WSLCB - Board Caucus
(January 15, 2019)

Here are some observations from the January 15th WSLCB Board Caucus.

My top 3 takeaways:

• Board Members reviewed their experiences during the agency trip to Spokane earlier this month.
  • Members were broadly complimentary of the facts and opinions shared with them at the board meeting in Spokane on January 9th. Board Chair Jane Rushford planned to send thanks to all staff who participated in events for the agency and solicit their feedback (audio – 7m).
  • Chair Rushford and agency Director Rick Garza toured licensee facilities, met with Spokane-area state Senator Mike Padden, and recorded a podcast. Rushford called a meeting with representatives of the prevention community “outstanding” and noted several of the group’s members attended the board meeting.
  • Board Member Russ Hauge met with cannabis researchers from Washington State University (WSU) and U.S. Attorney for the Eastern District of Washington Joe Harrington (audio – 10m).
    • Hauge believes the research at WSU is “fundamental stuff” but noted that federal roadblocks to research of cannabis generally would continue to complicate their efforts. He feels the state should invest more regardless.
    • Although not mentioned specifically, Cannabis Observer identified the Collaboration on Cannabis Policy, Research, and Outreach (CCPRO) at Washington State University.
    • Harrington encouraged WSLCB to inform his office about any emergency cancellations for “egregious” licensee violations in the eastern part of the state. “If there’s a bad actor who’s gaming the system why wouldn’t we want to tell the U.S. Attorney about it?” Hauge remarked.
  • Garrett toured a retailer and accredited lab Trace Analytics (audio – 6m). Lab staff expressed concerns to Garrett about Seattle retailer Uncle Ike’s cannabis testing program.
  • Initially raised by Hauge, the Board agreed constraints on cannabis research need not apply to the economic study of cannabis markets. Hauge wants the state to “match supply with demand” and believes the research required would be less expensive but inform how WSLCB assesses policy impact on the market.
  • After an initial suggestion to schedule one board meeting outside of Olympia every year, Board Member Ollie Garrett said she preferred two, one far enough to require overnight travel, and another close enough for staff and the Board to drive. The rest of the Board concurred and asked Executive Assistant Dustin Dickson to look at scheduling another away meeting all members could attend this summer. Board Member Russ Hauge suggested they target Vancouver.
  • Chair Rushford said she was launching a “Cannabis 2.0” discussion in early February with “internal staff” to ask, “What did we learn? Where’s the course correction apparent? And what are the highly desirable objectives or pursuits that will stabilize the industry and have us well positioned for the eventual national legalization.” Paul Dziedzic will facilitate subsequent discussion with the Board at the end of February.
  • See Cannabis Observer’s summary of the Board meeting in Spokane.
• A citizen-filed petition for rulemaking on overproduction of cannabis in Washington state was formally denied. However, it’s subject matter will be incorporated into an open rulemaking package (petition, audio – 7m).
  • The petition from Adam Smith asks WSLCB to revise WAC 314-55-075 as regards producer canopy. Hoffman said Smith’s petition asserted:
    • “Oversupply of cannabis is destroying the current industry driving down price making cannabis products quote ‘the cheapest intoxicant per serving in the state’ and starting to eat at tax revenue.”
    • “LCB was incorrect in allowing licensees to purchase additional licenses because this caused unproductive canopy space to go into production.”
    • “LCB has not taken action to reduce the canopy and supply of cannabis in Washington state.”
  • Hoffman explained that WSR 18-01-058, a CR-101 on “Cannabis Production and Canopy” was opened in early December and is broad enough in scope to cover the subject matter of Smith’s petition.
  • Hoffman cited RCW 34.05.330 to ensure the Board knew they could deny the petition and offer alternative action; in this case, inclusion with a different CR-101.
  • Hoffman explained the open rulemaking was waiting on a new BOTEC report and the canopy team’s report.
  • Calling it “a big issue” and “a very responsible petition,” Hauge said Smith should be informed they “were taking it seriously.” Hoffman assured the Board she’d let Smith know.
• Looking ahead, Hoffman told the Board two rulemaking packages were nearing the CR-102 stage but not yet ready: True Party of Interest (WSR 18-22-054) and Marijuana Signage (WSR 18-24-033). And the CR-103 regarding Vapor Product Rules (WSR 18-24-031) was being drafted.