WSLCB - Board Caucus
(October 1, 2019)

Here are some observations from the Tuesday October 1st Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Board Chair Jane Rushford prepared to adopt a CR-102 detailing draft vapor product rules to implement existing legislation which, once fully implemented and effective, could impact the agency’s capacity to respond to an Executive Order on vaping signed by the governor on September 27th (audio - 4m).
  • The health effects of vapor products became a concern for the Board in September after hundreds of vapor-related pulmonary illnesses began to be documented nationwide. WSLCB staff have since reviewed how they’d handle their state and/or federal responsibilities pertaining to the products and seemed to indicate a willingness to implement new regulations through the vapor product rulemaking process already underway. Garza forecast Inslee’s executive action on September 24th.
  • On Friday September 27th, the state dramatically escalated its response to the “vaping use public health crisis” with the signing of Executive Order 19-03 by Governor Jay Inslee at a press conference attended by WSLCB Director Rick Garza along with legislative and public health officials. Later that day, the WSLCB sent an announcement about the order and suggested voluntary steps licensees could take immediately.
    • Learn more about the press conference from Cannabis Observer’s Week Ahead Update. See the WSLCB’s vapor products page and the Department of Health (DOH) site tracking Vaping Associated Lung Injury.
  • WSLCB Cannabis Policy and Rules Coordinator Kathy Hoffman explained the CR-102 for the Vapor Product rulemaking project (WSR 19-13-036) would be presented for adoption by the Board at the following day’s board meeting. She said the rulemaking project, which began January 9th and was revised to implement HB 1874 and HB 1074 in May, would not include the agency’s full response to the new Executive Order even though the order “happened around the same time that we were getting ready” to propose the CR-102.
  • Hoffman said staff had been “almost to our last internal meeting on the vapor product rules when this outbreak occurred” and that the situation heightened the “momentum of getting these [rules] through.”
  • Hoffman promised to convey a “very clear distinction” that the Board was acting upon rules for “the nicotine and non-nicotine products that do not contain [tetrahydrocannabinol] THC” (see RCW 70.345.010(19) effective October 1st). She intended to stress “what these rules apply to and what they don’t apply to.” They would “implement statute” and didn’t represent the agency “trying to interpret” the latest Executive action.
  • Rushford acknowledged the rulemaking project was “somewhat outside” the agency’s mandate to act just signed by the governor but claimed “it reflects on all of that.” She said the public would “feel more competent and confident when all agencies involved have been able to address” the health scare. 
  • Hoffman elaborated that the new rules in the CR-102 would extend WSLCB’s vapor product seizure authority and “reframes how forfeiture happens.” However, she described the agency’s current authority as “extremely limited” and restricted only to vapor licenses. WSLCB had no product testing authority and limited labeling authority for vapor products. Hoffman added that the agency’s power also “hinges largely on what the [U.S. Food and Drug Administration] FDA was purportedly going to move forward with in 2016,” but that WSLCB hadn’t “seen activity until recently on that.”
    • Find out more about the FDA’s page on Lung Illnesses Associated with Use of Vaping Products.
  • The notice for the proposed rules states, in part, that RCW 70.345.160(5) “provides that if the Secretary of Health or local health jurisdiction determines that a product may be injurious to human health, or poses a significant risk that the Board, in consultation with the Department of Health and others, may cause a vapor product to be analyzed. Thus, while the Board’s regulatory authority is currently limited with respect to vapor products, the extent of Board’s authority with respect to licensing and enforcement is reflected in this rule proposal.”
  • The rule would institute several definitions including one for “control” which Hoffman had been working to define as part of the true party of interest rulemaking project.
  • The rulemaking project would also create numerous new chapters in WAC 314-35 covering issues like vapor licensee insurance, recordkeeping, adjudication rights, transportation, and penalty structures.
• Cannabis Policy and Rules Coordinator Kathy Hoffman announced her intention to “withdraw and update” a CR-101 on canopy to incorporate adjustments to Tier 1 producer rights (audio - 2m).
  • The Cannabis Production and Canopy rulemaking project (WSR 18-01-058) began at the end of 2017. In January, Hoffman revised it to include elements of a denied citizen petition regarding overproduction of cannabis before placing the rule “on hold” in April.
  • Hoffman said she would like to formally “withdraw and update” the rule because Washington’s “market has changed a bit since 2017 and we’d like to introduce a CR-101 that’s more responsive to the current market and considering whether or not we would allow Tier 1 producers to incrementally increase canopy capacity assuming that they’re operating at a certain percentage of capacity.” 
    • Increased capacity for some growers was reexamined by the Board after the closing of a prominent Tier 1 licensee in May. The Board discussed canopy adjustments as one method to assist struggling small producers on August 27th. In a media interview the same week, Director Garza hinted at canopy square footage increases for Tier 1 producers.
  • Rushford was supportive of staff bringing forward a “new concept,” calling the current rulemaking language “stale.” Hoffman said staff planned to “freshen it up” and promised to “move [a new CR-101] forward in a few weeks.”
• The agency planned to host a listen and learn forum on the Packaging and Labeling rulemaking project the following week (audio - 1m).
  • The last update on the Packaging and Labeling (PAL) rulemaking project (WSR 19-12-029) was on September 18th. The agency announced the PAL listen and learn forum on September 26th.
  • Hoffman stated that the listen and learn forum was scheduled from 9AM to 4PM on October 11th “to have as much time as possible to review those rules.” She had yet to receive critical feedback on the 38 pages of PAL draft conceptual rules though she reported she had gotten “positive comments” from stakeholders.