WSLCB - Board Caucus
(October 3, 2023)

Here are some observations from the Tuesday October 3rd Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• In her last WSLCB briefing, Research Manager Kathy Hoffman spoke about how the Research Unit she’d established would organize and prioritize work topics going forward.
  • Hoffman and Research Unit staff reviewed how standing up the office was going on September 26th.
  • “Since this is my last caucus and the team won't be reporting out from here on out,” Hoffman laid out the Research Unit plan for “a 30/60/90-day plan” which “charts our pathway forward in terms of setting up infrastructure” (audio - 1m, Video - TVW, Video - WSLCB).
  • Operational Research Specialist Sarah Okey further explained staff were investigating “how to take the policy prioritization tool [Hoffman mentioned August 29th] and form it into something that will work to figure out how to prioritize all of the great research topics that, that management and that different directors…asked for.” She intended to have “a working draft that we will be discussing” at a future management team meeting, audio - 1m, Video - TVW, Video - WSLCB).

• Staff described preparing two different analyses of cannabis license density in accordance with a legislative mandate to consider the amount of stores which could be added to the social equity licensing program in light of population changes.
  • Research Analyst Steve Ziegler briefly said the analyses were being conducted as required by SB 5080, “as relates to outlet density, as well as the statutory requirements concerning those thresholds” (audio - <1m,  Video - TVW, Video - WSLCB).
    • Passed on May 1st, SB 5080 incorporated many modifications to the established equity program, including considering ‘outlet density’ if local governments formally object to cannabis business approval or renewal. Section 3(1)(c) stated lawmakers may add additional cannabis licenses and required WSLCB to “adopt rules establishing a threshold of the number of licenses created by this section that can be located in each county,” though equity licenses may be located in any county which permits them. A rulemaking project implementing the law was scheduled to be initiated by the board on October 25th.
    • The most recent public update on the status of equity retail licensing was at the September 27th board meeting.
  • “I've completed a proposed two-part methodology,” stated Hoffman, intending to “determine threshold consistent with Senate Bill 5080…the team anticipate[d] that work to be done by the end of October” (audio - <1m, Video - TVW, Video - WSLCB).
  • Board Chair David Postman asked Hoffman to “help explain for the public what it is we've come up with,” elaborating that there were two projects under development on “how many outlets somebody might be able to absorb based on population growth, and the outlet density…Steve was just talking about” (audio - 2m,  Video - TVW, Video - WSLCB).
    • Hoffman’s “two-part methodology” featured a “proration formula that looks at the percentage of population growth compared to the number of licenses that are currently issued.” She conveyed this would “be different for producer/processors than it's going to be for retailers.” The new number of licenses was calculated “based on that percentage of population growth and subtract the actual number of licenses to come up with a possible number of licenses.”
    • Postman emphasized that the numbers this methodology came up with were non-binding, meant to inform local authorities about the number of licenses WSLCB believed a jurisdiction could support, “and then it's up to them to [alter the number of, or zoning for cannabis businesses] or not.” Hoffman remarked SB 5080 implementation rule language would describe the methodology as "a threshold for licenses that can be placed.”
  • Postman then asked Ziegler for more information about his project. Ziegler pointed to RCW 69.50.335 and 345 as covering outlet density, stating “the question becomes what is the maximum” number of retailers for a “variety of reasons, whether it be public health or otherwise.” He said concentration of retail access “could be positive, it creates competition, but at the same time it might have negative outcomes in terms of increased use, advertising exposure to, to minors…so that's what I'm currently working on” (audio - 2m,  Video - TVW, Video - WSLCB).
    • Postman compared this with work undertaken by the Washington State Institute for Public Policy which released a third installment of required reporting on cannabis legalization in early September “where they're making…a suggestion that…more outlets in an area could be contributing to higher use” of cannabis, “or other data that might show us what's happening related to that.” Zeigler noted that outlet density was mostly controlled by local governments. Postman again highlighted that the WSLCB findings on license density would be advisory only.
    • Outlet density was a topic in deliberations on SB 5080. Additionally, the Washington State Health Care Authority released materials about “Balancing commerce and public health in disadvantaged communities” on September 8th.

• The Cannabinoid Science Work Group, staff contributions to a cannabis law publication, and Hoffman’s notes from a Colorado research conference received passing mentions throughout her update.
  • Hoffman relayed she and Okey would co-lead the Cannabinoid Science Work Group meeting set for Thursday October 5th, after which point Okey would take over leadership of the group. Hoffman told board members their draft report of recommendations was almost completed (audio - <1m, Video - TVW, Video - WSLCB).
  • Hoffman announced that she and Public Health Education Liaison Mary Segawa contributed to the third edition of the Cannabis Law Deskbook. She brought up that her editing of the book would continue as she transitioned over to WA LNI, commenting there was “interest from Thomson Reuters in getting a national perspective and I think that could help more than one agency.” Hoffman addressed topics related to (audio - 2m, Video - TVW, Video - WSLCB):
    • “Core licensing; core license types; packaging and labeling; and rulemaking”
    • “On the license chapter there's a whole lot of content that I added with respect to social equity programs and then some of the litigation trends around that,” plus “several updates to cases that I've written about previously on common license denial themes that we see”
    • “Updates…mostly coming from the East Coast on the packaging and labeling chapter” covering several “new product types”
    • “There's an extensive update on intellectual property and trademarks that may be interesting to people because we're seeing a lot of activity happening with branding and trademarking…there's a lot of crossover there we're seeing now, and there's a lot of litigation around that”
    • “With respect to rulemaking there's an update about how to do collaborative rule making in a virtual environment and what we've learned over and what we’ve learned [inaudible] existing in that environment”
    • Postman noted that he looked forward to getting copies of the revised book. “It'll be really helpful for folks to have that at their fingertips,” Hoffman remarked, even as “everything just changes so quickly with cannabis” (audio - 1m, Video - TVW, Video - WSLCB).
  • “Finally, I was going to do an EMT [ executive management team meeting ] presentation” on October 11th covering “everything that I learned” weeks earlier “at the Cannabis Research Conference in Colorado,” Hoffman said. But due to her taking on a new job, she would instead give “a written update” to board members and division leaders (audio - <1m,  Video - TVW, Video - WSLCB).