WSLCB - Board Caucus
(November 19, 2019)

Here are some observations from the Tuesday November 19th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Board Member Russ Hauge and policy staff had begun considering a “better vehicle” to convene with sovereign Indian Tribes than the agency’s Tribal Advisory Council (audio - 10m).
  • The Tribal Advisory Council (TAC) was formed during the privatization of spirits sales in the 2011-2012 timeframe. Following privatization, meetings of the group were suspended until reconstitution earlier this year. The most recent TAC meeting was on April 24th and Hauge reported on the search for a TAC co-chair in September.
    • In 2015, HB 2000 authorized the governor to enter into agreements concerning marijuana with federally recognized Indian Tribes located in Washington State (RCW 43.06.490). Governor Jay Inslee subsequently “delegated the negotiation authority for these compacts to the Washington State Liquor and Cannabis Board.”
    • To date, WSLCB has entered into twelve tribal compacts, most recently with the Quinault Indian Nation.
  • In conversation with Director of Legislative Relations Chris Thompson and Policy Analyst and Tribal Liaison Brett Cain, Hauge had begun to feel that the TAC “was not the appropriate vehicle to interface with our tribal partners.”
    • He said a “consultation policy” between individual tribes and agency representatives was “working, the list of contacts and people who are engaged from the tribal community is long.” Hauge called this process a “better vehicle for us to engage” with the sovereign nations “rather than an advisory council where we call a meeting once in a while” and the entire WSLCB board served as TAC members. “We got really mixed reviews after the last [TAC meeting],” he added, saying that while some tribal representatives appreciated getting “a look at our process” others communicated that the gathering was “superfluous” and “doesn’t really apply to them.” The consultation policy had the agency “focusing on the tribe” in Hauge’s estimation. If WSLCB were to “keep track of our issues and just set up a general consultation 2-3 times a year, like we do with the [Alcohol and Cannabis] advisory councils, that would be a better vehicle.”
    • Board Member Ollie Garrett was supportive and shared her recollection of the April TAC meeting where “you could tell it wasn’t productive as probably something, smaller-type setting would be.” Hauge deemed the April meeting “productive” due to the new contacts and relationships that resulted, but reiterated it “wasn’t the right vehicle.”
    • Board Chair Jane Rushford told her colleagues she “liked the approach” but wanted to know if Hauge had run the idea past any elected leaders from the tribal governments. He said the policy was “not fully baked” outside of the agency and assured Rushford there’d be outreach. Hauge commended Cain for doing a “really good job developing those lines of communication.”
    • Rushford noted the agency had considered TAC meetings with “smaller scale, but having a co-chair.” Hauge said a consultation policy “would obviate the need for a co-chair” and “a full, formal meeting” that required the presence of all board members and supporting agency staff.
  • Hauge reiterated that “we have not vetted it yet with any elected tribal officials” but it had been an “active discussion with attorneys for the various tribes” with whom the idea had initially emerged. He described the counsel for tribes being the “pathway of communication [which] is the most fruitful for us” and helpful in determining “who could represent in the interest of the various tribes” as issues arose from either the tribes or the Board. Informal consultations also permitted something to be “put together really quickly.”
  • Rushford supported the consultation policy and insisted it need not eliminate the possibility of a more formal gathering with the full Board should that be desirable. Most of the tribal issues she was aware of were either “unique to a tribe or they are in a state of development that, that would benefit from the consultation approach.” Hauge concurred that consultations were “flexible enough that we’ll be able to run it both ways.” He said he was uncertain if the agency would ever “make a pronouncement: this is what we’re doing” but instead just move forward building consultation agendas with tribes that want to engage. Should WSLCB “need input from a particular tribe, we invite them specifically.”
  • Hauge emphasized difficulties identifying a tribal co-chair for TAC, as “the tribal officials who would be interested are already spread really thin. They’ve got a lot of business to do and, you know, quite frankly there isn’t a lot of stuff that’s continuing” to require their attention. Hauge said that WSLCB’s on-going policymaking was “small potatoes to a tribal government, this little part of their operation.”
• The Board prepared for the following week’s public hearing on proposed rules for vapor products.
  • Hoffman’s last rulemaking update and forecast was at the November 13th Board Meeting.
  • Vapor Products (WSR 19-13-036, audio - 3m). Hoffman said the Tuesday November 26th special board meeting would include a public hearing for proposed vapor product rules which would place new restrictions and taxes on vapor products to implement HB 1874 and HB 1074.
    • Hoffman said the three written comments received so far tended to focus on the emergency rules the State Board of Health (SBOH) and WSLCB had enacted rather than proposed changes to WAC 314-35. The Vapor Products rulemaking project preceded and was not directly related to the State’s emergency bans on flavored vapor products and vitamin E acetate. Hoffman told board members she’d offered explanations to those commenters on the different “frameworks at play.”
      • One byproduct of the Department of Health (DOH) claiming new authorities over vapor products was confusion over which agency was drafting, defining, and interpreting rules which WSLCB licensees were subject to. Governor Inslee’s executive order required WSLCB and DOH to work together creating and enforcing vapor product rules in an unprecedented fashion. Several legislative committees will learn more about this arrangement in a series of work sessions happening this week to prepare lawmakers for consideration of more permanent statutory changes affecting vapor product industries.
    • Hoffman noted that the only “substantive” comment pertained to “reducing a requirement” around invoicing which she said staff would consider.
    • Hoffman anticipated asking the Board to adopt finalized rules as a CR-103 at the December 11th or 18th board meetings “because we need to have those done by the end of the year.”
  • Hauge said he’d been contacted by David Heldreth, Chief Science Officer at True Terpenes, about the agency’s interpretation that the SBOH flavor ban applied to non-cannabis botanical terpenes.
    • Hauge reported telling Heldreth that WSLCB was “following the Department of Health’s lead and that we’re---in this situation---not going to be as flexible as we might if public safety wasn’t directly implicated.” Heldreth had been in communication with DOH, and Hauge characterized their response as “well, we don’t have any concern, [WSLCB] can do whatever they want.” Hauge said he was “comfortable where we are” and expected communication between the two state agencies wouldn’t be “seamless.”
    • Hoffman noted the SBOH ban on vitamin E acetate in vapor products passed the previous day and acknowledged “a significant amount of material” Heldreth had shared with the SBOH via email on November 12th and November 13th:
      • True Terpenes - True Grade Compliance Packet
      • “Position Statement on Defining and Distinguishing Flavor Compounds and Terpenes”
    • Heldreth testified at the SBOH board meeting on October 9th (audio - 2m, video) as well as the WSLCB’s special board meeting on October 23rd (audio – 3m, video).
  • Cannabis Penalties (WSR 18-22-099) and Packaging and Labeling (PAL, WSR 19-12-029, audio - 3m). Hoffman said staff hadn’t received any comments on the proposed penalty changes and “minimal” feedback on drafted PAL rules. PAL was on track for a December 11th public hearing with the CR-103 slated to be presented on December 18th.
  • Hauge mentioned a meeting later in the week on True Party of Interest rules (TPI, WSR 18-22-054) which Executive Assistant Dustin Dickson called “an Enforcement meeting.” Hoffman said she hadn’t been invited which surprised Hauge who asked that she be included. “I can’t imagine why we would want to be talking about pending rules and penalties without our rulemaking supervisor,” Hauge added.
• Board Chair Jane Rushford discussed a revised path for the agency’s Cannabis 2.0 project that pushed coordination of multiple agencies’ cannabis efforts beyond the 2020 legislative session (audio - 1m).
  • In September, WSLCB discussed plans for an initial public meeting on the interagency effort to cooperate on a next generation of cannabis policy, dubbed Cannabis 2.0 (C2.0). During the November 6th executive management team (EMT) meeting, Rushford confirmed that the C2.0 public meeting would be pushed back in favor of “one-on-one” meetings between herself and the leaders of other agencies.
  • Rushford stated that she wanted to “walk through the step I hoped to take with Cannabis 2.0 this fall which was to bring back together the agencies that had met back in the early summer.” The meeting would have focused on the various agencies’ cannabis agendas for the 2020 legislative session but “the agency request bills have not been fully, entirely- they haven’t gone through the entire process with the [governor’s] office and so they’re not fully approved.” Saying that Thompson remained “fully engaged” with the other participating agencies “on a more one-off basis,” Rushford advocated “touching base” with the other government departments so “that we know where we can intersect prior to or during session.”
    • Thompson noted the hold up on gubernatorial approval of the agency’s request legislation on a social equity program and medical patients/small producers at the November 6th EMT meeting. The delay limits the agency’s ability to approach legislators to sponsor the potential bills ahead of the “pre-filing” period and running until the legislative session starts on January 13th, 2020.
  • Rushford forecast the next C2.0 meeting “in the spring after session.”