WSLCB - Executive Management Team
(June 14, 2023)

Here are some observations from the Wednesday June 14th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 4 takeaways:

• Staff were bullish when talking about how helpful a new legislative implementation tracking system would be for their work.
  • Director of Legislative Relations Marc Webster began by saying he’d mentioned the tracker previously, crediting Policy and Performance Manager Jessica Dang for getting the service “up and running” and “continually adding to it” through Microsoft Lists. Webster explained the tracker was for internal use, and would aid staff in integrating “things that we learned” during earlier legislative implementations, or “all the reports that we’ve been tasked with” (audio - 6m,  Video - WSLCB, Video - TVW).
    • Webster cautioned that the tracker was new, but it was intended to supplement disparate implementation work across WSLCB divisions, activity previously done through “printed documents.” He expected the tracking software to “evolve and change” both in appearance and how it was used by staff: “we’ll have to iterate to see what usefulness looks like.”
    • “It’s organized by year, and then by bill, or process” such as a “budget proviso,” said Webster. The tracker would allow officials to “break these down into specific deliverables, so sometimes those are really well defined, and sometimes they aren’t.” For cannabis, Webster offered the example of SB 5080, "Expanding and improving the social equity in cannabis program," which was “huge” and he anticipated it “would take longer to implement.” He named the two entries already in the tracker related to the bill:
      • “One for the DIA [disproportionately impacted area] maps,” which had to be completed before issuing additional licenses.
      • “The process to issue licenses across three license types” was another column in the tracker, though it would be “fleshed out over time” as staff implemented different parts of the bill based on “what makes sense to do in what kind of order.”
    • Having recently met with staff about a mandated study by the  Washington State Joint Legislative Audit and Review Committee (JLARC) of cannabis excise tax distributions under the 2022 law SB 5796, Webster noted different staffers were “thinking about rulemaking, thinking about community outreach” with Washington State Office of Equity staff.
      • At time of publication, JLARC staff had scheduled one presentation on the subject for November 29th, and another to present a proposed final draft of the report on January 3rd, 2024.
    • Integrating an information technology (IT) staff “anticipated calendar” of work relating to SB 5080, was also something the tracker could assist with, he suggested, as that team had to work on other projects, including “around the SMP [systems modernization project] rollout.”
  • Dang spoke up to share that staff were still adding to the implementation tracker, but would “try to craft a dashboard” for the system that would allow the board or staff to see project actions based on priority, status, or “the level of effort it might take.” She was looking at different visualizations to make the tracker more useful as well (audio - 1m, Video - WSLCB, Video - TVW).
  • Board Member Jim Vollendroff remarked he “really like[d] what I see so far.” Having “used similar tools in different roles,” he appreciated the platform would continue being developed by staff. He felt agency directors might want to see both an implementation project lead, but also the lead in that division, plus “other state agencies that we're maybe working with…or who are also identified in the legislation that we're tracking, would be helpful.” Dang concurred those were among the “missing components” she’d endeavor to include in the tracker and suggested she return to update board members “periodically” on the system (audio - 2m, Video - WSLCB, Video - TVW).
  • Deputy Director Toni Hood further praised the work of Dang and Webster, predicting the implementation tracker would help staff “understand agency wide impact of our legislation,” and that as it developed, the platform would become “a fabulous place to look for information" (audio - 1m, Video - WSLCB, Video - TVW).
    • Additionally, Hood raised the possibility of hiring a Management Analyst who could assist Dang and Webster with the tracker (audio - 1m, Video - TVW, Video - WSLCB).

• An update on the social equity program from Senior Education and Policy Manager Kaitlin Bamba answered several questions about the status of the licensing process.
  • Bamba commented that WSLCB staff continued to receive questions on application status that should instead be submitted to Ponder Diversity Group (PDG) representatives as that firm sought supplemental information to score and prioritize applicants. She made clear that WSLCB staff were “not reviewing those applications, nor are we aware of what is needed for each application…that really is the responsibility and role of Ponder Diversity,” and “their response time continues to be within 48 hours” (audio - 1m, Video - WSLCB, Video - TVW).
    • Board Chair David Postman asked how many applications were being handled by the vendor, but Bamba indicated they didn’t know as there were multiple types of reviews underway by PDG staff (audio - 1m, Video - WSLCB, Video - TVW).
    • Vollendroff mentioned public commenters who were unhappy with the responsiveness and application of the scoring rubric. Bamba relayed that the firm’s representatives continued to be “very responsive.” Postman considered the different review phases, and how those had been communicated to applicants, as a possible source of confusion. “I also followed up and it seems like it's going as well as it can,” he said, believing that PDG staff were “dealing with hundreds of applicants.” Bamba assured the board she would continue to make sure the firm was “following what they're expected to do” (audio - 1m, Video - WSLCB, Video - TVW).
  • Bamba announced that Aaron Washington had been hired as Social Equity Manager as of June 16th. She noted, “we'll be sure to bring Aaron to meet all of you who are looking forward to having this position filled, and having a dedicated resource” for the implementation of SB 5080 (audio - 1m, Video - WSLCB, Video - TVW).
  • Looking at the new law expanding the equity program, Bamba said Director of Licensing Becky Smith was the lead on SB 5080 licensing updates which was “not delaying or impacting our existing program,” and instead was “really moving forward and expanding the program” without effecting “those that are under the review process now” (audio - 1m, Video - WSLCB, Video - TVW).
    • Staff across divisions had set up an internal work group for implementing aspects of the bill which she mentioned included “adding licenses for both retail and producers, requir[ing] changes to the disproportionately impacted area maps, and license fee reimbursements.” She commented that they first met on May 25th, and “our next meeting is scheduled next week.”
    • Postman followed up to say that even without impacting the schedule for existing equity applicants, “we're also in this a little bit difficult position to try to learn from the current one in time to implement the second one.” He appreciated this challenge and didn’t want the board to “do anything to make it more difficult,” yet “I think there are some things we…have seen and felt in this process that we have the chance to adjust if we can.” Bamba agreed and suggested staff were being mindful about “what can we do now while we're waiting for some of the other things.” Postman’s hope was they could move forward equity program changes "as fast as humanly possible” (audio - 2m, Video - WSLCB, Video - TVW).
  • Director of Communications Brian Smith touched upon how he and Becky Smith were organizing “communication and outreach implementation plans” for social equity, and would “take advantage of Mr. Washington coming on board,” having met him earlier, he found the incoming Social Equity Manager “seem[ed] like a good guy.” His team was also working on an update video to be released “with what's going on with [PDG], and the current application process, and what that means about on 5052, and it's going to touch on some of the things” mentioned by Postman on differentiating between ongoing activities, and those being implemented (audio - 2m, Video - WSLCB, Video - TVW).

• An Enforcement and Education briefing from Acting Deputy Chief Dan Rehfield became focused on a decline in warnings given to cannabis licensees, plus implications from increasing notices to correct (NTC) being issued.
  • Rehfield began showing the number of licensees for cannabis as of May had gone down by five to a total of 1,760, continuing a “trending decline for whatever reason.” He noted that the cannabis unit continued to receive “a lot of the DDE [dichlorodiphenyldichloroethylene] complaints,” presuming “that will be trending higher probably than lastyear’s” figures due to “a lot of internally generated complaints, as well as external complaints.” Cannabis licensees had been the subject of 389 complaints since the start of 2023, and Rehfield showed Enforcement staff considered half of those public safety related (audio - 6m, Video - WSLCB, Video - TVW, presentation).
    • Educational contacts were expected to be higher than 2022, and cannabis education had been “trending up with the compliance consultants, and the other team members are increasing their footprint in this area,” he stated.
    • Regulatory, youth access, and licensing/permitting were the top complaint topics in May related to cannabis licensees, Rehfield reported.
    • According to Rehfield, more NTCs were being distributed by the cannabis unit related to DDE as well as “some advertising issues that were…popping up.” A large increase in NTCs was attributed to cases involving “advertising, and other realms that [consultants were] doing,” as he observed that team was “fully staffed and they're able to create those opportunities for education.” General advertising violations had been the top category for May, followed by failure to maintain surveillance systems, and he said the advertising NTCs “after that opinion that was rendered by” the Washington State Office of the Attorney General (WA OAG).
      • An advertising rulemaking project at the agency was confirmed to have been “temporarily paused to accommodate the rest of” agency rulemaking priorities as of May 2nd.
    • “Why do you think warnings didn't go up,” asked Postman, expecting they would “somehow parallel.” Rehfield described NTCs as a more formal type of consultant education for licensees that gave a “method of compliance, how the licensee can become compliant…almost like a contract to [bring] compliance.” He contrasted this with warnings, which constituted the lowest level of formal enforcement action by officers (audio - 1m, Video - WSLCB, Video - TVW).
    • As Postman expressed surprise that no cannabis licensees were issued warnings in May, Rehfield suggested this was “what we're alluding to with that NTC as a method of education versus the warning.” He emphasized they didn’t have a “violation component” for a cannabis business, though if not addressed consultants could refer the NTC to Enforcement officers who might take action (audio - 1m, Video - WSLCB, Video - TVW).
    • Vollendroff asked for an example of when a cannabis business might receive a warning. Rehfield speculated that if a licensee indicated to a consultant they wouldn’t be “amenable” with coming into compliance via an NTC, Enforcement personnel would begin a “verbal warning, written warning, AVN [administrative violation notice] path.” Postman commented that he understood a goal to “settle at the lowest possible” enforcement level, and wondered if it was in part “because it's dealing with things like DDE which are different.” Rehfield reiterated NTCs weren’t violations, and Webster noted the move towards education over enforcement actions had been called for by cannabis businesses among other stakeholders (audio - 3m, Video - WSLCB, Video - TVW).
  • Rehfield also remarked there were no cannabis businesses with violations going through the administrative process, and checks on retailers not selling cannabis to youth was at 97%, continuing the “higher compliance rates” of the industry as compared to all other sectors regulated by the agency (audio - 1m, Video - WSLCB, Video - TVW).
  • Near the end of his presentation, Postman thanked Rehfield for taking on the additional responsibility of Acting Deputy Director for the division following the departure of former Deputy Chief Ron Rupke, who returned to a post with the Washington State Patrol (WSP, audio - <1m, Video - TVW, Video - WSLCB).

• Board Member Jim Vollendroff talked about the transition to a newly hired agency director (audio - 4m, Video - WSLCB, Video - TVW).
  • Colorado cannabis regulator Will Lukela was announced as the replacement for former Director Rick Garza on June 1st, with the board heralding the choice.
  • At a prior internal meeting, Vollendroff had raised a question about Lukela’s “timeline and whether we should slow down and wait for him; we decided to…keep moving forward” with agency business until he officially began his new post. Vollendroff commented that their plan was to ”make him aware” of developments like the legislative implementation tracker, but “with his schedule he's gonna be very busy, and we didn't want to slow…the process down.”
  • Others present were in agreement, and Postman said “this has come up a couple of times recently with other people asking about certain things. Just so everyone knows: don't slow down on anything” for the sake of letting Lukela settle in. He argued these were “long-standing initiatives, policies, and strategic plan pieces” where they needed to “keep driving,” as procrastinating would stack “things up on his desk.” Postman felt the board could get him up to speed, with the exception being that some hiring would be “worth consulting” with Lukela on.