WSLCB - Webinar - Agency Request Legislation Proposals
(August 21, 2023)

Here are some observations from the Monday August 21st Washington State Liquor and Cannabis Board (WSLCB) on three potential agency request legislation proposals.

My top 3 takeaways:

• WSLCB leaders had been presenting possible bills they would pursue as agency request legislation for the 2024 legislative session to stakeholders and the public.
  • Director of Policy and External Affairs Justin Nordhorn presented outlines for potential request legislation during prior webinars on August 11th and August 17th. If agency staff chose to move forward, they would seek approval from the Washington State Office of Financial Management and Governor’s office.
    • Nordhorn also mentioned the draft bill ideas in the August 9th Executive Management Team meeting.
  • Officials accepted email comments on the concepts until August 25th.

• Director of Policy and External Affairs Justin Nordhorn acknowledged that with minimal outside support, contract growing for registered patients was unlikely to be moved forward in the request legislation process (audio - 5m).
  • The draft request bill would allow patients in the Washington State Department of Health (DOH) medical cannabis database to enter into contracts with licensed producers to grow cannabis on their behalf. The idea elicited stakeholder hesitation on August 11th and some licensee pushback on August 17th.
  • Similar to the previous webinars, Nordhorn established that the intention of officials had been to build on existing policies to improve patient access options by allowing them to become more familiar with their growers without adding a tax structure. However, “the overall feedback that we've actually received on this” was largely skeptical that the bill would help access or lower costs to the patient, he said, “so…this particular proposal is likely to not move forward.” Nordhorn opened the floor to any final comments.
  • Caitlein Ryan, The Cannabis Alliance Executive Director, stated that “overall the feedback that I'm getting” was that “the details could use some attention,” but “everybody is really pleased and heartened to hear that LCB is looking at patient needs and trying to problem solve for folks who are trying to find medicine.” She also recognized they were working towards “bringing folks together in ways that are meaningful.” She commended WSLCB staff “for taking a look at that front and keeping this conversation so open and dynamic so that we can hopefully come to an ideal solution together” (audio - 2m).
    • Nordorn thanked her, remarking regulators were “definitely open to ideas…on how to either fine-tune [the contract growing proposal] or even new ideas.” While it was too late for WSLCB leaders to “put another proposal together, as we have a process that we have to go through to get approval for those,” they welcomed ideas for the future.

• Nordhorn spent more time explaining the concept behind a draft request bill on cannabis advertising changes, and got feedback from a substance prevention advocate and cannabis trade group leader.
  • The proposed request legislation would bring about a bevy of updates to exterior cannabis signage limits and placement, covering retail trade name signs, brand advertisements, and billboards. Two industry representatives and a member of the public addressed the potential request bill on August 11th, followed by a retailer who gave input on August 17th.
  • As he was delving into the justification for the concept bill, Nordhorn touched on some new details around advertising and the proposal (audio - 10m).
    • Nordhorn said when WSLCB personnel reached out to “businesses that sell signage” to find out about “standard signage…the most common average size of a trade name sign is around 6,915 square inches. So we rounded up to 7,000 square inches for a trade name, sign and built in the opportunity of using multiple trade name signs on the building.”
    • Nordhorn asserted that as a request bill, the proposal would allow “exterior pylons and monuments signs, which folks also were…trying to utilize and want as one of their…allowable signs.”
    • While the numbers of exterior ads would increase, he noted that the request bill would permit stores with medical cannabis endorsements to “have two additional signs that would be geared towards medical patients’ awareness,” intended to motivate compliance and participation in the endorsement system. Although, Nordhorn had heard “feedback on that” leaving him unsure where “the discussion will, will take us.”
    • Billboards for a retailer would have to be at least 1,000 feet from their premises, “which [was] 0.19 miles or three city blocks,” described Nordhorn.
    • There had also been input on the draft “around the definitional proposal on a licensed premises,” he commented, but the intent of staff had been for “the licensed premises [to] be considered the parcel, and so you'd be able to have those advertising not just on your your storefront, but you'd be able to move it out…if you're in a strip mall, you'll be able to have it on the end, or something like that.” Trade name sign changes aimed to “provide more flexibility and greater allowance for the sign placement of the trade names.”
    • Restrictions on cannabis advertising would be “on par with a normal business, and considering it's still an age restricted product, aligning it with other age restricted product regulations” while keeping focus on not cross-promoting substances like tobacco or alcohol with cannabis, as Washington authorities were concerned about polydrug use. Similarly, staff wanted laws to keep from showing cannabis “in any association with driving a motor vehicle…we don't want to see…anything that kind of gives a perception that it's okay to drive after consuming cannabis.”
    • The board opened rulemaking on advertising in August 2022, although officials declared the project was “paused” as of April 11th.
  • Scott Waller, Washington Association on Substance Abuse and Violence Prevention (WASAVP) Member and Former Washington Traffic Safety Commission (WTSC) Tribal Liaison, posed two questions to Nordhorn. He also emphasized that his organization hadn’t taken a position on the proposal (audio - 6m).
    • First on the “actual number of allowable signs, which could be five on a single business,” Waller felt it was “just not quite clear as to why that's not more in line with, with alcohol regulation, which is four.” He wondered about giving endorsed stores a “choice of mix and match in terms of the content of…those four signs.” Nordhorn replied that the change was about improving the medical cannabis program by increasing use of the DOH registry by patients, and motivating compliance with medical endorsement rules by businesses. Additionally, stores were allowed in rule to donate cannabis to registered patients or designated providers, and could be able to advertise that fact, he remarked. Nordhorn promised Waller that staff would be “considering those types of comments, but the purpose behind it was to try to figure out some incentive” for medical program engagement by patients and endorsed stores.
    • Next, on the trade name signs, Waller said he interpreted the change in signs to mean “there could be a trade name sign on each independent side of the business, and so standalone businesses could have four trade names signs and that seems [like] quite an expansion.” He thought two trade name signs would be a “more prudent” expansion of licensee rights. Nordhorn asked “if you do have a standalone building, that has” public access “from multiple sides, should you…have the opportunity to post your trade name” on each side of your store to aide public awareness of it? He welcomed Waller and others to submit comments on what advertisement changes they supported, as WSLCB officials were seeking “some…commonality before it goes to [the] legislature.” 
  • Nordhorn brought up an unpassed 2023 bill that would have moved advertising oversight towards greater local control, “and so we're assuming that'll probably run again” in 2024. If approved as a request bill, the WSLCB change would offer “another option…but keep in mind, if you do take away just one number like the number of signs, you're going to have a whole bunch of signs that can be utilized; if you take away the size of the sign and keep the number, then you're just going to have really big signs,” he said, suggesting standards on these points “go hand-in-hand.” The idea of favoring local control of cannabis advertising over State control was “not new for us, but we're taking a look at this from what we believe would be a reasonable approach” given other restricted substance ad rules, Nordhorn added (audio - 3m).
  • Waller then asked whether the potential request bill would limit local authority around cannabis advertising, or preempt Washington municipality power over regulated signage. Nordhorn relayed that WSLCB statutes and rules on signs were formulated as a State standard but “local jurisdictions can always make things more restrictive than the state, and they would be responsible for the oversight of that.” He noted this was similar to alcohol laws, where “we still have a community or two in the state that don't participate in Sunday sales of alcohol, and so that's what they have done through local ordinance and jurisdiction.” Locals couldn’t “broaden the approach with this particular language” for cannabis (audio - 2m).
  • Ryan called attention to the advertising expansion for medically endorsed retailers, wondering if there would be more oversight of compliance with rules in order for an endorsement holder to have expanded advertising privileges. Nordhorn answered that officials had been looking into endorsed retailers, and staff were contemplating additional rules to ensure compliance, so he anticipated “this would be an additional statutory foundation that…would also strengthen that” as part of “a multiple pronged approach to that issue. It's not one or the other” (audio - 2m).
    • WSLCB staff had been studying medical endorsement compliance and policies publicly since November 2022, and board members responded positively to a petition seeking enforcement of requirements for endorsement holders on March 28th. Staff discussed the topic on May 2nd, indicating it was among the projects on hold, with the most recent prior mention on August 9th.