WSLCB - Board Meeting
(July 20, 2022)

Here are some observations from the Wednesday July 20th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Policy and Rules Coordinator Jeff Kildahl presented a petition to make curbside and walk-up cannabis sales permanent, which was denied by the board because of concerns that doing so would be a violation of state law (audio - 5m, WSLCB video, TVW video).
  • Policy and Rules Manager Kathy Hoffman initially talked about the petition on June 7th. Agency leaders discussed it again on July 12th and Kildahl briefly mentioned it during the July 19th caucus.
  • Kildahl reported that the petition had been received on May 24th and was submitted by Jeffrey Clark who wanted a “permanent allowance of curbside and walk-up cannabis sales through amendment of LCB rules.” He said that Clark owned a Vancouver retail store in "a small business formerly used as a coffeeshop" with “approximately 150 square feet” of interior space. This “lack of adequate interior space for social distancing” amidst a continuing coronavirus pandemic “as well as the safety of staff in the event of a robbery” made the petitioner feel curbside and walk-up sales should be reinstated, Kildahl stated. 
    • Kildahl provided more context around the allowance which had been established in March 2020 as part of the agency COVID-19 guidelines and involved temporary suspension of enforcement of parts of RCW 69.50.390. The allowance required checking identification, video surveillance, and “demarcation of the curbside service area.”
    • In June of 2021, many COVID-19 restrictions were lifted which led the board to allow curbside and walk-up allowances to lapse, Kildahl noted, but they were “reactivated…due to a dramatic increase in COVID-19 cases” and “extended in October 2021” before the allowance again expired on June 1st.
      • Board members discussed the allowances on May 24th.
    • Kildahl made clear the board’s intention that the allowances be “temporary measures” to support social distancing, and that staff determined that RCW 69.50.390 would need to be amended by law to “allow curbside and walk-up sales before permanent rules” could be approved by the board. For this reason, his recommendation was that board members deny the petition.
  • Board Chair David Postman commented that the "statute is clear" on the matter but the board would “keep an eye on what is happening with the pandemic” even as he hadn’t seen an indication there would “be additional restrictions on business operations” (audio - 1m, WSLCB video, TVW video).
    • He promised the board had the ability to reinstate the allowance if the pandemic led to revised business guidance from Governor Jay Inslee impacting cannabis retailers (audio - 1m, WSLCB video, TVW video).
  • Vollendroff concurred that the state was “undoubtedly in a pandemic” and the “fluid” circumstances meant they would continue to monitor the situation and bring back temporary allowances if warranted (audio - 1m, WSLCB video, TVW video).
  • The board voted unanimously to deny the petition for curbside and walk-up cannabis sales (audio - <1m, WSLCB video, TVW video).

• The board next received a briefing on rescinding a board interim policy (BIP) involving wet flower transfer and plans to migrate the language to a policy statement followed by formal rulemaking (audio - 4m, WSLCB video, TVW video, BIP 04-2016).
  • The board began to rescind unnecessary BIPs in September 2021, transitioning some into policy statements. Hoffman mentioned the plan to end BIP 04-2016 on “Wet Flower Transfers” during her rulemaking update on July 5th.
  • Hoffman described the background on rescinding BIPs and moving to policy statements that were filed with the Washington State Office of the Code Reviser (WA CRO) as this allowed for “a formal process for the public to request the conversion” of a statement into rule “or to challenge” the statement. BIPs were designed as a short-term fix, she stated, using BIP 15-2019 as an example, language adopted for a couple of months to allow for the return of vapor products for credit as a precaution during a series of vapor-related lung illnesses in 2019.
  • The BIP on transfer of wet cannabis flower took effect in August 2016, and Hoffman explained that it impacted WAC 314-55-075, allowing for producers to “cost-effectively transfer harvested wet…plants to processors for processing into lots.” She mentioned that the rule section had been “opened twice since that time for very narrowly scoped rulemaking," most recently for the tier 1 expansion project completed in July 2021.
  • Hoffman intended to open a rulemaking project that could consider making this change permanent “next month.” With the board’s approval to rescind the BIP, she planned to file policy statement PS22-03 with the WA CRO that day.
  • Postman asked Hoffman to confirm there were no changes between the BIP and the policy statement, which she did (audio - <1m, WSLCB video, TVW video).
  • The board voted to rescind BIP 04-2016 (audio - <1m, WSLCB video, TVW video).

• Public comments touched on a continuing coronavirus pandemic; allegations of corruption within the agency and board; and a producer voiced problems with sampling protocols which he believed undermined pesticide testing while describing challenges the selldown period had compounded in the regulated market.
  • “B.” (audio - 3m, WSLCB video, TVW video)
    • Supporting the curbside and walk-up allowances, they argued that “safety concerns had been mentioned as possible reasons” to let them lapse, but they’d heard of “zero incidents stemming from the curbside allowance.” Zoning concerns notwithstanding, B’s understanding of complaint investigations in the 2021 Annual Report by the agency was that “more than 10,000 were for alcohol and just 570 for cannabis.” They indicated that compliance in not selling to minors had been at 95% for cannabis “while liquor and tobacco had compliance rates of just 75%.” Despite this, they observed that “more generous allowances for delivery of alcohol were extended all the way through June of 2023.”
    • B remarked that their “most important” comment was that though all board members had voiced concerns about COVID, they permitted “the most effective protection for vulnerable individuals to expire. Since those allowances lapsed on June 1st” the state had had “more than 4,000 additional hospitalizations” due to the pandemic, with coronavirus ranking as “2nd leading cause of death in Washington.” They considered the loss of the allowances “during the onset of [the omicron variant] has felt, to many, discriminatory and punitively bureaucratic.” In light of the continued federal guidance around COVID-19 and risks to vulnerable populations with “comorbidities,” B urged the board to reinstate curbside and walk-up allowances, or make them permanent.
    • Postman thanked B for their “thoughtful” input (audio - <1m, WSLCB video, TVW video). 
  • Christopher King (audio - 6m, WSLCB video, TVW video). 
    • King last addressed the board on June 22nd. He signed up to speak on July 6th but wasn’t present when called upon. He also spoke to the board at meetings on March 2nd, 16th, and 30th.
    • King accused WSLCB of having “been fraught with corruption for years,” raising a variety of complaints he’d previously spoken to at prior meetings as “independent” evidence of “cronyism” and bias by agency leaders. “In terms of transparency, just remember…you guys work for us,” he warned.
    • King pointed to a “stunt by Paula Sardinas’ attorneys” attempting to frame his earlier public comment about a family member of Board Member Ollie Garrett.
      • King previously talked about his lawsuit against WSLCB during agency community outreach in 2020. In his federal complaint against WSLCB and agency leaders, he alleged that WSLCB lacked constitutional authority to commission individuals as a limited-authority law enforcement agency for cannabis. King, along with plaintiffs Cynjo Raylene Hall and John Novak, last filed briefs on the case in February. Along with having represented Hall and Novak, King had mentioned getting a case of “wrongful prosecution” by WSLCB officials against Levi Lyon of LyonPride Music dismissed.
        • Find out more about the federal case from an August 2021 editorial and the case docket.
      • Sardinas, a former Washington State Commission on African American Affairs (WA CAAA) Commissioner and President and CEO of FMS Global Strategies, represented WA CAAA on the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) as Co-Chair before resigning from the commission in 2021, which initiated her removal as co-chair over public objections, as well as her own.
    • Postman paused King’s comment time to say that King was given “a lot of leeway to talk; I’m just going to beg you to leave board member’s personal lives out of this conversation, it’s not germane to what we do” and he considered it “disruptive.”
    • King disagreed, saying that Garrett’s “friend, Paula Sardinas, and her lawyers, twisted it in court and cut off half of what I said.”  Playing an audio recording he indicated was of a lawyer claiming King’s remarks about Garrett’s personal life had made her cry, King asserted the attorney was “associated with Emerald Haze” and was “telling lies about this, Ollie was never crying, she was taking notes” she’d subsequently stated she didn’t have. He was concerned about a lack of transparency into public records, telling the board “those are my notes” as a citizen.
      • Previously, King had distributed emails with excerpts of remarks he asserted were from Sardinas’ counsel, along with a link to his “The Chronology of A Bogus Protective Order by FMS Global Strategy and Puppyland Lobbyist Paula Sardinas.” 
    • “All I’ve been doing here,” King said, “is trying to get information” on WSLCB staff communications with Kevin Shelton which had been “promised on the 15th of July” but hadn’t arrived (“it was the third delay”). He claimed other people had also been waiting on public records from the agency and that “nobody can get the documents as to how Emerald Haze got their licenses, when it’s a known fact that the only people who get licenses had to come through two criminals, Jim Buchanan and…Paula Sardinas.” Having earlier pointed out that he’d hired a “well known family and private investigat[or], Adam Winquist,” King alleged the two had “horrible driving records, passing bad checks…and continuing legal issues” that needed to be investigated due to their involvement with “the policy of this board.”
      • Emerald Haze had been called “the only majority black-owned store in Washington” by BEC Founder Aaron Barfield in remarks to the board in 2019. At that time, he named Buchanan as an investor in the business when he claimed WSLCB had assisted Miles Alexander in a successful lawsuit which resulted in her taking over Emerald Haze. In 2020, BEC filed a federal lawsuit against the U.S. Department of Justice, Inslee, and the WSLCB over alleged administration of “an unconstitutional and unlawful system of Marijuana regulation and licensing.” Ownership of Emerald Haze was eventually returned to Buchanan, though Cannabis Observer had not seen evidence that this was done due to action or influence from Garrett, who offered no comments on Barfield’s claims at the time.
      • On June 8th, King made the charge that Garrett was also “associated” with Sardinas, whom he claimed called him “a disbarred attorney” and “dangerous.” He added that when he told Sardinas he’d “drafted [a] lawsuit for defamation” about her claims, she’d contacted a former dispensary owner “to get him away from us.”
  • Sami Saad and Kevin Shelton signed up to speak but were unavailable when called upon.
    • Shelton’s written comments to the board included a contention that “for the past several months while we've been waiting on public records requested from the WSLCB or case was dismissed on July 8th, 2022 with no due process of law (we are still waiting on public records). Our case was dismissed but the truth will not be dismissed. We are still demanding the certified mail we were instructed by Nate Miles to send to board member Ollie Garrett, We demand the information on new retail licenses issued to BLACK EXCELLENCE IN CANNABIS & Kaleafa. We would also like to know why other medical cannabis farmer's markets & cannabis compassion clubs are allowed to operate?”
  • Joe Rammell, The Plant Factory and New Day Cannabis Owner (audio - 4m, WSLCB video, TVW video). 
    • Rammell reported being troubled by “the problem that has been created [in the Spokane area] for the legitimate growers with this pesticide testing program.” He’d long felt that “if you're going to allow self-sampling, you might as well not do it” because the practice left numerous ways “to work around the system.”
    • More concerning for Rammell was how policy statement PS-22-01 signaled that cannabis harvested before rules went into effect on April 2nd didn’t have to be tested for pesticides, which included his most recent harvest, “although everything we’ve ever had tested comes back non-detected, we don’t use pesticides.” He attributed a decline in the wholesale price of cannabis flower in part to a rush by cannabis businesses to “dump” products grown with pesticides before a September 22nd deadline prohibiting their sale, something he felt squeezed his businesses.
    • What Rammell wanted to know was why “did we give the bad players three or four months to dump this product on the market and they’re killing the good players. I just laid off half of my staff and shut down half of my buildings.” He wondered if the board—which took three and a half years to complete the rulemaking project—”anticipate[d] that being a problem.” 
    • Rammell said he’d been told by staff of a cannabis testing lab that they’d refined their processes to test for “pesticides and microbials at the same time” only to find evidence of pesticide use in cannabis that was harvested prior to April 2nd. He claimed that when the lab forwarded testing results to WSLCB they’d been told “quit sending us this stuff.” Due to self sampling, Rammell didn’t feel existing rules kept products with pesticides off the shelves, but they did “kill the legitimate guys.”
    • Postman replied that “we are aware of these concerns” but doubted any staff told Rammell to “quit sending” information to them. He expounded upon the fact that if specific complaints were filed against licensees, the board isn’t “allowed to know” the status of complaints in the event the board adjudicates them. Postman pointed out that a selldown date for product which hadn’t passed pesticide testing wasn’t designed to help “bad guys,” but had been suggested by “folks in the same situation you were” who claimed they didn’t use pesticides but wanted to sell their current inventory before new rules and testing costs took effect. Moreover, he believed their system had been “built on compromises" so as to not “be too onerous” during the transition period. Postman nonetheless promised to follow up with Rammell (audio - 1m, WSLCB video, TVW video). 
    • Rammell previously commented during a November 2020 special board meeting, and provided comment in an August 2019 listen and learn forum.
  • Postman concluded the public comment period with a remark that the board allowed “people who comment wide latitude in what they say" out of respect for state law. He agreed with King’s statement that board members “work for the residents of Washington state and we always want to hear from them." With that established, Postman said he didn’t want anyone to get the impression “allowing those comments is in any way means that this board endorses those comments.” Arguing that he’d made an effort to ask commenters to “stay on point, be respectful,” he considered “I’ve largely failed on that in some regards” which disappointed him. Postman felt there was “interesting input” in comments that the board valued, as “we hear something different” than what “our lobbyist friends” tell them. However, he didn’t appreciate a “continuing focus on board members’ personal lives and…personal trauma.” He called Garrett “stronger than I am” for sitting “through this, over and over again” and hoped there’d be “a little mercy and politeness and civility" (audio - 1m, WSLCB video, TVW video).
  • Vollendroff seconded Postman’s perspective, finding that public comments “help the work that we do,” even as “personal attacks are not necessarily helpful" (audio - <1m, WSLCB video, TVW video).