WSLCB - Board Caucus
(August 8, 2023)

Tuesday August 8, 2023 10:00 AM - 11:00 AM Observed
WSLCB Enforcement Logo

The three-member board of the Washington State Liquor and Cannabis Board (WSLCB) meets weekly in caucus to discuss current issues and receive invited briefings from agency staff.

Observations

The intention of staff to replace CCRS with a traceability system was questioned by board members, who next learned about the new staff and portfolio for the in-house research office.

Here are some observations from the Tuesday August 8th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

  • Director of Enforcement and Education Chandra Wax briefed on the request for information (RFI) the agency released related to replacing the Cannabis Central Reporting System (CCRS) with a third-party traceability vendor.
    • Members of the public called attention to the traceability-focused RFI on July 19th, encouraging more transparency and integrator engagement by WSLCB staff in any system change.
    • Wax explained that their current network, CCRS, was the “reporting mechanism that the industry uses to report all the steps that regulated cannabis plants and products follow throughout their lifespan, from seeding to retail sale.” The system had been used since December 2021 and was created “by the LCB with input from the industry,” she stated (audio - 4m, Video - TVW).
      • Wax stated that it had served “its intended purpose to bridge the gap between our former vendor’s product and LCB’s next traceability system,” but was never “never intended to be LCB’s long-term traceability solution.”
        • The initial announcement of CCRS didn’t suggest the system would serve on a temporary basis. In communications with Cannabis Observer Founder Gregory Foster, then-Chief Financial Officer (CFO) Jim Morgan and Chief Information Officer (CIO) George Williams indicated in August 2021 that CCRS would be the agency’s primary means for industry compliance reporting for the foreseeable future.
      • Wax continued, “While the reporting requirements are less stringent in CCRS than previous platforms…it's not fully meeting the needs of the industry, nor the LCB.” She then outlined several issues regulators perceived with CCRS:
        • “Industry members can't see what they have reported”
        • “Delays in data entry of an event occurring at a licensed business causes a delay in necessary enforcement or education actions”
        • “LCB IT staff say that CCRS can reasonably be expected to function for approximately one year, but with ongoing maintenance it can continue for additional years”
      • Mentioning the July RFI “to learn more about what services are available” to replace CCRS “for long term use,” Wax noted the agency “received responses from seven vendors.” Staff were reviewing the provided information to “determine a scope and propose an eventual decision package for a new traceability system…as we plan for what steps we should take to prepare for the 25-27 biennium.”
      • Wax promised to listen to stakeholders, “including licensees, labs, integrators, other state agencies, LCB staff, our board, and lawmakers.” Staff would also leverage “information gathered from the prior cannabis [Traceability 2.0] work group and determine the needs of traceability for Washington State prior to issuing” any request for proposals (RFP), she said. Wax added that WSLCB might hire consultants “to support this process.”
      • “The key reason we're not pursuing CCRS’s replacement now is because the agency cannot build this new traceability system while we are also building phase three of SMP, our systems modernization project,” Wax told the board. The third phase of the long running project was the “enforcement and education phase” which staff would be working on in “late spring or summer of 2024,” she explained.
      • Wax promised WSLCB officials would be “committed to communicating with licensees, labs, and integrators when we build the scope and pursue the decision package and eventually the RFP.” She welcomed feedback from stakeholders, who had been “valuable in testing and providing feedback” when deploying CCRS.
    • Board Chair David Postman wondered if there was a way to ensure when implementing the enforcement and education phase of SMP, that their new system "ha[d] some flexibility built into it" to support subsequent traceability software. Board Member Jim Vollendroff echoed this concern (audio - 4m, Video - TVW).
      • Wax first highlighted how SMP and CCRS didn’t interface, but that was being considered “for the scope of both systems.” Her staff wanted to leverage “technology to our advantage instead of simply just recreating what we have.” She continued, remarking that staff were discussing the question and ensuring it was in the scope of SMP and any RFPs “to see if those…are ways that we can be more efficient and effective.” Wax mentioned having a desired “capability where some of the data that we use for education for a particular case feeds into our reporting systems so that the officer, or the compliance consultant, doesn't have to retype all that.”
      • Postman worried the “flexibility” of a new traceability platform would be limited once phase three of SMP was implemented, “because those sorts of things happen sometimes.” Wax mentioned that “delaying [traceability] a little bit will help with the timing to make sure that we can look at that.”
      • In looking for a traceability vendor, Postman saw an opportunity for “really in-depth front end work of seeking feedback from licensees, integrators,” as well as “talking internally to see the needs of all the divisions, integrating with SMP,” or hiring a consultant for “really robust” engagement. “I completely agree, Board Chair,” Wax replied, deeming it “really work we need to do and…we're just building time in the project to do some research and stakeholder work.”
    • Postman acknowledged that CCRS "was not meant to be permanent" but asked staff to consider its longer-term viability: could it be modernized or used in some way going forward? Wax assured him that there would be “things that we do to keep it up to date…moving forward, and then are there things to make it more useful for our licensees and staff in the interim” (audio - 3m, Video - TVW).
      • Postman wondered whether making CCRS into a permanent reporting solution for WSLCB would be included as an option, just in case “that seems to be the best one.” Wax understood what he was saying, but cautioned she had “never seen the agency refer to hanging on to CCRS as a potential long-term solution as one of our options.” She indicated that staff were “writing the scope for the project and the charter right now,” and if CCRS viability should be contemplated later on, “we need to write that in right now.” Postman felt it was appropriate to solicit some stakeholder feedback before “we write that down…in stone.”
    • Vollendroff brought up the inclusion of board members in the internal work on traceability as they had “varying degrees of experience” in reviewing and developing RFIs and RFPs, curious whether there was “a role for board members moving forward in any part of the process of review and development” of the requests. “Our board is listed as a stakeholder,” Wax said, “as we move forward to finalize the charter and all of those things, we will involve you in that” (audio - 1m, Video - TVW)
  • Hoffman provided a research update on the group’s new role at WSLCB, touching on internal and external outreach, prioritizing research topics, collaborating with other agencies, and government counterparts in the Cannabis Regulators Association (CANNRA, audio - 6m, Video - TVW).

Timeline

Segment - 01 - Welcome - David Postman (13s) InfoSet ]
Segment - 02 - Update - CCRS - Chandra Wax (3m 57s) InfoSet ]
Segment - 03 - Update - CCRS - Question - SMP Integration - David Postman (3m 46s) InfoSet ]
Segment - 04 - Update - CCRS - Question - Long-Term Viability - David Postman (2m 32s) InfoSet ]
Segment - 05 - Update - CCRS - Question - Board Inclusion - Jim Vollendroff (59s) InfoSet ]
Segment - 06 - Update - Research - Kathy Hoffman (56s) InfoSet ]
Segment - 07 - Update - Research - Introduction of Sarah Okey - Kathy Hoffman (1m 10s) InfoSet ]
Segment - 08 - Update - Research - Introduction of Stephen Ziegler - Kathy Hoffman (1m 13s) InfoSet ]
Segment - 09 - Update - Research - Introductions - Comment - David Postman (30s) InfoSet ]
Segment - 10 - Update - Research - Introductions - Question - Framing of Agency Regulatory Role - Jim Vollendroff (4m 56s) InfoSet ]
Segment - 11 - Update - Research - Kathy Hoffman (5m 50s) InfoSet ]
Segment - 12 - Wrapping Up - David Postman (41s) InfoSet ]

Engagement Options

In-Person

1025 Union Ave SE, Olympia, WA 98501, USA

Boardroom

Information Set