WSLCB - Board Caucus
(May 2, 2023)

Here are some observations from the Tuesday May 2nd Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• The new Research Manager was announced to be Kathy Hoffman, previously the Policy and Rules Manager, and other details about the group’s new role at WSLCB emerged.
  • Staff talked with board members about plans to establish an in-house research team on April 18th.
  • Board Chair David Postman congratulated Hoffman on being the “first ever” Research Manager, who would be “overseeing two other hires plus a bunch of other stuff.” He credited Board Member Jim Vollendroff for pushing to establish the office (audio - 5m, video - WSLCB, video - TVW).
    • Hoffman didn’t believe agency employment opportunities included postings for the ‘researcher’ (regulatory analyst 3) and management analysts 5 positions, anticipating the postings would be listed at the “end of this week, early next week.” She promised to take up the matter with Policy and External Affairs Director Justin Nordhorn and Human Resources Director Anita Bingham, indicating “we’ll also be recruiting for my position around the same time.”
    • “There are a couple of rule projects that are going to follow me that…weave into the research program a bit” which “I have a lot of experience with,” noted Hoffman. She planned to continue involvement in the Cannabinoid Science Work Group, however the Quality Control Standards Work Group would be “paused…but I suspect that's going to come over with me as well because” she planned for the Research Unit to do “program evaluation, rule evaluation.” Hoffman also anticipated responding to “legislation related to psilocybin work in the future” due to mandated involvement by the agency representatives; “with the exception of the expertise that they're looking for on [the Cannabis Central Reporting System], which…might fall to our enforcement experts or someone from IT.”
    • Responsibility for social equity program development “is kind of on the fence right now,” she stated, and may move over to research or remain within the purview of the Policy and Rules team or “because there's rule implications for that.” Hoffman said “twice monthly meetings with legislative staff” to track issues of concern “will probably stay with the Policy and Rules unit as well.” Additionally, Hoffman expected the “Research Unit can feed the work of Policy and Rules in terms of research, program development, [or] program evaluation.”
  • Jim Vollendroff acknowledged he was “thrilled” by the move, having been a staunch advocate that “this is a unit that we need within the LCB and that it will pay dividends across all divisions in the coming years under your leadership.” Having said that, he admitted, “I do worry a little bit about all the things you're bringing with you, considering that there's a full plate of things that also need to be accomplished…but I'm sure that we will figure that out.” Vollendroff hoped to sit down with Hoffman to discuss the new office, agenda, and “offer my support along the way,” plus “be a representative back to the board if the board wants me to take that role.” Hoffman noted, “it reminds me a bit of when we built out this Policy and Rules unit to begin with, we didn't have that in the agency before, and I'm really looking forward to somebody coming in…and making it better” as she supported agency divisions “in a different way” (audio - 3m, video - WSLCB, video - TVW).
  • Postman seconded Vollendroff’s sentiments and felt the integration of the Research Unit into WSLCB was “super important.” Appreciative that Hoffman had a lot of responsibilities, he asked for her support “to develop those new connecting tissue[s]” within the institution to leverage a research group. “We shouldn't assume that just because we all think this is a great idea that everyone will adopt that view automatically. We're gonna have to sell it a little bit,” Postman added (audio - 1m, video - WSLCB, video - TVW).

• Hoffman led a rulemaking update that took stock of the new efforts mandated by legislation, existing projects, and two more petitions for cannabis rulemaking.
  • Hoffman established that a "very successful legislative session ended" creating lots of new rulemaking work in addition to review of petitions (audio - 1m, video - WSLCB, video - TVW).
  • SB 5367 Implementation and Product Samples (audio - 1m, video - WSLCB, video - TVW)
    • Implementation of rules relating to the agency request bill on tetrahydrocannabinol (THC) regulation would be overseen by Policy and Rules Coordinator Cassidy West, Hoffman told the group, anticipating it would be “completed by January 31st” of 2024.
    • West would also be responsible for the Product Samples Rulemaking Project “because there are connections between those two pieces…of work that have to do with coming up with a common nomenclature in terms of how we refer to different sample sizes, [and] units” in cannabis products. Hoffman commented that this project was expected to be done by “early-to-end of December.” 
  • Cloud Storage (audio - 1m, video - WSLCB, video - TVW, Rulemaking Project)
    • Policy and Rules Coordinators Jeff Kildahl and Daniel Jacobs were partnering up to address the project, Hoffman indicated, noting a survey showed greater “interest from our alcohol licensees” than their cannabis counterparts even as the August 2022 petition had been submitted by a cannabis licensee. However, she commented how the feedback staff had received indicated that a “guidance document” on what was already allowed in rule would be more useful than more rulemaking. Hoffman said the survey would conclude “at the end of this week, and then we can provide the board with some more updates.”
  • Payment Terms (audio - <1m, video - WSLCB, video - TVW)
    • Kildahl would also have responsibility for the allowance of “mailing checks for cannabis licenses,” which Hoffman projected would be concluded “towards the end of September.” 
  • Medical Cannabis Retail Endorsements (audio - 1m, video - WSLCB, video - TVW)
    • Hoffman’s intention was to wait on the petition accepted on March 29th “because that will involve some additional stakeholder engagement.” She wanted to ensure adequate staffing so “there's a lot of attention paid to that project” to complete “meaningful work in a meaningful way.”
  • SB 5080 Implementation (audio - 1m, video - WSLCB, video - TVW)
    • Implementing the social equity law would be a project that Hoffman carried with her to the Research Unit, even as a “significant amount” of rulemaking was expected relating to the measure. “I started to analyze the actual bill language, breaking it into pieces, aligning it with rules that we have in place, rules that we’ll need in the future, and I'm up to page seven,” Hoffman added.
    • Board Member Ollie Garrett was glad Hoffman would continue oversight of the bill and congratulated her “on your new role” (audio - 1m, video - WSLCB, video - TVW).
  • Advertising (audio - <1m, video - WSLCB, video - TVW, Rulemaking Project)
    • The first of two projects “temporarily paused to accommodate the rest of this work,” Hoffman explained it was necessary to “make sure that we have the capacity to move that…complex project” forward.
  • Minors on Wholesale Licensed Premises (audio - <1m, video - WSLCB, video - TVW)
    • Hoffman identified the second rulemaking effort that would be halted even though the CR-101 had been prepared by West, acknowledging, “with as much legislative implementation as we have in play right now, we'll have to put that one on pause as well.”
  • Rulemaking Petition - Social Equity Scoring Rubric (audio - 1m, video - WSLCB, video - TVW).
    • The preceding week, a petition had been submitted “asking the board to take a look at the social equity scoring rubric;” staff would make a formal presentation and recommendations on June 7th, Hoffman reported. “If the board does accept that petition,” observed Hoffman, she expected the petition could be conjoined with the SB 5080 project as “they're closely paralleled.”
  • Rulemaking Petition - Pesticide Action Limits (audio - 1m, video - WSLCB, video - TVW).
    • Another petition sent in “a couple weeks ago” requested the board consider a “default” for pesticide action levels for compounds without specific levels already in rule of 0.1 parts per million “to the additional pesticides that the [Washington State Department of Agriculture] test for” which she understood to be “243 total” but only covered “59 of those 243 in rule.” She anticipated this would also be addressed by staff on June 7th.
  • Hoffman was planning for “one or two [public] hearings a month in the fall with these projects moving forward” (audio - 1m, video - WSLCB, video - TVW). She stated the Policy and Rules group had been contemplating “what this is going to mean to the internal project teams,” looking “to consolidate where we can” for efficiency across a number of subjects and priorities. While mindful “we're not imposing too much on already burdened staff time” for various rulemaking projects, Hoffman was clear that they would entail “additional stakeholder outreach” (audio - 1m, video - WSLCB, video - TVW).
    • Vollendroff commented on the amount of work facing the Policy and Rules team and the fledgling Research Unit, “offering [an] opportunity to…let us know how we can support you along the way.” Hoffman agreed the 2023 session resulted in the most legislative implementation she’d seen since joining the agency, “and it wasn't just concentrated just on cannabis or alcohol. It was across the board.” She felt implementation of legislation was “the other side of…summiting the mountain” (audio - 1m, video - WSLCB, video - TVW).

• Board members acknowledged the passage and signing of social equity legislation and how it reflected the long-term commitment staff and board members had for the important issue.
  • With Garrett and staff in attendance for the signing of SB 5080 by Governor Jay Inslee, Postman acknowledged the effort of supporters inside the agency and beyond: “this is just one more step, but it's been a four-year effort that predates” Vollendroff and his time on the board, and had been spearheaded by WSLCB leaders since 2020. He remarked there had been realization “that the industry was not diverse. It was not reflective of the people who had been…harmed most by the war on drugs” rather than having social equity “foisted on us.” He called out the work of others at WSLCB, specifically staff who had participated in social equity policymaking, the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), or program implementation  (audio - 2m, video - WSLCB, video - TVW):
    • Director Rick Garza
    • Director of Licensing Becky Smith
    • Senior Education and Policy Manager Kaitlin Bamba
    • Nordhorn and Hoffman
    • “We just closed applications on [April 27th], which is the fruit of that original legislation,” with equity licenses hopefully “hitting the street right when we're…seeing what this next piece is gonna look like,” said Postman. He continued that the equity program was “just a big deal” that represented “the hard work that we're doing to try to make things better” even though it could be “really hard.”
  • Garrett appreciated the recognition, feeling the community outreach they’d conducted in 2020 was “really an eye opener for internal” staff. She suggested “sometimes we become so tunnel vision[ed] that until we hear[d] first hand from people that was impacted, and to think about what we did and what we could have done different[ly].” But social equity policy demonstrated to stakeholders and the public “we want to do what we can going forward; everybody in the agency stepped up.” Garrett realized there was a lot more to do, and “we don't know what the outcome of this is going to be.” She’d been “talking to some folks yesterday, when you look at the social equity programs that people have put in place in other states and nobody has come up with a perfect…program, and from my understanding what we have put together is so far one of the best in the country” (audio - 2m, video - WSLCB, video - TVW).
    • Tacoma City Council member Keith Blocker issued a statement on the passage of SB 5080, finding the bill contributed to ensuring “parity in the licensing system for producers and retailers, giving everyone an opportunity to thrive in Washington’s multi-million dollar retail cannabis industry.” He thanked WSLCB, sponsoring Senator Rebecca Saldaña, and others who lobbied for the measure, stating “this bill helps Washington state provide equitable opportunities for wealth-building and entrepreneurship. We must keep building on this success.”
    • Blocker had previously championed a council request for additional cannabis license allotments for “social equity applicants” in July 2020.