WSLCB - Board Caucus
(August 21, 2018)

Here are some observations from the Tuesday August 21st Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top three takeaways:

• In preparation for the subsequent Board Meeting, WSLCB Policy and Rules Coordinator Joanna Eide briefed the Board on the 2018 cannabis legislation rules package (transcript, audio).
  • Eide explained that CBD product obtained from sources not licensed under WAC 314-55 and previously tested by the Washington State Department of Agriculture have contained pesticides and heavy metals at “alarming levels.”
  • WSLCB is proposing screening for pesticides, heavy metals, residual solvents, microbiologicals, and mycotoxins as well as potency testing to ensure non-502 additives have less than .3% THC.
  • Eide assured Board members that rules will allow for quick action against violations: “…if a licensee or certified lab violates any of the provisions of this section, they’re subject to disciplinary action, including possible summary suspension or revocation of the producer license, processor license, producer/processor license, or lab certification.”
• The Board and agency staff discussed at length the new CR 101 on quality assurance testing and product requirements (transcript, audio - 23m).
  • Board Member Russ Hauge described previous thinking on pesticide testing: “the LCB has not ignored the pesticide issue, but approached it in a way that we thought was more cost effective by saying we’re not going to require testing, but the only pesticides you can use are pesticides we’re pretty sure are gonna be safe.”
  • Eide said pesticide testing for cannabis mirrors practices for other crops: “The other reason why, it wasn’t just cost that was a consideration, when we made the adjustments previously, and we went through this whole conversation about pesticide testing, during the quality assurance work group and the rules that came out of that. It was also rather consistent with how other pesticide enforcement is done for other consumable crops. So, apples, grapes, you know, hops, what have you, it’s very similar to how that current pesticide enforcement structure is set up with Department of Agriculture. …That’s the same risk that marijuana producers currently have, if they test above the action levels, unless they can remediate, which there are not a lot of ways to remediate, meaning, clean the pesticides off.”
  • Eide on lot sizes and testing expenses: “You know, the last go around of rule changes, is that the small farmers were saying, you know, you’re making changes here, and this is directly, it’s hurting me, it’s benefiting the larger producer/processors. The same thing is true with adjustments to lot sizes. If we double the lot size, like, many small producers, they don’t ever approach five pounds for their lot size. That’s just not how their harvest works. So, another thing we’re thinking about, is there another way for us to define how the sample- are deducted, so that it’s a little bit even spread, so it’s less of an impact on the smaller growers versus the larger growers,”
• Eide summarized changes to the originally drafted 2017 cannabis legislation rules which necessitated filing a supplemental CR 102 (transcript, audio).
  • “You’ll recall that we added a definition of lozenge for clarity’s sake. We removed volume discount language based upon the comments received and by request of the Board. We’ve also added some more information and some more clarifying information for true parties of interest based upon the petition we also received. That was part, we kind of said we were going to handle it in this rulemaking, so there’s some more information in there, more clarification on when like management and control will constitute, more generally constitute, a true party of interest relationship, even if there’s no profits, like percentage of the profits that are shared.”
  • Other changes include: a new WAC section on receivership, processing service agreements, and explicitly requiring monetary exchanges for extraction services and not payment in product.