WSLCB - Board Caucus
(April 23, 2019)

Here are some observations from the Tuesday April 23rd WSLCB Board Caucus.

My top 3 takeaways:

• Board Chair Jane Rushford described the kickoff meeting of the agency’s Cannabis 2.0 project (audio – 31m).
  • Rushford first publicly mentioned the Cannabis 2.0 project in late November.  Originally planned for launch in early February, the initiative was postponed until after the legislative session. Cannabis Observer has described our understanding of the Cannabis 2.0 project and advocated for inclusion of marketplace innovations and the future of cannabis supply chain transparency.
  • The project launched on Wednesday April 17th with a “robust discussion” among the Board, Executive Management Team (EMT), Agency Director Rick Garza, and division heads. Participants included Policy and Rules Coordinator Kathy Hoffman, Cannabis Examiner Manager Kendra Hodgson, Research Consultant Trecia Ehrlich, and Executive Assistant Dustin Dickson.
  • The group created a list of topics to explore:
    • Statewide vs. Local Responsibilities
    • Closed State System vs. Interstate Commerce
    • Evolution of Business Models
    • Distribution/Warehouse Models
    • Clarifying current and future roles and responsibilities for other state agencies
  • Multiple participants expressed a belief that Initiative 502 assigned too many responsibilities to WSLCB – and other state agencies had been reluctant to help.
    • Rushford said, “we became all things cannabis” and the agency crafted the “first generation” of rules with little help. “To get this right,” she continued, “we’ve got to have the engagement of all the right parts.”
    • Board Member Russ Hauge remembered hesitation in the early days of legal cannabis by agencies better equipped to offer services that could aid the new system. His summary of their attitudes as “we’re all scared, because it violates federal law” met with concurrence in the room.
    • Garza contrasted the deliberative implementation of Amendment 64 to Colorado’s Constitution as a framework which shared responsibilities between state agencies. He felt WSLCB was attempting to achieve this with Department of Ecology (DOE) on lab standards and the interagency agreement on testing with the Washington State Department of Agriculture (WSDA). He asserted that WSDA had resisted taking over regulation of processor kitchens, and that WSLCB had to “move our own dollars over” to the agency to get them more engaged with regulation of pesticides.
    • Garza mentioned The Stranger’s reporting on the lab accreditation bill, HB 2052, failed to acknowledge the WSLCB’s efforts to transfer responsibility to a more appropriate institution. He called it “ironic and amusing” but also “frustrating” that the agency was mischaracterized as “fired” from a responsibility they’d been laboring to have reassigned. The Stranger, Garza stated, had been “demeaning to us for five years, it’s not new.”
    • Director of Legislative Relations Chris Thompson felt he was often asked to testify before committees at the capitol on subjects within the jurisdiction of other agencies, local governments, and law enforcement. He observed “the stigma remains attached to this product” and bias “makes this an even higher hurdle.”
    • Board Member Ollie Garrett mentioned the governor of New York was proactively bringing state agencies together to craft the state’s cannabis program. Hauge said WSLCB had attempted that, but “there was nobody there” from other agencies during the crucial early stages of the system. Garza called it “the biggest lesson learned from our experience” that after five years other agencies were reluctant to engage in “holistic” cannabis policy making.
  • Rushford intended to build “commitment to a cannabis partnership” with government colleagues and stakeholders to explore the topics identified and “[galvanize] where we’re headed.”
    • Rushford acknowledged WSLCB lacked “corporate strength” to address all the things and felt partnerships would be crucial to the continued “integrity, and overall viability of our cannabis market and community.”
    • Rushford said staff were preparing a graphic depiction of the WSLCB’s core cannabis work and the additional fields of expertise expected of the agency. Garza compared the agency’s core tasks to the rescinded federal Cole Memo’s directives to combat youth access, criminal enterprises, and diversion. He asserted tasks outside of those directives “honestly, should not be in our wheelhouse.”
    • Garza generalized state actors as “reactive” to individual issues due to an absence of strategy between agencies.
  • Rushford concluded the next step for Cannabis 2.0 was to bring all relevant agencies together for a “structured, facilitated discussion” on the state’s position and how best to “create this more integrated approach to effective regulation and overall management.”
    • Rushford offered a tentative date of June 5th to convene state institutions, but expected discussions with agency directors would occur before then.
    • “Collaborative progress reports” were planned for EMT meetings to provide an opportunity for agency leadership to inform the discussion.
    • Rushford expected new or existing workgroups would be formed to help develop agency request legislation for 2020. Thompson confirmed the agency’s process for determining its legislative requests would begin in July and conclude in September.
    • Garrett called for a survey of cannabis bills that didn’t pass the 2019 session to see if there are items WSLCB can tackle within its current authorities. Thompson’s staff planned to compile a list of inactive bill subjects which would be shared with the Cannabis Advisory Council (CAC) to gather feedback for the agency’s legislative planning.
    • Rushford predicted a 12 month process to see the project through the 2020 legislative session.
• The Board and agency staff discussed creating a voluntary budtender training program (audio – 42m).
  • Director of Licensing and Regulation Becky Smith recently met with Garrett to discuss alternatives to the failed agency request legislation for mandatory budtender training, HB 1370. After attending a cannabis retail training session hosted by Spokane enforcement officers, Smith felt the curriculum could form the basis for a voluntary budtender training program across the state.
  • Garza stated that compliance with the prohibition of retail sales to minors in Spokane was the best “because of this program” (“around 96 to 98%”).
  • Enforcement Chief Justin Nordhorn explained the program had progressed beyond the initial Spokane pilot and was available in all enforcement regions. However, Nordhorn said enforcement preferred a required training program similar to Mandatory Alcohol Server Training (MAST) as it provided an administrative “accountability tool.”
  • Rushford asked if training participants received certification. Nordhorn explained the program did not require testing or confer certification but could document attendance without verifying attendee aptitude or retention. Hauge wondered if participation in the training program could be considered during the agency’s settlement process when weighing aggravated/mitigating factors.
  • In response to a suggestion that the training could be conducted by agency staff outside the enforcement division, Garza asserted, “It probably needs to be an [enforcement] officer” because officers were already enforcing the policies they were training budtenders on.
  • In addition to in-person training options, Nordhorn suggested posting training resources online, creating videos, and allowing participants to print a certificate of completion at the end. Smith suggested webinars.
  • Tempering the enthusiasm, Thompson reminded participants about the fiscal note the agency completed for HB 1370 which projected roughly $200,000 in costs for the first biennium. In light of constraints, Garrett asked what more could be done to make the training available to retail staff. Hauge replied that the agency could charge for the training, but Garrett questioned if the agency should charge participants for voluntary training.
  • Thompson also reminded leadership that current retail rules mandate employee training, but compliance is undefined. The agency hasn’t determined “how frequent is it, how accurate is it, how comprehensive is it? We just don’t know what retailers are doing to fulfill that current statutory requirement.”
  • Following up, Nordhorn promised to assess licensee utilization of the current budtender training program and consider how best to present content online.
  • Thompson assured the group the budtender permit legislation will be before the legislature next year. He said the agency could develop the bill further but noted the “[Washington Cannabusiness Association (WACA)] opposed the bill explicitly” which he regarded as a significant barrier to the bill’s advancement.
• The Board shared updates on upcoming meetings and conversations.
  • The Board revised the Cannabis Advisory Council meeting date. Initially scheduled for May 8th, Dickson planned to ask CAC members to choose between June 12th and July 17th.
  • Hauge said the WSLCB Tribal Advisory Council would meet the following day, April 24th (audio – 7m).
  • Hauge intended to follow up with Brian Moran, U.S. Attorney for the Western District of Washington, who reached out regarding the Muckleshoot Tribe’s cannabis drive-thru in Auburn.
  • Hauge planned to meet with Lara Kaminsky, Executive Director of the Cannabis Alliance, to mull over “how we can establish rules that would point the legislature at some limited on-site consumption opportunities for smaller growers.” Board members have become increasingly curious about allowing sampling or social use.
  • Hauge mentioned an article on the highest-paid CEO in Seattle being from a Canadian cannabis holding company. He cautioned, “There is a thunderous wave rolling in from the north.”