WSLCB - Listen and Learn Forum - Cannabis Penalties
(September 26, 2019)

Here are some observations from the Thursday September 26th Washington State Liquor and Cannabis Board (WSLCB) Listen and Learn Forum on the Cannabis Penalties rulemaking project.

My top 3 takeaways:

• Cannabis Policy and Rules Coordinator Kathy Hoffman explained the goals of the listen and learn forum and recognized work group participants before those attending the session introduced themselves (audio – 6m).
  • Initially filed as a CR-101 in October 2018, the Cannabis Penalties rulemaking project aimed to provide “guidance on when to escalate a [traceability] violation which may be viewed as aggravated.” The following spring, the rulemaking project was repurposed to encompass revision of agency enforcement practices and licensee violations in SB 5318. The conceptual draft rules evolved over several months of work group meetings both within the agency and between WSLCB and cannabis trade group representatives. The conceptual draft rules were released to stakeholders on August 29th after a brief delay. WSLCB sent out notice of the listen and learn forum on September 13th.
  • Hoffman’s webinar presentation outlined the goals for the session, primarily ”To engage with our industry partners, licensed community and others to review draft conceptual rules related to marijuana penalty rule redesign consistent with ESSB 5318.” 
    • Hoffman described the meeting format and encouraged participants to sign up to comment on each section of the draft to describe “what you like, what you don’t like, and any suggested revisions that you have for that particular section of rule.” Staff would tabulate, organize, and share comments received during the session with stakeholders and the agency. 
    • Hoffman indicated WSLCB’s proposed rules webpage was in the process of being updated and would eventually include comment summaries from listen and learn sessions hosted by the agency.
    • The event followed a previously established listen and learn format.
  • Hoffman recognized the efforts of several members of the external work group, some present and others absent, who had helped the agency since March:
    • Brooke Davies, Washington CannaBusiness Association (WACA) Deputy Director
    • Lara Kaminsky, The Cannabis Alliance Executive Director
    • Chris Masse, Miller, Graham, Nash and Dunn Partner
    • Mitzi Vaughn, The Cannabis Alliance Pro Bono General Counsel
  • Recognized, but not at the session:
    • Jeff Anderson, Evergreen Market Co-Founder
    • Vicki Christophersen, WACA Executive Director and Lobbyist
    • Crystal Oliver, Executive Director of the Washington SunGrowers Industry Association (WSIA)
  • Forum participants included (audio – 2m):
    • Virginia Hoyer, BMF Washington Quality Assurance (QA) Coordinator
    • Lukas Hunter, Harmony Farms Director of Compliance
    • Micah Sherman, Raven (grass) Owner
  • Other participants from the WSLCB and the Washington State Office of the Attorney General (OAG):
    • Kathy Hoffman, Cannabis Policy and Rules Coordinator. Meeting Facilitator.
    • Matthew Harper, Marijuana Examiner
    • Victoria Owen, Policy and Rules Assistant
    • Amy Sharar, Communications Consultant
    • Bruce Turcott, Assistant Attorney General and WSLCB Counsel
• Forum attendees and online participants offered no comments on most of the proposed changes, but questions were raised about violation deferrals and how enforcement officers would implement voluntary compliance in practice.
  • Hoffman reminded participants that the CR-101 step was an “inquiry” and the rules were “conceptual draft[s]” which could be changed (audio – 1m).
  • Three of the five proposed areas of changes received no comments and nothing but support from the external work group members present who had helped draft the revised rules.
    • WAC 314-55-502 – Notice of Corrections (pages 1 and 2, new section)
    • WAC 314-55-506 – Summary License Suspension (pages 10 and 11, current rule)
    • WAC 314-55-507 – Petition for Stay (pages 11 through 14, current rule)
  • In WAC 314-55-505 covering Administrative Violation Notices (AVNs, pages 2 through 5, current rule), Hunter felt the changes had the “spirit” of SB 5318 but had reservations regarding subsection (b) describing when WSLCB “may issue an administrative violation notice without issuing a notice of correction.” SB 5318 established a “two-year window” limiting consideration of many past violations, and Hunter argued this wasn’t adequately reflected in subsection (b). His example was traceability violations which were a “wide umbrella” and could be issued for many reasons. He suggested the rule distinguish between notices a licensee could receive for the exact same offense versus new problems within the violation type (audio – 5m).
    • Hoffman and Kaminsky clarified that the draft penalty matrix “bifurcated” out traceability violations to allow “less subjectivity” in the issuance of AVNs. Vaughn added that the work group intended different offenses within a violation type not cause an AVN without possibility for correction, but the conceptual draft might not be clear on that as written. Hoffman confirmed the penalty grids had been redone and “when we plug them back in” the subsection might warrant further clarification.
    • Hunter also noted that subsection (d)(v) referenced WAC 314-55-505(e), but that rule didn’t exist. Hoffman committed to correcting it.
  • In WAC 314-55-5055 (pages 5 through 10, new section) covering Resolution Options, Hunter offered a suggestion for subsections (3)(c) and (3)(d) addressing deferring violations. As written, the conceptual draft language would bar deferrals for any business with “issued” notices, even if the notice was being adjudicated (audio – 3m).
  • Due to sparse feedback, Hoffman considered discussing the conceptual draft penalty matrixes on pages 14 through 25, however she felt the agency had not given sufficient notice to stakeholders that those topics would be heard. She wanted to “broadcast that we’re doing that more widely” before requesting feedback.
  • Opening up the session to questions which hadn’t been addressed, Hoyer inquired about WAC 314-55-502 on corrective inspections and how the agency would “roll that out” (audio – 6m).
    • Vaughn said she had “helped draft the form” with enforcement staff. She described it as “like a typical inspection but the form is different and it’s called a ‘Notice of Correction’ and the result is different at the bottom.” Officers “point out what they find and then cite” whatever rule was being violated, then specify a timeframe to correct the issue which could be extended. The only exception, Vaugn said, was “if they come in because you asked them to come in [on a consultation], then they’re only looking at the specific thing that you request.”
    • Vaughn said that her understanding from the division was that Enforcement didn’t believe officers could give comprehensive “audits upon request” like the Department of Labor and Industries (L&I) offered some businesses under their purview. Hoyer and Hoffman agreed that some of the concerns raised might be more applicable to the Voluntary Compliance Program being developed as a separate rulemaking project.
    • SB 5318 initiated rulemaking for creation of a Voluntary Compliance Program whereby enforcement officers advise licensees how to achieve rule compliance at visits which were “not subject to inspection pursuant to chapter 42.56 RCW.” Hoffman previously reported the rule had drawn minimal public response at the September 18th Board Meeting and reminded participants that the bill required WSLCB “to work with marijuana licensees and their employees to develop” the compliance program.
• Hoffman offered a rough timeline for the rulemaking project including a second listen and learn session covering penalty grids and eventual adoption (audio – 1m).
  • Although the agency had gathered “very few comments,” Hoffman indicated staff would organize feedback into a document for distribution soon. 
  • Hoffman expected the second listen and learn session covering penalty grids would be scheduled for the “end of October.” After considering all the comments received to that point, she anticipated a CR-102 followed by permanent rule adoption in January 2020.