WSLCB - Executive Management Team
(December 4, 2019)

Here are some observations from the Wednesday December 4th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team public meeting.

My top 3 takeaways:

• Agency leadership heard a legislative update which confirmed WSLCB request bills remained in review and described efforts to coordinate vapor product legislation (audio - 17m).
  • Chris Thompson, WSLCB Director of Legislative Relations, last spoke to the Board about legislative matters on November 6th and November 19th.
    • The agency had two pending requests for legislation. The first would create a social equity program while the second addressed medical cannabis patients and small producers. The draft bills have been under consideration by staff in Governor Jay Inslee’s office since September 13th.
    • In addition, Thompson had reported the potential for a third legislative project emerging from the Governor’s office to permanently institute the ban on flavored vapor products and address vaping associated lung injuries. Board Chair Jane Rushford last publicly discussed the agency’s role in the vaping scare during the November 26th Special Board Meeting.
  • Thompson said that the “pre-filing” period for legislation ahead of the 2020 session had begun in earnest, and staff was “actively ramping up towards session which starts January 13th runs 60 days, and hopefully gets done on time.”
    • The legislature maintains a pre-filed bills page. At the time of publication, two bills mentioning “marijuana” in their title had been filed.
    • HB 2199 by Representative Brad Klippert: “Concerning marijuana use in guest rooms of hotels, motels, and inns in violation of the owner or operator's rules.”
    • SB 6033 by Senators Karen Keiser and Steve King: “Concerning the safety and security of retail marijuana outlets.”
      • This bill may be in response to a rash of premeditated robberies of 502 licensees in western Washington. The trend was highlighted in an investigative report by Politico titled “The Great Seattle Pot Heist” which caught the attention of the WSLCB.
      • More recently, a pair of robbers were filmed casing and breaking into tier 3 producer/processor Puffin Farm’s processing facility in Seattle. In an online forum, Puffin Farm CEO Jade Stefano described the theft as one of several by the same duo (edited): “On Nov 25th at 1:58 AM we were broken into in Seattle. The perpetrators had cased us earlier that night around midnight. Upon calling our neighbor a few blocks away, Firebros, they checked their camera and the same guys cased their place around 11:30 PM. They had decided our door was easier to bust and proceeded to break it down at 1:58AM. The police were dispatched by the alarm company and took over 2 hrs to arrive with a full swat team. Too much too late. Today I found out that the same guys broke into Freddy's Fuego in Kitsap County last. We can tell they are the same as they have the same body language and one guy is wearing distinctive red gloves in all videos from the 3 facilities…. They were driving a stolen white Dodge Avenger and were seen in a white pickup by Freddy's and Firebros…. They have cased and/or broken into 3 verified by video targets and in the last 8 days, they ... are out casing and robbing in the late evening early AM.”
  • Thompson indicated the Governor's supplemental budget was due by “statutory deadline” on December 20th with potential “placeholder items there relevant” for the WSLCB. Thompson reiterated that the agency’s request bills had “budgetary implications” and were still being evaluated by Governor Inslee’s “policy office and the budget office.” The extended approval/rejection process limits the time lawmakers have to consider sponsorship of request bills.
  • Thompson said the agency had been “asked by the governor’s office to take the lead on a part of implementation of the governor’s executive order [on vaping] related to legislation.” He said a potential third request bill from the agency was “under discussion” with Inslee’s office and the Department of Health (DOH). Thompson stressed it was “not resolved” which agency would submit prospective vapor request legislation and noted the possibility of “two pieces of legislation”: one for non-tetrahydrocannabinol (THC) vapor products and another addressing THC vapor products.
    • Director of Communications Brian Smith called attention to a Seattle Times article about the potential legislation in which Inslee’s Senior Policy Advisor Sheri Sawyer noted WSLCB would be granted “authority to seize illegal products, and allow the state health secretary to issue emergency bans on certain products or chemicals.” The article also reported that “Sawyer said the Liquor and Cannabis Board is working on a separate piece of legislation that will address regulation and flavoring in vapes that contain THC.” Thompson responded that Sawyer’s claim was news to him, but acknowledged she was better positioned to anticipate Inslee’s directives.
  • Turning to the Cannabis Potency Tax Work Group organized by the agency at the request of the legislature, Thompson acknowledged a final report had been delivered following review by the governor's office and the Office of Financial Management (OFM). He said the report, written by WSLCB staff, described the work group’s process, primary findings, and included revisions “guided by the work group.” Thompson articulated the “consensus conclusion” was the group “didn’t believe at this time shifting to a potency tax for cannabis is feasible, although there is some interest in getting more information on several topics that came out of the discussion on that subject.”
  • Rushford asked about request legislation from other agencies which might impact WSLCB’s work. Thompson replied that he hadn’t heard anything but speculated other agencies could also be awaiting approval from the governor’s office. He expected all agencies would learn the status of their request legislation in “one to two weeks.” Rushford hoped to coordinate legislative support between agencies on cannabis request bills.
  • Board Member Ollie Garrett said she’d raised the prospect of inviting Sawyer to the upcoming Cannabis Advisory Council (CAC) meeting on December 17th with Thompson, who added that some legislative staff had also voiced an interest in attending.
  • Thompson said he’d be meeting the following week with a "half a dozen or so" stakeholders “all on the alcohol side of the house” who had requested feedback from the agency on their legislative goals. Rushford asked for confirmation that Thompson’s meetings focused on alcohol bills and he replied that the agency had “not had a request from a cannabis stakeholder.” Garrett hoped pending cannabis bills would be discussed at the CAC meeting.
  • Garrett wanted to know about HB 1633, sponsored by Representative Keith Goehner, which she described as empowering local governments to have greater control of retail cannabis zoning. But HB 1633 bill deals with fuel taxing, not cannabis zoning. However, in a legislative update in late August, Goehner announced his intention to submit a bill allowing local governments to zone cannabis retailers in a manner more akin to the zoning of alcohol licenses. Thompson said there had been many bills involving the “local government role” in cannabis regulation though none had seen significant movement.
  • At the end of the meeting (audio - 1m), Thompson told the group that some legislative staff had requested an additional briefing on the traceability system and alcohol volume discounts which he planned to present the following week. Thompson also mentioned WSLCB’s participation in a House Commerce and Gaming (COG) Committee work session in November where agency staff presented on vapor regulations and emphasized WSLCB’s enforcement efforts for the flavor and vitamin E acetate bans (video).
• Deputy Director Megan Duffy offered new information on the cannabis traceability system’s latest contract extension and the WSLCB’s systems modernization project (audio - 3m).
  • Duffy said that the WSLCB’s contract with vendor MJ Freeway had received a “quick little extension of three weeks” to “finish negotiating some of the pieces that we haven’t completed negotiating yet.”
    • The last amendment went into effect on October 1st and extended the term of the contract until November 30th.
  • Duffy then said the Traceability 2.0 Work Group’s discussions about “the vision of traceability in the future” had become more important to her. She praised the “constructive, productive conversation” underway and noted the group would meet again on Monday December 9th.
  • Turning to the agency’s Systems Modernization Project (SMP), Duffy said WSLCB was taking a “phased approach” with licensing up first. She said the agency was putting together a Request For Qualifications and Quotation (RFQQ) for “state approved vendors who would be the integrators for the solution, the solution being Salesforce.” Duffy anticipated a vendor decision by February 1st, 2020 once staff had “foundational pieces in place.”
• Staff and the Board discussed media contacts, impending announcements pertaining to rulemaking, and other scheduling updates.
  • Director of Communications Brian Smith last discussed his department’s outreach efforts during the October 9th Executive Management Team meeting.
  • Smith explained that his staff fielded between three and four media requests per day, with recent inquiries mostly about vapor products. He said that he’d been working with Melissa Santos, a staff reporter for Crosscut, who was looking at the agency’s data regarding minority ownership of retail businesses. Smith then brought up a Spokesman-Review article by Kip Hill tying local cannabis zoning laws to a pattern of pushing cannabis retailers into the state’s poorer neighborhoods. Smith suggested that much of the Spokesman-Review’s recent cannabis coverage was happening through the newspaper’s Evercannabis special insert which he claimed was “not ‘news’ news” but rather cannabis industry public relations “run by the advertising department.” He reported that staff was spending significant time helping Spokesman reporters, “and then you find out it was the Evercannabis stuff.” He recommended that agency leadership consider content from Evercannabis with a grain of salt as they were not “hard news” (audio - 4m).
    • Smith's comments prompted a written response from Evercannabis and The Spokesman-Review about a "possible bias against us."
    • Melissa Santos' article, "Black pot entrepreneurs fight for piece of Washington's very white marijuana industry" was subsequently published in Crosscut in February.
  • Smith later mentioned the agency’s public hearings on packaging and labeling (PAL) and vapor products saying WSLCB would be communicating expected rule changes to licensees through email and traditional mail before the end of the month under the assumption that those rulemaking projects would not see significant rewrites between the proposed CR-102 and final CR-103 stages (audio - 2m).
  • Executive Assistant Dustin Dickson forecast a “board meeting abroad” following next year’s legislative session “possibly going to eastern or central Washington.” However, Rushford cautioned, “I’m not sure how productive those are” noting the cost and logistics of arranging the meetings. She said the sparsely attended Bothell meeting in August was primarily valuable due to a separate meeting with prevention stakeholders. Rushford suggested on-the-road meetings by the agency would only continue if they were “really meaningful” to stakeholders and the communities where WSLCB held them. Dickson noted the subsequent CAC meeting would also be scheduled after the legislative session (audio - 2m).
  • Special Assistant Gretchen Frost said that Director Rick Garza was attending a cannabis regulators roundtable in Maryland and was attending numerous “good sessions” (audio - 1m).
  • Board Member Russ Hauge informed the group he’d be making a presentation to the Tacoma-Pierce County Bar Association about cannabis policy on Saturday (audio - 1m).