WSLCB - Executive Management Team
(June 27, 2018)

Here are some observations from the Wednesday June 27th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team meeting.

My top 3 takeaways:

• WSLCB Enforcement Chief Justin Nordhorn and WSLCB Director of Licensing and Regulation Becky Smith presented a hidden ownership amnesty program proposal (transcript, audio).
  • The program is intended to provide a means for relatively innocent parties to approach the WSLCB to clarify true parties of interest under a lessened threat of license cancelation.  Discussion centered on the fact that adjudication of relative innocence is difficult and exposes the agency to litigation.
  • Board Member Ollie Garrett emphasized the Board’s expectation that not all parties practicing hidden ownership are relatively innocent: “…you’re saying the number one thing was to get them in compliance, and I was, the number one was, it’s intentional it’s going on. It wasn’t to get them in compliance. It was to get to the root of it, and to say these are bad players…”
  • Board Member Russ Hauge suggested an alternative compromise approach: “…something similar is when we got a backlog of traffic warrants. And you get the word out however you can, today’s the day, come in, and costs will be waived or interest will be waived on your back fines.”
  • The EMT achieved consensus in pushing back on the program as proposed.  Board Chair Jane Rushford asked Chief Nordhorn and Smith to return to EMT in about a month after further vetting the proposal.
• WSLCB Enforcement is encountering and seizing products outside the traceability system more frequently and in larger quantities (transcript, audio).
  • Chief Nordhorn said Enforcement visits to particular licensed Producers and Processors during the last few months have resulted in unusually large seizures of cannabis products that were not being tracked in the traceability system.
    • “…we took 2,500+ plants yesterday…1,200 clones…3,400 pre-rolled joints, 345 pounds of frozen product, and then almost 100 pounds of bulk flower. None of it tagged.”
    • “I mean we had one that was, I guess a month or so ago. There was two tons of product. You know, we just took it straight to the incinerator.”
  • It’s not clear to WSLCB Enforcement why particular licensees are not tracking products in the traceability system. Member Hauge expressed the Team’s consensus about policy in this circumstance: “…until it’s tagged, it should, it’s presumptively illegal, it’s presumptively going to be diverted. It’s presumptively contraband. That’s why we seize it, with clear conscience.”
  • WSLCB Director Rick Garza asked if emergency license suspensions should be considered, a tool that has not previously been utilized in the regulation of cannabis licensees.  Member Hauge suggested he work with Chief Nordhorn to investigate and to propose enhanced penalties.
• Director of Licensing and Regulation Becky Smith provided a licensing update (transcript, audio).
  • 14 retailers have been issued letters initiating the WSLCB’s new process of license forfeiture.
  • 17 of 52 eligible retailers in areas with bans or moratoria have applied for WSLCB’s new retail title certificate.