WSLCB - Board Caucus
(April 18, 2023)

Here are some observations from the Tuesday April 18th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Director of Enforcement and Education Chandra Wax led a staff update on environmental pesticide actions by WSLCB, highlighting new test results and stakeholder meetings she’d convened the preceding week and evoking several questions from board members.
  • Board Chair David Postman noted there had been an “emergency issue on chemical testing in north central Washington” which resulted in a “series of meetings” called by WSLCB on Friday April 14th. That morning, WSLCB staff received “some tests back” looking for dichlorodiphenyldichloroethylene (DDE) above 0.1 parts per million (ppm)---the default action level in rule for pesticides without specific action levels—which Wax would speak to along with "related things" (audio - 1m, video - WSLCB, video - TVW).
    • Staff last discussed the situation during the April 12th executive management team (EMT) meeting.
  • The presentation by Wax started with an acknowledgement that staff had received several cannabis product test results above 0.1ppm from the Washington State Department of Agriculture (WSDA) “for DDE in the [City of] Brewster area. It's a five-mile region, and we've identified that location.” They’d placed administrative holds on five producer/processor businesses in the area, she told the board, “so that we could do further testing. Our Enforcement and Education staff tested over a hundred on-shelf products in retail locations, and we went out with [Washington State Department of Ecology staff] and tested the soil, water, and product at the 18 license[d] location[s] in that five mile area so that we can get more information” (audio - 2m, video - WSLCB, video - TVW).
    • Test results her division had received to that point had been for cannabis products, Wax relayed, “and they've been at two to three times that 0.1[ppm] action limit for DDE.” She continued, “we have not yet received any other test results back but we are, we did request and receive an expedited timeline agreement from” WSDA personnel, meaning she “expect[ed] some of those tests to start coming…in the next five to seven days.”
    • Wax explained staff had been “working to identify the pathway” for impacted licensees “for compliance, and getting non-contaminated products into the marketplace.” This would include guidance “letting people know exactly what we'll need to see to move forward to lift holds.”
    • “I've been meeting weekly with…executive staff at our partner agencies to make sure that we continue to be working together towards the best solution to this,” Wax remarked. She then noted that meetings had been held on April 14th with accredited cannabis labs, affected licensees, cannabis trade associations, and interested legislators.
      • Director of Legislative Relations Marc Webster briefly spoke to the legislative meeting where he and other officials “briefed dozens of members on Friday” and heard many “ways to help the impacted farmers” like “budget provisos,” “recommendations to you as the board,” or further study of the issue (audio - 1m, video - WSLCB, video - TVW).
      • Following those meetings, WSLCB Communications staff broadcast a follow up “Update on Pesticide Contamination” publicly declaring many of the things shared privately with stakeholder groups, and claiming that before the April 12th “Board meeting, LCB staff concluded that existing rules suffice to address products containing unapproved pesticides. Emergency rules are not necessary at this time.”
        • This framing differs from Postman’s comments in the April 12th meeting where drafted emergency rules were tabled by the board after he said the matter “needs another look by all of us, as well as key staff.” He asserted stakeholder meetings would help agency leaders “before we make this decision.”
    • Wax assured the board she would continue “working closely with Communications to make sure what we're putting out is appropriate and reasonable and then of course continuing to work on investigations and partner with folks as we look at potential solutions.”
  • With mandatory pesticide testing for cannabis only a year old in Washington after being adopted in rule in March 2022, Board Member Ollie Garrett asked how the level in rule of 0.1ppm compared with other states’ cannabis testing standards, and in the meetings with industry members she wondered if DDE “might have been out there all along, and we're just detecting…it, or is it new that this occurred?” (audio - 3m, video - WSLCB, video - TVW)
    • Wax described some history of how the action level had been determined “six to seven years ago” before she worked at WSLCB, but she knew there was an “intentional deliberate process that the agency went through” to enact WAC 314-55-108 in 2017 inclusive of “consulting experts, relying on our partners at Ag[riculture], and looking at what other states [were] doing.” Having looked into some DDE levels in other states, she acknowledged Oregon also used 0.1ppm, “and I believe there's one other state that's exactly the same.”
      • “I'm obviously focusing on the investigation portion of this,” Wax clarified as she stated Policy and Rules Manager Kathy Hoffman had been looking at other state policies for pesticides. 
      • A December 2015 Oregon Health Authority technical report covering their “Process to Determine Which Types of Contaminants to Test for in Cannabis Products, and Levels for Action” specified that the Oregon Department of Agriculture and “analytical laboratory representatives recommended not including any organochlorine insecticides on the list. For the most part, these compounds have been banned for decades. Any organochlorine contamination would be at low levels due to historical uses in the area from decades ago as opposed to direct, recent application to cannabis.” DDE is a byproduct of dichlorodiphenyltrichloroethane (DDT), a type of organochlorine.
      • There has been some research on cannabis contaminants and implications of pesticide requirements between states. Pesticide regulations in states with medical and/or adult use cannabis include:
        • Alabama
        • Arkansas
        • California
        • Colorado
        • Maine
        • Oregon
        • New Mexico
        • New York
        • North Dakota
        • Texas
        • Virgina
    • As for the April 14th meeting with affected licensees, Wax told the board “our goal was to hear from our licensees and we did that.” She responded to their inquiries on “what to look for moving forward and…about the results that we had found” up to that point, which showed “0.2[ppm] and above for the on-shelf products.” She indicated they’d sought records from the licensees and recognized “it's having a severe impact on their businesses…so that's why it's super important that we're communicating” and obtaining records from them.
  • Board Member Jim Vollendroff asked if tests of water or soil samples by Department of Ecology staff had been returned. Wax reported that staff had gone out on April 11th and submitted samples by April 12th, so “we can expect water and product sample test results from those 18 locations seven to 14 days from the date of test submission,” making April 19th the earliest date she expected to see results. Soil testing “is gonna take 30 days,” she added (audio - 2m, video - WSLCB, video - TVW).
    • Vollendroff followed up to ask where water was being collected from. Wax had no information about that part of the process, but knew staff from the agencies were “making sure that we were collecting the right tests for the locations that we were at.”
  • Postman relayed his understanding that DDE was likely to be “in the ground" as a DDT byproduct, and WSDA staff at the stakeholder meetings verified the area had been known “as a place that had heavy DDT use" before the compound was banned federally in 1972. “Nobody has suggested this is anything that's been applied by anybody,” Postman stated, however, there was an obvious “legacy here; we don't know…for sure when [DDT use] stopped because they also said that in this area…the farms were just…heavy users of this and they had some stored on site.” Nonetheless, he was confident that DDT “was there when people started growing there” (audio - 2m, video - WSLCB, video - TVW).
  • Postman’s reasoning prompted Garrett to wonder why these weren’t among the pesticides with dedicated action levels and required testing. Postman replied that since putting the action levels in rule, “we've had the authority to do random tests for…a list of allowed chemicals and then a test that…would show chemicals that aren't allowed (audio - 4m, video - WSLCB, video - TVW).
    • Since we started this we've tested over 600 times around the state for a list of 243 different chemicals that [WSDA] is able to test through their lab.” Postman shared that the region WSLCB staff believed to be impacted had “been getting hot tests. I would say at least from 2019 maybe 2018, and in each case there was some action taken so it's not that we never cared or didn't follow up but we didn't see the pattern that we see later.”
    • At some point in 2022, Postman explained that more product tests “were relatively high and another cluster…and we have somebody taking a new look at this, and in the paperwork was frankly going to different people who looked at it went, ‘Hey, we should talk about what's going on here as as a whole.’” He knew licensees in the region “who have tested positive were made aware of it at the time, they had holds placed, sometimes product destroyed, and we continued to test and it…didn't go away and the pattern was alarming to smart people who took a look at it recently, and said, ‘hey we…should focus on this a little more.’”
      • Former WSLCB Chemist Nicholas Poolman moved to the WSDA Cannabis Lab Accreditations Standard Program (CLASP) team in early 2023 and Wax acknowledged the hiring of a new chemist who may have been involved in assessing DDE results.
    • Postman remarked how agency testing with WSDA had been focused on “foliage on the farm, but now we went into a store and took something off the shelf and tested it and that’s showing pretty high numbers….certainly twice the limit, and above that.”
  • Garrett’s interpretation was that “this wasn't just a shock, new to [affected licensees], they” were “knowing all along that there's been some hot tests, and on and on.” Postman mentioned any company with pesticide results over action levels was informed, and that there’d been recalls. He was empathetic that the situation was “disruptive to the businesses…and the way they look at it is ‘well, we didn't do anything wrong…this is a legacy here,’ which I understand…but we have a standard in rule, and we're…mandated to enforce those rules, and I don't think we have any science that tells us we could relax it.” Postman argued that “in a way this is working like it was supposed to work,” with enforcement staff taking action on licensees testing above an established “limit, and it's not zero, because…we've all learned that zero is not really zero,” and 0.1ppm was a “knowable level.” He further observed “not much is known about how it relates specifically to cannabis” finding “there's just a lot that's tough” but their priority as regulators was a standard “that protects the public health."
    • Significant public comments on the topic at the April 12th board meeting showed no one against enforcement of pesticide rules, but significant concern over the since-abandoned emergency rules to enact a 0.00ppm limit for DDE. 
  • Postman praised staff diligence on the subject. He noted “most of our licensees have been cooperative, but not all” which furthered “tensions” but WSLCB staff would keep working with other agencies “looking at what are those other paths, what can happen, how…do you allow somebody to stay in business? What would need to happen? Is there a process?” (audio - 1m, video - WSLCB, video - TVW)

• Agency leaders planned to establish and staff a three-person Research Unit within the WSLCB Policy and External Affairs division that would take direction from the board and Management Team to study and prepare research materials on policies or topics of interest.
  • Postman began the discussion by indicating Vollendroff’s interest in the concept while Policy and External Affairs Director Justin Nordhorn had been looking into specifics (audio - <1m, video - WSLCB, video - TVW). Vollendroff noted how he’d worked “in the public arena for over 20 years and every department or agency that I've worked in has had a research section within it to help advance public policy, and to also make sure that we're making decisions that are based on science and research, and so this proposal before the board today is to further that.” He was optimistic the board members would see value in the unit “and I have learned…how important that would be and just feel like it would be an incredible value” to WSLCB overall (audio - 1m, video - WSLCB, video - TVW).
  • Nordhorn began by explaining that “since late summer, early fall last year we've been exploring this issue,” doing “research into the research program.” Staff had found their work was complicated because “there's so many rapid changes going on, particularly in the cannabis product marketplace.” With “unanswered questions” on several topics, there were “a lot of unknowns that are out there that we’re unable to respond to” absent expending “resources in a lot of parts of the agency, not necessarily coordinated, in trying to figure out what these things look like” (audio - 8m, video - WSLCB, video - TVW).
    • Nordhorn noted “delta-8[-THC] came around, a lot of youth access concerns, risks, unregulated markets, those types of things.” But as “we had some legislative interest and demands for this type of information,” he perceived a “piecemeal” system had emerged where he and Hoffman researched something along with staff from various WSLCB divisions as deemed appropriate. Coordinating this work “in a central area…would be very beneficial,” Nordhorn commented.
      • Among the most frequent requests were “comparison and analysis particularly with other states,” he added.
    • Although “this isn't in the job description of most jobs within the organization,” Nordhorn said officials had gotten “pulled away from the other important work that we're doing to be able to tackle some of these issues.” He’d found “approaching research in an intentional manner to gain neutral and objective, and scientific information is really important” to “make informed decisions.” Other benefits to a fixed research staff he identified were “mitigat[ing] risks and misunderstandings, creat[ing] some uniform conclusions.” Additionally, they needed help to “distill and gather this information into a digestible form. So those of us who are not scientists can understand it easier as we're discussing these particular issues.”
    • Nordhorn told the board they’d looked into research units at the “New York Office of Cannabis Management…Massachusetts Cannabis Control Commission…Pennsylvania Cannabis Regulators” and with “the King County Board of Health, as well as looking at approaches, and types of job descriptions, and related materials from” the Washington State Institute for Public Policy (WSIPP). They’d seen “commonalities” in these organizations, and staff determined “a three-person team [was what] we would be looking at proposing” which he said would “reach out and collaborate with other divisions” as needed. The unit could “support all the divisions”: if another office “needs to do across comparison with other states,” a research office would mean “they don't have to pull somebody else away” to oversee a report.
    • Speculating on what “types of data...would folks be looking at in these research positions,” he noted the potential to “look at things like population data, density of outlets” but also be mindful of “mixed methodology” in research on a topic. Other issues researchers could study included “community impacts, effectiveness of our rules…and of course, public health,” Nordhorn said. He identified more potential research topics staff had raised: “stuff like the social equity factors…the THC content issues with hemp production…general product accessibility” that Nordhorn felt was done in policies like alcohol impact areas but had yet to be applied to cannabis. More issues were “prevention of underage access, safe responsible consumption for adults, public health impacts, What does that look like for the different products? And of course…the marketing, advertising, manufacturing, those types of things.”
      • As passed by WA House, SB 5080, “Expanding and improving the social equity in cannabis program,” featured requirements around adding additional retail licenses to the program based on population estimates. The bill also allows for restrictions based on outlet density, likely informed by a WA HCA brief: Location Matters: Access, Availability, and Density of Substance Retailers published in early January 2022 from the “cooperative effort between members of the Washington State Prevention Research Sub-Committee, Washington State University’s IMPACT Research Lab, and the Division of Behavioral Health and Recovery.” 
    • He identified three roles within the prospective unit:
      • “a research manager that would handle some of the budget issues as well as collaborating with the universities and other research entities”
        • Nordhorn remarked that they’d “conceptualized…possibly looking at seeking funding to incorporate grant type of approaches, and be able to share research goals with other folks and then maybe help pay for those.”
      • “a researcher…what we looked at working with HR and looking at the state classification schedule, this would be a regulatory analyst position”
      • “a management analyst which would be…the data kind of person that would gather a lot of the information from the researchers” and “may do some independent research, but also they would be…the position that would boil this and distill it down into digestible materials.”
    • Nordhorn described how the research unit could partner with other groups, “and that's going to maximize our research opportunities.” 
  • Vollendroff brought up how he’d discussed the possible research unit with Cannabis Regulators Association (CANNRA) Executive Director Gillian Schauer to learn about any other states with established research entities for cannabis. He learned “many of the innovative states actually have research sections already created, so a lot of this is modeled after what we're seeing in other states.” He’d also been meeting with research staff at the Washington Traffic Safety Commission (WTSC), the Washington State Health Care Authority (WA HCA) and their Division of Behavioral Health and Recovery, and felt “it's one thing to look at your own data in isolation; it's another thing to look at data across state agencies. And when you look at data across state agencies, they really begin to tell a different story, and I think that that's a powerful component of what this group can do for us.” He agreed with Nordhorn’s impression that cannabis was new and evolving “and new things are going to be coming at us” that a research unit might better prepare them to act upon (audio - 2m, video - WSLCB, video - TVW).
  • On the issue of whether it was better to contract out research topics as needed, Nordhorn argued they could “prioritize” and "pivot" more quickly with an internal unit. As for what would be the priority topics for the group, he said they would be “proposing bringing this to the Management Team, and say ‘hey…what makes the most sense for all the divisions?’” Once there was more input from division leaders, Nordhorn expected agency leadership would be better positioned to determine research priorities. He mentioned that they’d spoken “at length with [human resources]…and our finance team to really line this out” and would be “ready to go if the board is comfortable with the concept.” Nordhorn expected the unit was “gonna save time, I think it's gonna build efficiencies, but of course, we don't have something tangible right now. But I think that we do have an opportunity with implementation now to actually even showcase some return on investment by the time late summer comes around when budget packages…are needed” (audio - 2m, video - WSLCB, video - TVW).
  • “I think we need this, we need it badly; I wish we had it last week,” Postman lamented. He didn’t question the value a research unit could add to the agency, but since this was a “board initiated” personnel move and “it's a full office,” he wanted to have due diligence on “any competing needs internally” and the additional spending it would necessitate “right when we're…about to get our biennial budget.” Postman considered it a complex matter of “limited resources” at WSLCB as the agency was “making a change at the director’s level.” As for the research topics, he expected that board members “ha[ve] questions often…and we'd like to be able to…have folks research things on our behalf.” Postman believed there would be a lot of overlap with management team needs, but a research unit needed “to have some capacity…for board initiated research to help us make decisions” (audio - 3m, video - WSLCB, video - TVW).
    • Nordhorn felt the three-person unit would be large enough to be “flexible” for multiple research priorities; “we may be running some surveys and those types of things on one front, and then when a question comes in somebody else can pick that up and run with that.”
  • Postman sought clarification of where the unit would fall organizationally, to which Nordhorn answered that the group would be "kind of on their own" in terms of their location within agency headquarters, but the research manager would report to him (audio - 1m, video - WSLCB, video - TVW).
  • Vollendroff proposed “this is an area that I am very interested in, and an area that I've got a lot of experience working with,” and hoped to be the board’s main contact point with the research unit. “I'd also like for the board to be regularly updated and involved in some of the projects that are being approved for the research team to be working on,” he said (audio - 1m, video - WSLCB, video - TVW).

• Director of Legislative Affairs Marc Webster addressed a few remaining bills and budget issues before the legislative session concluded on April 23rd.
  • Webster mentioned the “two big” agency request bills—SB 5080 and SB 5367, “Concerning the regulation of products containing THC”---had been passed by both chambers, were “through concurrence,” and would be delivered to the Washington State Office of the Governor in the near future (audio - <1m, video - WSLCB, video - TVW).
    • Garrett encouraged a communication regarding SB 5080 “where we talk about how we got to where we are and now having a social equity program” to explain the process “going back to 2020. It started with the outreach meeting” hosted by agency staff, the creation of the Washington State Legislative Task Force on Social Equity in Cannabis, and associated legislation. Other board members concurred, saying they should aim to release that the day SB 5080 was signed into law, and highlight how other adult use cannabis states were “actually doing this at implementation, and how they've learned from our mistakes” (audio - 2m, video - WSLCB, video - TVW).
  • SB 5263 - “Concerning access to psilocybin services by individuals 21 years of age and older” (audio - 1m, video - WSLCB, video - TVW)
    • Webster said the bill “looks a little bit different” and had a Psilocybin Advisory Board that differed from a previously established work group. This board included both a WSLCB representative and “an individual with experience working with” the Cannabis Central Reporting System (CCRS), as he understood “there's still some interest in…looking at whether CCRS or something like it could be utilized in the psilocybin world.” He noted that there would also be an entity with “LCB, the Department of Health, and [WSDA] to try to design or recommend regulatory framework” in addition to WSLCB representation on a WA HCA interagency psilocybin work group “trying to stay up on clinical data, research, and gaps in the research.”
    • “The bill now also includes an actual pilot program administered by the University of Washington's Department of Psychiatry and Behavioral Sciences to actually offer psilocybin services to patients, to populations like that, veterans and others, suffering from” post-traumatic stress disorder.
  • SB 5187 - “Making 2023-2025 fiscal biennium operating appropriations” (audio - <1m, video - WSLCB, video - TVW)
    • “The big remaining job” facing lawmakers was adoption of biennium budgets, Webster mentioned. “I've heard the budget could be released on Friday, and I've also heard Saturday,” which would be “extremely late” and require lawmakers to work until sine die, the “Last day allowed for regular session under state constitution.”