WSLCB - Board Caucus
(March 7, 2023)

Here are some observations from the Tuesday March 7th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 2 takeaways:

• Policy and Rules Manager Kathy Hoffman went over reasons she was considering asking the board to cancel the Cannabis Canopy rulemaking project in favor of releasing an interpretive statement.
  • The project was opened by the board in August 2022, after Director Rick Garza acknowledged reports of possible inconsistencies in a cannabis canopy measurement protocol released in November 2021, specifically regarding pathways and walkways around plants. When it was opened, Policy and Rules Coordinator Jeff Kildahl anticipated “significant” outreach for the effort to “update and modernize rule language” on canopy.
    • A producer-specific document, Measuring Plant Canopy For Washington State Cannabis Producers, was published in April 2022 after some licensees began complaining to agency staff.
    • Agency staff also broadcast an announcement titled “Pathways in Canopy Measurement” which declared they were “pausing enforcement of that protocol” in June.
  • During the caucus, Hoffman aimed “to bring you up to date on on where we are in terms of rule development with…cannabis plant canopy, and then provide an area of time for us to discuss…the pathway forward” on the topic (audio - 8m, video - WSLCB, video - TVW).
    • Hoffman noted the history around publication of the measurement protocol “designed to support statewide consistency and understanding of both rules that pertain to plant canopy in our rule set,” WACs 314-55-010 (31) and 314-55-075. She acknowledged that concerns had been “raised by licensees and stakeholders about the protocol specifically as it related to pathways between rows of plants and the overall canopy measurement.” After “multiple discussions about this, the possibility of rule development emerged as an approach to addressing those concerns,” said Hoffman, along with pausing some canopy enforcement.
    • Once the rulemaking project had been started, Hoffman stated WSLCB representatives hosted two world café events to solicit input on cannabis canopy protocols in October and November 2022 at which they asked groups of stakeholders to “answer some specific questions” like the best definition for plant canopy.
    • “But the bottom line was that we didn't hear any significant request from our licensees to change any rules at this time,” she told the board, with the exception of “requests to do away with the tier system; maybe move to more of a plant count model.” Instead, what was made clear was that stakeholders wanted regulators to “just enforce the rules consistently.”
    • Hoffman and her staff analyzed possible actions that would further the consistency in application of canopy rules, and found “two options moving forward.”
      • “Potentially continue rulemaking and just make one minor technical change [to WAC 314-55-075] and allow licenses another opportunity to provide us with proposal language….but because we didn't hear anything from licensees that was really a strong urge to change those rules, I [doubt] that's really the pathway forward. It will just delay enforcement of canopy measurement for another year” were the rulemaking project extended, adopted, and implemented.
      • “Draft an interpretive statement. We've done this before…when we were working with the delta-8[-tetrahydrocannabinol] concerns and we were clarifying what it meant to manufacture” through an interpretive statement on “what…producing cannabis meant in our space. So, this interpretive statement could arguably do the same thing and provide a really concise interpretation of what canopy means in our licensed system and how we interpret the application of 314-55-075…specifically (6) and that has to do with the differentiation between the tiers. This interpretive statement could…work alongside the existing enforcement protocol. I can't speak to whether or not that protocol might need to be adjusted in some way, but I think these two documents could work in unison.” 
    • Canopy enforcement would be paused while an interpretive statement was drafted, which was expected “about April 7th,” noted Hoffman. After that time she remarked that staff would be “enforcing canopy [measurement] as it is written in rule.” This would facilitate better communication between WSLCB Enforcement and Compliance staff and licensed producers, Hoffman argued, in addition to “provid[ing] an additional supportive pathway for a reprioritization of canopy enforcement that can be implemented rather expeditiously” in “about a month.” For these reasons, staff favored the second option, as the other option “doesn't really seem to offer any benefit other than prolonging the rulemaking process.” Hoffman intended to “discuss that with you now.”

• Members raised questions around stakeholder participation, confusion around the term ‘canopy,’ licensed producers’ potential disappointment with the board’s interpretation, and what impact inconsistencies had on prior canopy reporting.
  • Board Member Jim Vollendroff had been aware there were “some earlier concerns” raised about canopy aside from consistency and asked “do we hear anything from other people who maybe didn't participate in these conversations at all?” (audio - 2m, video - WSLCB, video - TVW)
    • Hoffman replied that at the world cafés there had been representatives for several cannabis trade associations and businesses, but also “people who are not attached to those organizations who participated in these sessions, so they were very well attended.” She illustrated by saying there had been “folks who were thinking about applying to the social equity program who also participated in these conversations” simply to “get an idea of what it was like to interact with the agency.”
  • Vellendroff then asked Hoffman to explain their definition of canopy, sharing his personal idea that the term signified “space in which a tree spreads,” even though “that's not what we're talking about here” (audio - 10m, video - WSLCB, video - TVW).
    • Hoffman offered to share some examples based on photographs of licensed production premises from staff, but talked about distinctions like indoor or outdoor grows, “pathways between them and how they shift.” She quoted WAC 314-55-010(31) for the definition of plant canopy: “square footage dedicated to live plant production, such as maintaining mother plants, propagating plants from seed to plant tissue, clones, vegetative or flowering area. Plant canopy does not include areas such as space used for the storage of fertilizers, pesticides, or other products, quarantine, office space, etc.”
    • Comparing cannabis production tiers to “sandboxes” in which licensees could “put however many plants [they] want to put in that sandbox and move them around however [they] wish,” she communicated canopy measurement to be judging the “square footage around it…the perimeter of the canopy.” Hoffman noted that in 2019, lawmakers in Maine changed their measurement standards for cannabis, having chosen “to go to a plant canopy model for the recreational product” while their medical market continued to use plant count. She’d found that Vermont had adopted the Washington rule definition for plant canopy in statute.
    • As board members continued discussing whether the term ‘canopy’ or the practice of including walkways and pathways was part of canopy, Board Chair David Postman laid out a discrepancy in enforcement that had led to their current review: “For a long time, canopy…was enforced in a way that included pathways as part of the canopy measurement, which meant…you could have less plants than you could have otherwise. There were some that were being enforced in a different way, education/enforcement learned this [and] rightfully said ‘no, we need a consistent enforcement statewide of this,’ which meant some people, some growers who had pathways that weren't counted as part of their calculation suddenly were, and that's what started this.”Postman added that “we're saying things like storing pesticide does not count as part of your production area, but just about everything else is.” Hoffman spoke up to clarify there’d been only “one area of enforcement in the state that was not interpreting plant canopy the same way everyone else in the state was.”
    • Postman predicted plant canopy would be conducted more consistently “because it's one of the really important tools we have in our regulatory scheme to make sure there's not diversion, or leakage, or anything else.” Hoffman recognized that while each producer was different, canopy measurements meant it was “up to the individual producer how they wish to organize that space and the methods that…are going to work the best for them.” She felt that “defining, or at least giving an overview of what production means when we say ‘production’ is going to be very helpful in this interpretive statement.”
  • Garza observed that cannabis canopy had “been a complex, difficult issue for a little while, and I just think [Hoffman had done] a really nice job, with staff, of bringing a proposal forward.” Hoffman relayed that the U.S. Food and Drug Administration (FDA) used the term ‘production,’ “when referring to growing agricultural commodities…we could draw from…some of the knowledge there to informally interpret production in our interpretive statement” (audio - 4m, video - WSLCB, video - TVW).
    • Vollendroff was grateful for the explanation and Postman realized that many people calling for consistency on the topic wanted a result “consistent in the way [they] prefer it to be.” He hoped stakeholders that found the “move to consistency inconsistent to how the practice has been” would have some understanding of the difficult choice agency officials faced.
    • Postman further mentioned a renewed push for education on their statement and measurement protocols would be warranted. Hoffman responded that there was already “crafted messaging that we'd like to share with stakeholders as soon as reasonably possible.”
  • Board Member Ollie Garrett brought up the former canopy reports conducted by the WSLCB Cannabis Examiner team that had included a statewide measurement of canopy, asking when the breakdown in enforcement consistency occurred in relation to producing those documents (audio - 6m, video - WSLCB, video - TVW).
    • Hoffman commented that “there were some recommendations made in the first report in March of 2019 that may have been interpreted by licensees as the way that the agency was going to go,” but “the agency didn't.” The June 2020 follow up report concluded “that a uniform understanding of cannabis plant canopy measure was yet to be achieved.” She quoted the report as finding “further describing canopy measurement with a list of best practices designed to support compliance through agency initiated clarifying guidance, or interpretive statement, may assist both the agency and industry in navigating the complexities and nuances of plant canopy.”
    • Postman said he’d had similar concerns, but that their approach was the  “simplest, and I believe easiest to consistently apply statewide. It also works for inside grow, outside grow,” or tier sizing.