      • Megan Duffy, Deputy Director 
      • Dustin Dickson, Executive Assistant
      • James Morgan, Chief Financial Officer (CFO)
      • Mary Mueller, Chief Information Officer (CIO)
      • Claris Nnanabu, Director of Human Resources
      • Justin Nordhorn, Enforcement Chief 
      • Becky Smith, Director of Licensing 
      • Brian Smith, Director of Communications
    • Expressing gratitude for a “remarkably smooth” transition, Garza commended the communications among agency divisions and leadership. He was equally positive about communications from the Governor’s Office, saying Inslee’s proclamations on the health emergency enabled WSLCB to “practically implement them” with emergency rulemaking.
    • While getting employees to work from home had been “rather seamless,” Garza said that agency management was looking at “how do we transition back into the office?” He expressed confidence that agencies would be given an “enterprise model” to follow from the Washington State Department of Human Resources which had created a telework policy memorandum for state employees. Regardless of the transition back, consensus was emerging that "there's going to be a new norm" about teleworking in government and that “might mean something very different than what we did before we left the offices.” He envisioned any return would be “stage[d]” and “phased in.”
    • Garza said his weekly one-on-one meetings with Rushford continued and had been expanded to include Duffy to share internal operational perspectives. Given situational constraints on communication between the three board members, Garza was taking the step of setting up independent meetings with Board Members Ollie Garrett and Russ Hauge also inclusive of Duffy.
    • Rushford thanked Garza and the management team for their “outstanding” efforts during a stressful period, noting her view that “trust and leadership in the organization is at an all time high.”
  • External Operations (audio - 10m). Garza said the management team opened up their daily meetings to other agency staff at 10am to deal with external matters brought to the agency. He indicated there had been "over 80 issues that we’ve dealt with."
    • Board and agency participants included:
      • Jane Rushford, Board Chair
      • Sara Cooley-Broschart, Public Health Education Liaison
      • Kathy Hoffman, Policy and Rules Manager
      • Chris Thompson, Director of Legislative Relations
    • "A lot of it...has to do with creating allowances," Garza stated, adding that agency staff had been "doing everything we could to assist” licensees during a period of restricted business and public activities.
    • Garza said that Nordhorn had “posted a WebEx with cannabis retailers” on issues such as new guidance from the Washington State Department of Licensing (DOL) extending drivers’ license renewals in Washington and curbside pickup “social distancing policies or best practices” for retailers. All of the guidance supported the Governor’s efforts to “reduce social contact.” He noted the agency had asked three cannabis trade groups which represented retailers to share their impressions of the agency’s COVID-19 Frequently Asked Questions (FAQ). Later, Garza said he believed the presentation had been recorded and indicated that the agency was considering hosting a second WebEx presentation for cannabis producers and processors.
    • Garza also explained that two WSLCB Enforcement officers had been assigned to an emergency operations center overseen by the Washington State Patrol (WSP) quartered in the State’s Emergency Management Division (EMD) at Camp Murray. The WSLCB officers were helping staff a “hotline” at the center where allegations about public gatherings or nonessential businesses still in operation were processed. Garza indicated law enforcement focus was on achieving business compliance rather than making arrests or issuing fines. The center had “fielded” 15,000 calls so far of which “about a thousand” pertained to liquor establishments, leading the agency to adopt emergency rules allowing suspension of licenses found to be violating the Governor’s proclamations. Garza commended the work of Nordhorn, the Washington Association of Sheriffs and Police Chiefs (WASPC), and WSP, saying overall it was “going quite well.”
      • Several local governments had set up their own operations centers, including Seattle & King County, Lewis County, and Skamania County.
      • See contact information for the Washington Military Department, including phone numbers for the Camp Murray emergency operations center.
    • In his review of internal operations, Garza noted COVID-19 updates on the agency’s public web site would continue.
• Though the agency’s rulemaking had stalled, Policy and Rules Manager Kathy Hoffman outlined gradual steps towards renewed rule development.
  • Hoffman’s last rulemaking update was on March 27th.
  • Quality Control (QC) Testing and Product Requirements (audio - 1m). Hoffman said the CR-102 withdrawn by the Board on March 27th would be refiled to update the rulemaking project’s timeline “for purposes of public hearing and to update implementation” and “phase in.”
  • True Party of Interest (TPI, WSR 18-22-054) and Voluntary Compliance Program (VCP, WSR 19-15-074, audio - 2m). In-person listen and learn forums for both topics had been suspended due to COVID-19. Hoffman was working on a revised meeting format using WebEx to "allow for stakeholder engagement" without physical gatherings. Hoffman anticipated virtual forums would be scheduled by the end of the month, shifting completion of the CR-102 into mid- or late-May with the CR-103 following in June.
  • Incremental Expansion of Tier 1 Canopy (WSR 20-01-171, audio - 2m). Another project where stakeholder engagement had been delayed, Hoffman expected to schedule two listen and learn sessions focused on different sections of WAC 314-55-075. She planned to evaluate public engagement at the TPI and VCP forums before committing another rulemaking project to the revised format. Hoffman said she had her “fingers crossed” that in-person meetings would resume by June 2020.
  • Cannabis Retail Title Certificates (WSR 18-09-117, audio - 1m). Hoffman reminded the Board about this CR-101 originally filed in April 2018. She indicated licensing staff were considering whether WSLCB could “fold in” the requirements of SB 6206, signed into law on March 25th, which established a new kind of certificate declaring retail location compliance. If not, the agency would likely withdraw the dusty rulemaking project in favor of refiling.
    • Cannabis retail title certificates were created by the agency for issuance to licensees which cannot operate due to bans or moratoriums in their jurisdictions. Developed in autumn of 2018, Becky Smith last reported that there were 46 retail title certificate holders as of October 9th, 2019.
  • Vitamin E Acetate Prohibition (audio - 2m). Four emergency rules around the ban on use of the compound in vapor products were revised and extended by the Board on February 5th and set to expire “on or about June 4th.” Hoffman said staff would propose that the Board “strategically extend” the emergency rules again to last through the implementation of HB 2826, WSLCB request legislation around regulation of cannabis vapor products also signed by the Governor on March 25th.
    • Section 3(m) of the session law allowed the board to declare, “following consultation with the department of health or any other authority the board deems appropriate, that the device, additive, solvent, ingredient, or compound may pose a risk to public health or youth access.”
    • On March 19th the Washington State Board of Health (SBOH) extended their emergency ban on vitamin E acetate which WSLCB had been using as the basis of authority for their existing emergency rules against use of the compound in vapor products.
  • Enforcement of Governor's Proclamations (audio - 1m). Hoffman said the emergency rules adopted by the Board on March 27th and April 6th may need to be extended in “late June, first part of July.”
• Hoffman mentioned efforts to begin implementation of cannabis agency request legislation passed earlier in the year, HB 2826 and HB 2870.
  • Thompson provided his last legislative update on March 3rd.
  • Hoffman reiterated an earlier statement about a need for “strategic, planned” rulemaking in order to implement cannabis product and social equity legislation which had been signed into law.
  • HB 2826 - “Clarifying the authority of the liquor and cannabis board to regulate marijuana vapor products.” Hoffman said the new law empowered WSLCB to ban vitamin E acetate in cannabis vapor products through regular rulemaking. Going through an overview of bills that had passed, Hoffman remarked that staff were “still trying to coordinate which pieces of rule we need to update and how we’re going to fit that in.”
  • HB 2870 - “Allowing additional marijuana retail licenses for social equity purposes.” Hoffman noted the law included rulemaking which was required to be completed by December 1st, 2020 (audio - 3m).
    • During his update, Garza told the Board that he and Garrett had met with some state agencies involved in the WSLCB request legislation on social equity passed in March. The agency was currently waiting for the Legislature to appoint members to the task force created under the bill. Garza said the agency had reached out to the Legislature to learn “when they plan to begin to make those appointments” so that participating agencies could meet a requirement to hold the task force’s first meeting by July 1st (audio - 5m).