WSLCB - Executive Management Team
(July 12, 2023)

Here are some observations from the Wednesday July 12th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 4 takeaways:

• Research Manager Kathy Hoffman delved into attending a Cannabis Regulators Association (CANNRA) meeting in Maryland, sharing what she’d learned on topics like market dynamics; consumer education and youth access; regulatory standards for cannabis; and hemp cannabinoid products.
  • The organization’s first external stakeholder meeting was in June 2022 in Seattle. The June 26th and 27th meeting in Maryland was promoted with additional materials on the group's website. Changes to CANNRA leadership and new members were announced on June 30th.
    • On January 11th, staff went over topics from a December 2022 CANNRA conference.
    • During public comments on July 5th, Cannabis Observer Founder Gregroy Foster wondered whether a reported fee charged of stakeholder groups could help fund CANNRA support staff as “it's been my understanding that some of the LCB staff have had to volunteer public time to assist this private organization.”
  • Hoffman contended she could speak about “everything I learned at CANNRA, but would take two hours” rather than her allotted 20 minutes. She focused her remarks on the “major themes” of the event, indicating some would be “very familiar” to the group (audio - 5m, Video - WSLCB).
    • Hoffman began by describing the attendees. Starting with the Seattle meeting in 2022, the goal of CANNRA leaders was to include a “diverse array” of stakeholders in “cannabis policy with a broad range of perspectives, and they certainly did that this year.” She said there were “organizations that work on research and standards, social justice, legal issues, consumer product and safety, clinical engagement, a whole lot of stuff.” Not invited to the gathering were “state-level trade associations, coalitions, or advocacy groups…and to avoid outsizing no more than two people from each entity could attend. Even so it was a huge group of people,” indicated Hoffman
    • Maryland Governor Wes Moore provided opening remarks on the “eve of their legalization or opening the first retail shops in Maryland,” Hoffman explained.
      • Find out more from a June 26th press release from Moore’s office regarding his speech to CANNRA members.
    • Hoffman mentioned specific plenary sessions she attended involving “interstate commerce…new directions in cannabis policy, equity and social justice, market dynamics was another panel.” She also attended a breakout session for "on-going challenges with cannabis research." It was her understanding that most of the sessions were “recorded and should be up on the CANNRA website in the not so distant future.”
    • “Potency caps” was a top concern Hoffman heard during the sessions, “and whether or not potency is even the right word to use in the cannabis space.” She related this to a series of research reviews and legislative efforts in Washington to further regulate cannabis concentrates.
    • Another “interesting theme that emerged” for Hoffman was “economies of scale, and a pretty decent discussion around the tension between large and small businesses, and the impacts of vertical integration and balancing multiple interests.”
    • “Challenges of creating solid testing standards; and packaging and labeling standards,” was another subject Hoffman noted since all attendees cared about product safety for consumers, “and more importantly, patients.” Also, “how do we really define intoxicating cannabinoid” had come up repeatedly, she commented, something agency staff had also struggled to outline.
    • Hoffman said the "jurisdictional battle over hemp" was the last subject which was discussed in “one of the final plenaries, it was a really long one.” She mentioned there had been “fiery debate” on the matter.
      • Board Chair David Postman asked who had been involved in the exchange. Hoffman responded that it was between a “United States hemp council” representative, two cannabis industry members, and a staffer from the U.S. Food and Drug Administration (FDA) who all expressed “decidedly different” ideas for regulation (audio - 1m, Video - WSLCB).
      • The agenda posted had the following “U.S. Federal & State Policy on Cannabinoid Hemp Products” panelists:
        • Norman Birenbaum, Senior Public Health Advisor, Food and Drug Administration
          • Birenbaum was the first CANNRA President, and was succeeded by Andrew Brisbo, Michigan Marijuana Regulatory Agency Executive Director in November 2021.
        • Michael Bronstein, J.D., Co-Founder and President, American Trade Association for Cannabis & Hemp 
        • Daniel Fabricant, PhD, CEO and President, Natural Products Association 
        • Khurshid Khoja, J.D., President Emeritus and Board Member, National Cannabis Industry Association 
        • Michael McGuffin, President, American Herbal Products Association 
        • Jonathan Miller, J.D., General Counsel, U.S. Hemp Roundtable
      • At time of publication, WSLCB had begun to implement SB 5367, which featured stricter standards of hemp consumables as well as prohibiting synthesized cannabinoids from the legal market.
  • Hoffman reviewed a panel: “Approaches to Better Educate Consumers and Prevent Youth Access” with a “medical doctor, a gentleman who's been in the public health and prevention role for…upwards of 35 years, a youth advocate, and then a medical cannabis advocate” who were asked about the best way to regulate cannabis, including any “regulatory burden.” Hoffman remarked the prevention panelist wanted to ensure “products…aren't appealing to kids” and “let's not advertise at all.” She then said “advocates” preferred an approach of allowing the “market [to] do what it needs to do, but provide more education to kids.” Another conversation dealt with “correlation and causation” around cannabis packaging, stated Hoffman, while “peer-to-peer education was discussed as a harm reduction effort, as well.” She found this panel dug into “a really deep discussion of creating a protective regulatory structure,” a term she described the public health and prevention panelist offering before they “moved into a discussion of potency and regulating potency.” Besides agreeing on a need for more research, she felt the group didn’t want “to make those products less available to people who use them for [medical] purposes” (audio - 2m, Video - WSLCB).
    • Panelists for the session were:
      • Jodeci Gonzalez, Executive Administrator, Minorities for Medical Marijuana (M4MM)
      • David Jernigan, PhD, Professor, Boston University 
      • Jason Ortiz, Executive Director, Students for Sensible Drug Policy 
      • Lynn Silver, M.D., FAAP, MPH, Senior Advisor, Public Health Institute
    • Board Member Jim Vollendroff asked about the term "protective regulatory structure," and Hoffman relayed how she thought it was “an interesting way to…think about consumer protection, and the concerns of this particular panel” (audio - <1m, Video - WSLCB).
    • Access was another issue raised by panelists, according to Hoffman, who remembered a representative of a cannabis multi-state operator (MSO) asserting “that this is why the tier system was created on the alcohol side, preventing vertical…integration to them had been very destructive, and that they thought that limiting the size and concentration of businesses would really help in that space.” Hoffman had also been interested in an argument from some panelists that cannabis “does not have to be a for-profit industry” (audio - 1m, Video - WSLCB).
      • Postman asked for the reasoning behind this since the for-profit system had already proliferated across states. Hoffman said the public health and prevention representative pointed to the Canadian cannabis program, which “has it go down the pharmaceutical route and not, not even allow…cannabis as something that would be turned recreational, or adult use” (audio - 1m, Video - WSLCB).
        • Adult use of cannabis was legalized across Canada in October 2018, though different provinces regulate production and sales differently. Quebec has been among the strictest areas, something the board heard favorable comments on from a Canadian researcher in November 2022.
      • Hoffman added that some panelists advocated for local government control for “decisions about what sorts of cannabis facilities they wanted to have in their communities and why.” Moreover, the “middle ground” the group offered was “to tell people the truth but I guess it really depends on what you think the truth is” (audio - 1m, Video - WSLCB).
  • Hoffman then turned to a discussion on standards where she’d heard “novel ideas to improve cannabis products’ safety,” including by a representative of the American Society for Testing and Materials (ASTM) whom she’d previously worked with “on packaging and labeling standards, primarily the universal symbol.” She relayed how Association of Official Agricultural Chemists (AOAC) Scientific Advisor for the Cannabis Analytical Science Program Susan Audino was present. Hoffman added that staff had “looked at some of their standards when we were thinking about moving forward with our cannabis testing rules a couple years back” (audio - 4m, Video - WSLCB).
    • “They talked about the different types of standards, and where they come from,” she said. Those “based in the pharmacopeia…ties back to the panel on the product safety, and the push to see these products in a formal pharmaceutical space.” She believed this reflected how “you know what you're getting every time rather than the adult use space where you sometimes don't know what you're getting.” According to Hoffman, panelists had nicknamed cannabis flower the “choose your own adventure standard, which I think a lot of adult use, certain producers and processors would like to see. I thought that was kind of a funny thing.”
    • Standard methods for quantifying cannabis and cannabis product samples “helps to create the…gold standard,” shared Hoffman, though “state to state methods really are very, very different.” She talked about having connected with an ASTM representative regarding “a standard for detectable levels” of tetrahydrocannabinol (THC) required in SB 5367 implementation, and recruiting their participation in the WSLCB Cannabinoid Science Work Group. She looked forward to working closely with regulators “on bringing data and facts together,” and had found that ASTM already had many cannabis-related standards which could “be of service to regulators in the space.” Hoffman added that ASTM leaders were working to outline "intoxicating cannabinoid," and she would be participating on behalf of the agency.
      • The Cannabinoid Science Work Group last met on June 1st.
    • Panelists brought up “the differences between reference standards” and “documentary standards, Hoffman commented. The former were “suitable for drugs” while the latter “are suitable for products, and it's really helpful for regulators to know the difference between the two.”
  • Hoffman quickly mentioned observing a panel on migration of “legacy operators and consumers into the regulated market space,” before promising to address that subject “another time” (audio - <1m, Video - WSLCB).
  • Turning to hemp cannabinoid products, Hoffman noted some wanted the issue left up to federal regulators’ normal rulemaking process and pointed to a new lawadopted in Colorado regulating hemp cannabinoids. “There [were] many on the panel that believe that this is the issue of the time that will decide which way the industry goes in the space,” she remarked (audio - 3m, Video - WSLCB).
    • Attendees predicted a significant debate over hemp language in the U.S. Farm Bill which was due for reauthorization in 2023, Hoffman mentioned, but more education was needed since “there was one industry member who doesn't know how intoxicating gummies from hemp can even get into gas stations.”
    • Posed with the question of what success in five years would look like, Hoffman told the group, “across the board everyone said ‘the FDA is regulating non-intoxicating cannabinoids, there is also an assertion that the FDA needed to embrace its responsibility,” plus “someone offered that cannabis should be descheduled entirely.”
    • FDA leaders deferred on regulating CBD in January, encouraging Congress to revise federal law.
  • Later in the EMT, Director of Communications Brian Smith pointed out there had been “some media interests,” when “at the last minute” Governor Moore “wanted to have his remarks not be private. And so there was suddenly a lot of consternation about how we make this part private…and I was slightly involved” in giving “talking points for how to deal with that, but…working through some concerns that I know that [Executive Director Gillian Schauer] had at the time…and others at CANNRA as to the changes.” Smith also had a “meeting today with the larger public education team of CANNRA” that included a debriefing of the conference and dialogue on how to “approach these meetings in the future.” Conversations with Postman and others at WSLCB about their media approach would also continue, he stated, but “it's difficult to do communications sometimes…when it's a closed meeting” (audio - 2m, Video - WSLCB).

• Director of Licensing Becky Smith mentioned reducing a backlog of cannabis licensing changes, a local government ending a long-standing ban on cannabis retailers, and progress on social equity program licensing.
  • Smith previously talked about handling increased licensing changes due to relocation requests from businesses sited in areas impacted by legacy environmental pesticides, as well as a “hand’s off” approach to the social equity application scoring and prioritization process of vendor Ponder Diversity Group (PDG) on May 10th. Senior Education and Policy Manager Kaitlin Bamba provided a briefing about applications being processed by PDG at the prior EMT on June 14th.
    • On July 5th, several representatives of Black Excellence in Cannabis (BEC) expressed concerns with uploading necessary documents and the overall responsiveness of PDG staff.
  • Smith talked about “applications that were sitting there not a hundred days, but maybe like two years during the pandemic,” getting handled through a dedicated process developed by her staff. She stressed these weren’t “really brand new applications,” but had to do with adding new owners or transferring license ownership as well as changes of location. Smith described having “13 files that are over 90 days. Back in January when we started this process, we had 83 that were over 90 days” (audio - 1m, Video - WSLCB, presentation).
    • Smith added to her presentation that officials in the City of Pasco had voted to end a ban on cannabis retail sales on June 5th. She was excited since “we haven't seen a moratorium or ban lifted in, in quite some time,” and three retail title certificates in that region could get a license reinstated in the next six months. She added, “some of them have begun that process already” (audio - 2m, Video - WSLCB).
      • In October 2020, elected officials in Everett loosened restrictions on the number of retail locations in the city.
      • Board Member Ollie Garrett wondered if the change impacted any social equity applicants, but Smith didn’t know whether any title certificate holders also applied for an equity license (audio - 1m, Video - WSLCB).
  • Speaking to the status of social equity applications, Smith described how Aaron Washington, the recently hired Social Equity Manager, “keeps saying he's ‘drinking from the fire hose’ and constantly, that I want him to be a year in, and he's three weeks in, so…he's learning a lot.” She said that Washington would be presenting on July 19th to help the board members and public understand “what these next steps look like in [the] next couple of months, and…what to expect…as Ponder finishes up reviewing all of these applications.” Smith assured the group that Licensing staff would be ready to take on the scored and prioritized applications, saying “it's different than…the time that we did it before, and I will say it's a good difference” for agency staff across multiple divisions and the other parties involved (audio - 3m, Video - WSLCB).
    • Smith said they’d had a “fantastic” meeting with Washington State Office of Equity staff to get their input on Disproportionately Impacted Areas (DIAs). WSLCB staff had also shared changes due to passage of SB 5080 while gathering input on the applicant scoring rubric and community engagement, she commented. Smith further included that a letter on the equity program had been sent to the Office of Minority and Women’s Business Enterprises (WA OMWBE) relating to “how they play in the work of 5080 as well.”
      • Find out more from an agency publication about SB 5080 implementation published July 22nd.
    • Postman wanted the board to be able to talk with Licensing personnel “early in the process” to share their insights, “because we hear from people every day on, on this subject.” Smith agreed, and stressed that Garrett was part of the internal working group which had staff from Licensing “Finance, Communication, Rules, Research” and information technology (IT, audio - 1m, Video - WSLCB). 

• 18 months after launching the Cannabis Central Reporting System (CCRS) for product traceability, agency staff were questioning the "future of CCRS” and had published a request for information on alternatives, along with further systems modernization project (SMP) delays.
  • CCRS was first announced by WSLCB leaders in August 2021, stating the concept was “simplifying the state’s traceability system to reflect the growth and maturation of the cannabis industry as well as preparing for the future.” The transition to CCRS commenced that December accompanied by some public critique of the process. A second phase of the CCRS project was initially reported in February 2022 and the system was said to be "already much more usable" in September of that year.
  • On January 4th, Chief Information Officer George Williams noted a major update to the system would go live over some “concerns expressed by the integrator community as well as some of the licensee community.”
  • On Monday July 10th, WSLCB staff published a Request For Information (RFI) on procurement of another cannabis traceability platform.
  • Deputy Toni Hood called attention to the RFI “for the future of CCRS,” and noted responses were required by August 3rd. “They'll go through the regular process from there,” she commented, promising to “keep monitoring those because they could have an effect on the SMP project.” Hood recognized the need “to be very careful about how we approach those, and how they affect the whole agency, and that we don't over commit to a contract with another vendor that we could be bound by, and that could affect our ability to move forward with SMP.” Moreover, with staff already contractually bound to “release two” for SMP, she warned WSLCB leadership "can't overtax our people" (audio - 1m, Video - WSLCB).
    • At time of publication, the last CCRS outage was confirmed by agency staff on July 5th.
  • Turning to SMP, Hood acknowledged that “we weren't able to roll out in June as we wanted to.” She blamed “issues which I won't go into detail with, but it was kind of a mini roller coaster regarding what the issues were, whose issues there were, and how they could be fixed.” Hood credited staff for making “sure that Salesforce found the root cause of the problems and…they fixed them last week. We are doing our internal [user acceptance] testing this week. So far, everything's going fine.” This had them “currently on track to do release one on July 19th.” Though Hood saw that “this will put us behind for release number two at least three weeks, but I anticipate it'll be more…and that means that other projects have to be looked at down the road.” She promised to update on all project timelines into 2024 at the August 9th EMT (audio - 2m, Video - WSLCB).
    • A Washington State Office of the Chief Information Officer (OCIO) project dashboard for SMP included a July 6th assessment report stating the launch date was postponed “due to an access failure when unauthenticated users attempted to log in to the production environment,” and asserted the “issue is not related to LCB’s Salesforce (SF) configuration but rather is the result of an underlying problem in the behavior of the SF platform that was unknown to Accenture,” in addition to UAT and staffing challenges.
    • SMP began in September 2015 with a $3.3 million dollar budget request. Status reports and assessments on the dashboard show SMP encountered trouble in 2017, including delays and the loss of a vendor. Funding was carried over through legislation in 2019, and the agency sought nearly $18 million in a budget request in November 2021. On May 16th, Governor Jay Inslee signed a  biennial operating budget which included $35,278,000 to WSLCB for the project from the liquor revolving account.

• Director Will Lukela gave a swift update on his orientation to WSLCB, and another staffer acknowledged significant interest from state lawmakers in meeting the new WSLCB director.
  • Lukela gave brief remarks the day before. In EMT, he said it was "extremely busy [in] the first three days." Lukela didn’t elaborate beyond mentioning “onboarding” meetings, and how he continued to be “very excited to be part of the LCB team" (audio - 1m, Video - WSLCB). 
  • Director of Legislative Affairs Marc Webster pointed out one thing he was "hearing a lot" from legislators was “when can we sit down and meet with Will?” He considered this interest a “very positive sign” (audio - 2m, Video - WSLCB).