WSLCB - Board Caucus
(September 5, 2023)

Here are some observations from the Tuesday September 7th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Director of Policy and External Affairs Justin Nordhorn relayed that the idea of contract growing by producers for registered medical cannabis patients hadn’t garnered enough support to be worth proposing as a possible request bill (audio - 2m, Video - TVW, Video - WSLCB).
  • The draft concept for contract growing was poorly received by patients and licensees during webinars on August 11th and August 17th. At the third webinar on August 21st, Nordhorn candidly stated that without stakeholders in favor, WSLCB leaders wouldn’t advance the proposal for approval by the Governor’s office and Washington State Office of Financial Management (WA OFM) staff.
  • In caucus, Nordhorn relayed that with a “significant amount of feedback” at the webinars and emailed to staff about the concept, “none of them were very supportive of it” and the policy was “not worth moving forward.”

• A request bill concept which would create an administrative sanction process at WSLCB regardingalcohol sales to a minor evoked a number of comparisons to cannabis laws and rules.
  • Nordhorn previously explained the specifics of a request bill to create a sanction process for retail store staff who sold alcohol to minors. He argued it could more consistently be applied than existing municipal criminal prosecutions and their proposal would include training aimed at reducing repeat sales that was more effective than the store hiring new sales staff.
    • Although individuals serving or supervising alcohol in bars or restaurants in Washington state are required to have Mandatory Alcohol Server Training (MAST), employees working checkout counters in retail stores aren’t and training on alcohol sales is the responsibility of the retailer. However, WSLCB does have a voluntary responsible vendor program.
  • In reviewing the alcohol request bill draft, Nordhorn suggested the administrative sanction was based on a similar class adopted in rule for first offenses of underage tobacco sales in lieu of a monetary penalty. Some jurisdictions had stiff fines and penalties for individuals who were charged with the offense, but others routinely deferred prosecutions, Nordhorn commented. An administrative process could ensure retail sales to minors were treated equally, he asserted, plus criminal penalties remained possible in cases of “multiple, or repeat violations.” There had been “far fewer comments” on this proposal, Nordhorn acknowledged, describing stakeholder reception of the idea as mixed. Some business representatives perceived little impact and the participating public health voices cautioned the seriousness of the offense could be “diminished” by a non-criminal route. He welcomed board member feedback (audio - 5m, Video - TVW, Video - WSLCB).
    • Board Member Jim Vollendroff felt the priority remained keeping alcohol from being furnished to those under 21, something “preventable almost always.” He viewed the draft request bill as helping with consistent enforcement through a “civil process,” rather than arrests (audio - 2m,  Video - TVW, Video - WSLCB)
    • Board Chair David Postman believed the idea “replace[d] theoretical criminal charges with real administrative penalties,” allowing for “stricter” actions for non-criminal penalties. He said the draft bill was a “good step,” but should be followed up with a broader review of penalties, and “more stringent on the licensee side” with repeat offenders (audio - 2m, Video - TVW, Video - WSLCB).
  • Vollendroff turned the conversation to how underage sales by retailers were handled for cannabis. Nordhorn was clear that the subject hadn’t been reviewed when developing the proposal. He indicated that underage sales had been a felony offense for budtenders initially, and that some local governments followed through with prosecuting those offenses. However, Nordhorn clarified a 2019 law modified this to a gross misdemeanor in statute, though cannabis sales or delivery to a minor remained a felony if it occurred outside of a licensed retailer (audio - 4m, Video - TVW, Video - WSLCB).
    • Moreover, “when we look at the need for the compliance rates, cannabis does really well under the current program,” Nordhorn remarked, “whereas the alcohol side…what other tools can we have to try to increase” compliance had been a central question in crafting the proposal.
    • Feeling consistency was important, Vollendroff was curious how “district court handling” of cannabis and alcohol compared. Nordhorn had no data on that, but as a former Enforcement Chief for WSLCB, he told Vollendroff those cases could vary based on factors like a local prosecutors’ budget or caseload.
  • Postman inquired about the “internal feedback” from the Enforcement and Public Health staff at WSLCB. Nordhorn replied that the concept for the request bill had come out of those offices, though there was some division among enforcement staff “concerned that loosening up, or lightening up from a criminal citation into an administrative citation sends a softer message on the importance of youth access compliance.” Postman understood the reaction, but felt that because “nothing” was happening in some situations, that view oversimplified the problem being addressed (audio - 1m,  Video - TVW, Video - WSLCB).
  • Board Member Ollie Garrett speculated that local inaction on prosecutions for cannabis sales to minors was somehow related to Governor Jay Inslee’s Marijuana Justice Initiative, a 2019 program to vacate certain State-level cannabis convictions. However, Postman noted this was aimed at possession convictions which preceded voter approval of legal cannabis in 2012, and that “there are some jurisdictions in our state who don't want to do anything related to cannabis…even inversion, and illegal grows and things, and what we hear is, ‘well, you guys legalized it.’” He felt there was consensus for moving forward with seeking a request bill on alcohol sales to minors (audio - 2m,  Video - TVW, Video - WSLCB).

• Nordhorn discussed changes to the conceptual cannabis advertising request bill and how moving ahead with the idea might impact action on previously introduced advertising legislation in the upcoming 2024 legislative session.
  • The concept to modify cannabis advertising laws related to the number, type, and sizing of exterior retail signage and advertisements was previously discussed during webinars on August 11th, August 17th, and August 21st.
  • In caucus, Nordhorn reviewed the draft request legislation which aimed to have regulations modified toward greater alignment with alcohol advertising and to reduce the number of advertising-based complaints fielded by WSLCB Enforcement. He commented that staff had made subsequent revisions to the potential language (audio - 6m, Video - TVW, Video - WSLCB).
    • After a “considerable amount of feedback from stakeholders” regarding a new distance requirement for use of billboards to advertise a retailer, the section was removed. Nordhorn mentioned that “feedback on trying to do the measurements, distance and that, would potentially complicate issues” like existing billboard leases.
    • “We also removed a provision” permitting businesses to place trade name signs “on their property and not just on the building,” Nordhorn remarked, specifically on “monument/pylons signs” not directly affixed to a retailer’s building. The modified definition they’d offered led to confusion, he said, and “we actually removed that language,” redrafting it so that retailers could go from “two signs to four signs for advertising, and then having in addition to that trade name signs, that would be eligible to be two on the building and an additional pylon or monument sign out in front…so you'd end up having seven potential signs total at a cannabis retail location.”
    • Planned incentives for medically endorsed retailers to be permitted an additional advertising sign was also taken out, Nordhorn reported, as it had been “looked upon as confusing and why not just make it like alcohol, and that came from not only industry members but also from our public health stakeholders.”
      • Postman remarked that the increase in signs from two to seven “seem[ed] like a lot,” and he didn’t like removing the billboard change, though he agreed it was time to “evolve” cannabis advertising standards (audio - <1m, Video - TVW, Video - WSLCB).
  • Nordhorn discussed some of the concepts which had motivated the proposal, like trying to “loosen this up in a number of different ways, and then we also tried to strengthen the areas for the State interest.” This meant clarifications that cannabis “advertising can't be correlated with alcohol, can't be correlated with tobacco, and can't be correlated with vehicles or driving,” he told the board (audio - 3m, Video - TVW, Video - WSLCB).
    • A challenge Nordhorn observed was that licensees “want specifics, but then when they see some of the measurements,” they would tell agency staff “that's too complicated.” He felt specifics and complications went hand-in-hand.
    • He also pointed out that “there was a bill last year that is still active in the legislature, and that was Senate Bill 5363, and that had to do with advertising.” Nordhorn commented the bill “basically said the Liquor and Cannabis Board cannot enforce size on signs and that's it,” the bill “didn't deal with the number of signs; it didn't deal with a number of the other types of Interest points…it was very fairly small in scope.” He shared “some comments that have been made around” amending SB 5363 with language agency personnel drafted instead of offering another measure. While Nordhorn was amenable to that approach, he asked, “do we want to propose something to have as a backup to showcase that…the board is interested in looking at some deregulation in this area.” He suggested there could be “collaboration with industry to figure out what parts of this we'd be able to weave into the existing bill.”
    • “There's still some points that folks are calling out that are potential confusion. I'm going to look at that today before we finalize if we're moving forward,” added Nordhorn.
  • Calling it a “good conversation to have,” Vollendroff relayed his general impression that “stricter cannabis advertising regulations are good public policy.” He verified that Director of Enforcement and Education Chandra Wax was on board with the conceptual draft bill, as he knew her staff had “challenges” dealing with advertising in the field. Vollendroff argued the topic was a good one to “use our new research team, to help us work with people who do research on…cannabis advertising and communities. And what does the research tell us, and then look at what the research tells us compared to this proposed legislation, and see if they align in a way that supports good public policy.” He concluded, “I don't know what the right thing to do is here, but I do think it's a good conversation for us to be having” (audio - 2m,  Video - TVW, Video - WSLCB).
  • Garrett spoke in favor of having their own request bill ready, recognizing that consistency in advertising had been something she’d first gotten complaints about “years ago.” She then mentioned “from what I understand—and Justin you can help me with this—that…Washington State had the most strictest signs…rules when it came to advertising.” Nordhorn called her assessment “correct” (audio - 1m, Video - TVW, Video - WSLCB).
    • Articles comparing state-level cannabis advertising regulations have been published by sites such as Leafly, Where’s Weed, and Cannasite.
  • Postman advised contacting SB 5363 sponsoring Senator Drew MacEwen to “see what he’s thinking” and where there was “flexibility.” Additionally, he wanted to “keep public health at the table” as well as industry leaders when moving forward on a possible request bill (audio - 4m, Video - TVW, Video - WSLCB).
    • He was also curious why MacEwen’s bill was passed by the senate unanimously, yet didn’t gain traction in the Washington State House of Representatives, “what is the message there?” Postman speculated SB 5363 could have been regarded as “sort of a half step but gives that enforcement of the sign code to locals.” He wanted to “keep talking to members” to find out what they were “going for, because you could see two different people voting for that bill thinking…two different approaches about what they're getting from it.”
    • Postman was opposed to a “local option” whereby municipalities could determine whether local governments, or WSLCB, would enforce local advertising laws. “I think that would be paralyzing for our enforcement team” to have to remember different advertising standards based on county or city boundaries. Garrett wondered if the local option was based on industry representatives who believed WSLCB wasn’t consistently applying advertising rules.
    • Board members signaled they were in agreement with advancing the concept to the governor’s and WA OFM staff for approval as a 2024 request bill.
    • Nordhorn chimed in to say that local governments could have advertising rules in addition to those from the agency, however WSLCB rules were a “baseline,” and enforcing stricter standards should be the responsibility of authorities in the enacting jurisdiction, rather than agency officials (audio - 1m, Video - TVW, Video - WSLCB).
  • Near the end of the conversation, Postman noted Washington State Institute for Public Policy (WSIPP) researchers had published their third required report on the impact of Initiative 502 and legal cannabis. He indicated that although the research only went to 2019—to avoid analyzing changes during the coronavirus pandemic—“one of their big takeaways is that they find a connection between a cannabis store in the neighborhood, and use and I believe, overuse of cannabis.” Postman wanted someone from WSIPP to give them a briefing, since “if that's true and we're saying that people who have a cannabis store in their neighborhood are using more than people elsewhere, how does advertising that store play into that?” He was curious if there was a way to know whether “those numbers were not the same pre-legalization in terms of more dense urban area or…an economic area or whatever it is” (audio - 2m, Video - TVW, Video - WSLCB).
    • On March 9th, WSIPP representatives went over their prior cannabis publications, and the then-upcoming third report with lawmakers.
    • The day after the caucus on September 6th, the WSIPP board of directors published the agenda for their next meeting on Monday September 11th, which included a presentation by Amani Rashid, Senior Research Associate, on “Initiative 502 and Cannabis-Related Public Health and Safety Outcomes.”
    • Find out more from supplemental technical reports released along with the third required report:
      • The Relationship Between Initiative 502 and Reported Substance Use
      • Licensed Cannabis Retail Access and Traffic Fatalities
      • Initiative 502 and Cannabis-Related Convictions
      • Licensed Cannabis Retail Access and Substance Use Disorder Diagnoses