WSLCB - Focus Group - Product Samples
(October 6, 2023)

Here are some observations from the Friday October 6th Washington State Liquor and Cannabis Board (WSLCB) focus group on the Product Samples rulemaking project.

My top 3 takeaways:

• Policy and Rules Manager Cassidy West gave a bit of background about her cannabis industry work before WSLCB and the goal of the focus group to brainstorm regulatory improvements to existing cannabis sampling rules.
  • While cannabis samples cannot be provided to the public, licensed producers and processors use product samples for internal review, and as part of promoting their items to be carried by licensed retailers. Retailers also leverage samples to familiarize budtenders with their inventory with the goal of helping inform customers about their impact.
  • Although the rulemaking project was initiated on March 1st based on a petition submitted in August 2022 from the Washington CannaBusiness Association (WACA), the issue was part of an agency rulemaking agenda which had been delayed during turnover in the Policy and Rules team. West had begun updating on this project in tandem with rulemaking to implementSB 5357, a law pertaining to tetrahydrocannabinol (THC) regulations.
    • When they accepted the petition, Board Chair David Postman took issue with the idea of samples as educational, preferring the term “marketing” samples.
    • The first focus group on product samples was facilitated by WSLCB staff on March 22nd.
  • Greeting focus group participants, West described moving into her post in July after joining WSLCB as a Policy and Rules Coordinator late in 2022 (audio - 1m).
    • “I started working in cannabis in 2014 in the private sector as a policy analyst for a law firm. It's based in Colorado, Vicente Sederberg [LLP],” she said, indicating the firm was a drafter of that state’s legalization initiative, Amendment 64. West had been part of establishing the firm’s cannabis compliance speciality, “helping [businesses] navigate the regulatory landscape.” Her work primarily involved Colorado, “but I've worked a lot with businesses in California, Oregon, Maryland, and Nevada.”
    • West noted that she’d worked as Director of Compliance for Schratter Foods—though they “got bought out shortly after” by a Florida company, Anco Fine Cheese—and ran her own consulting firm in Colorado “doing pretty much the same thing that I had been doing at the law firm.”
    • She added that “this is my first time on this side of the table, and I'm really excited to be here, and really look forward to working with…everyone.”
  • The event had been organized to host “a collaborative discussion on a new proposed regulatory framework for vendor and educational sampling,” stated West. She mentioned that staff would lead “separate stakeholder engagement for internal quality control samples for producer/processors at a later time.” West said the “brainstorming session” would inform conceptual draft rules, but made clear she wasn’t promising suggested changes would be included. “The goal is to simplify the regulatory framework and provide licensees additional flexibility while also ensuring that the public health and safety remain an utmost priority,” she told attendees (audio - 1m, screenshots).

• Staff went over topics related to vendor and educational samples—singularly called ‘trade samples’---and addressed a few questions as they gathered stakeholder responses.
  • Trade Samples (audio - 3m)
    • “Rather than having the two separate categories of vendor and educational samples,” West reported that staff may propose to “collapse the sampling into one category and create a new definition: trade samples, which would be used for the purpose of negotiating the sale and in educating employees.” She pointed out that authorities in California and Oregon already had similar rules.
    • After showing a presentation with a draft definition for trade samples, including mentions of definitions for ‘new product’ and ‘new business relationship,’ West relayed that “we don't want samples to be provided on products that are already being sold,” but only for promotion of new products. She then opened the floor to comments on the terminology shift.
    • Jonathan S. was curious if both new products and new business relationships needed to be defined since “that gets kind of murky.” West felt this covered both types of samples, because a “trade sample that could also be provided to employees on that new product to educate them,” could then be provided to budtenders if a retailer chose to stock a product (audio - 4m).
      • West stressed that the single definition for trade samples wouldn’t keep it from serving “multiple purposes.” She planned to talk later about “providing samples for employees, or new employees that come in on your existing inventory.”
      • Jonathan was concerned “from the producer/processor side that that opens the door for a store to demand” samples as a prerequisite for a sale “and I would think that that's antithetical to the, the policies you're trying to…put together.” West asked for clarification, and Jonathan hypothesized that as a processor, someone purchasing on behalf of a retailer would be able to argue “we need a hundred samples with that first order…or with every order.” He worried because “in my experience right now the power rests with the retailer to determine the conditions of a sale.”
    • Sami Saad, who last spoke to board members on September 13th, remarked that samples were important because even when growing “the same strain [a producer was] affecting the quality because maybe it's not been growing good this time.” He didn’t need many samples, he said, “but every time the product [was] going to those retailer[s] it ha[d] to have sample[s].” As a former medical dispensary owner, Saad emphasized “we always have major people, they test our products.” He appreciated Jonathan’s hesitation over being forced to give too many samples, but Saad felt sampling was crucial to deciding if a producer or processor was “growing a better quality” (audio - 3m).
    • Teresa, “a retailer,” provided her thoughts that it wasn’t “a great idea to lump educational samples and vendor samples together.” Vendor samples were for “product we don't carry in the store, and educational samples [were] for products that we do carry in the store.” She considered educational samples for her budtenders to be “imperative” for them to “be able to tell the customers what the product is, what it's like…and budtenders cannot always afford to buy everything that's brand new.” Teresa noted she wasn’t opposed to “paying for samples to producer/processors as long as it's a very nominal amount that I can afford” (audio - 7m).
      • “When it first became recreational, producer/processors were selling us educational samples for a buck,” Teresa said. “The problem was that the samples came…packaged in exactly the same as what was for sale for the general public,” and she alleged “many retailers were…buying a lot of educational samples for a buck and selling them to the public, which means an unfair practice for everybody else trying to follow the law.”
      • Teresa urged mandating “all samples are on a separate manifest” with distinct packaging requirements to differentiate them from retail items.  She added that products distributed with educational samples tended to sell better, stating her current approach was to distribute educational samples to staff with their paychecks so “they get recorded and followed exactly.”
      • Vendor samples were also rated by staff, she commented, and “if everybody likes it we bring it in the store. If nobody likes that we don't…but it's also helped us deal with our” telling processors “nobody liked this product. Here's what's wrong with it.” Teresa mentioned having provided feedback to a vapor cartridge manufacturer “and now they're a great big country company that's doing really well because we were able to help.”
      • West thanked her and reiterated “we will talk about…being able to provide your employee samples of product that you are already carrying so that they can sell those.”
  • Sample Packaging and Labeling (PAL, audio - 2m)
    • Looking at the PAL requirements for sample packaging, West commented that “we want to make them representative of the product.” Eliminating dedicated sample units, educational samples “would just be product from your inventory.” She indicated “some ideas that we've thrown around [were] to include a tamper-proof sticker on the label. For example, that says: ‘trade sample not for resale,’” in addition to “requiring sample feedback forms for employees.” West explained “the whole scheme here is that we would be allowing additional flexibility so that licensees can have more discretion on which employees can be provided samples, and then also increasing sampling amounts, but part of that trade-off is additional requirements” ensuring samples didn’t take the place of “employee compensation, or for sales incentives, or something else.” Having worked as a bartender, she was familiar with sales pitches by distributors, and wanted to feature “that sort of information that consumers would be interested in, and the budtenders would use to…sell your product.”
    • Brooke Davies, WACA Deputy Director, found the topic was "not something that has come up within our membership," but her initial impressions were “a lot of retailers already do do this and like with your bar example that you were sharing…testing the beer and having to fill out a thing, I would be curious if that was like a requirement of the state regulator, or if that was just more of a business practice.” Davies felt it was “a little bit much” for retailers to be expected to complete sample reviews by WSLCB officials, particularly if the goal of rule revisions was to streamline the process (audio - 1m).
    • Andy Brassington, Evergreen Herbal President and WACA Board of Trustees Vice President, encouraged any new PAL rules around samples to be optional, rather than “create an additional duplicative set of information and printing and stickering” (audio - 1m).
    • Douglas Henderson, Painted Rooster Cannabis Company CEO, was concerned by the prospect of being mandated to provide more information than his sales staff already did. He liked the existing sample-sized units of packaging, and felt “while there may be…people that take that opportunity to... get more samples for their staff as part of negotiating a deal, it's on the producers and processors to not accept that kind of behavior, stand up for ourselves and be able to put our best foot forward with the products we can provide inside of our budget” (audio - 1m).
    • Rachel Weygandt, Evergreen Herbal Compliance Manager, relayed that she’d been dealing with PAL rules in the sector for six years, and believed “if these are representative samples of the product, I would say that we'll be using our current packaging, especially from the edible side of the house….using the packaging that's already been approved by LCB.” This packaging had “child safety” features, and Weygandt wanted samples that reflect “products that we sell exactly as we sell them” instead of separate dedicated packaging. She added that there were also specific stickers for samples, and she was open to modifying them “as long as that's all…built in with the system we're already doing and there's no additional steps then I think it's great” (audio - 2m).
    • Celia Curran, Craft Elixirs Business Development Strategist, said her company made edibles, including “a delicious chocolate syrup that we sell in a hundred milligram [mg] bottle and in the past in order to be compliant to send a sample we would have to change the recipe in order to create a ten milligram bottle.” She was curious “how do those of us that make a liquid edible in hundred milligram form send that as a sample when our sample limitations have been to a 10 milligram dose?” West’s intention was “that those hundred milligram liquid edibles can be samples” so long as they were clearly labeled as such (audio - 2m).
    • Weygandt repeated Davies’ and Henderson’s concerns that “to put any additional information with these samples, it takes a lot from us.” This included requiring printed promotional materials, she remarked (audio - 1m).
    • Saad brought up that samples which were representative of the product were more helpful for medical cannabis patients like himself. “You don't have to give a lot of sample, it can be one and it can be sold for half a price,” he said, but sampling cannabis before putting it on the shelf was important (audio - 3m).
  • New Products (audio - 2m)
    • West began to describe "what a 'new product' means," offering the example of an edibles processor adding a new flavor of product. She regarded this as easier to classify as a new product “as opposed to…flower because you could have maybe two processors that produce the same strain, and so by putting real language in there that says…’a new product is like a new strain,’ that is obviously limiting.”
    • Weygandt sought more specifics around what constituted a new product, or what limitations were. West commented they were items a producer/processor hadn’t sold to a retailer before, or when a “producer approaches another processor and says, ‘hey I have this new strain’” (audio - 3m).
      • Weygandt suggested that if they provided samples to a retailer who didn’t buy their products, only to have a new staffer later request samples, she could be limited in her ability to provide either vendor or educational samples. She noted, “I just talked to a store yesterday that won't pick up a product unless their team says that they want it.”
    • Jonathan S. highlighted that the source of the cannabis flower was “really important” for pre-rolled joints, as processors might use one or multiple sources, leading to differences in pre-roll production. He was eager to provide samples, and felt it was “pretty clear if people follow the rules that you label them ‘vendor samples’ or ‘education samples,’” but was unsure if new labeling was beneficial, or if more enforcement around not selling samples to the public was needed. Jonathan also found that differences in cultivation, even between harvests by the same company, made updated samples “vital” for him to move product. West agreed that “every harvest [was] different,” or even among “batches” of the same harvest (audio - 2m).
      • On Wednesday October 11th, WSLCB staff plan to present board members options on a separate batch tracking rulemaking petition mentioned on September 12th.
  • Material Change (audio - 1m).
    • “I want to talk about what a ‘material change’ would be, your substantial change that would allow” something to be classified as “being a new product,” said West. She discussed how various products might be classified as new, based on factors such as growing method; use of pesticides or different active ingredients; flavoring; or the results of phenotype hunting. There would also be a set definition for "new business relationship" (audio - 2m).
    • Davies felt that a different batch harvested from the same cannabis cultivar should constitute a new product. West shared that she’d heard similar suggestions from another licensee, and was considering a “sample waiver…in the event that you as a processor/producer or whatnot” grew “this really awesome new batch of flower,” samples could be provided to other licensees under the WSLCB-issued waiver as a type of new product. Davies appreciated West’s receptiveness, but “my gut reaction is if we're trying to sort of streamline all these things it seems like a sample waiver is just another kind of administrative burden for everybody that would overcomplicate it” (audio - 3m).
    • Becca Burghardi, Northwest Cannabis Solutions Assistant Director of Research and Development, 4Front Ventures Senior Project Manager, and WACA President, agreed with Davies’ sentiment that phenotype hunting by producers was common “as we're trying to narrow down what the best genetics are.” For concentrates, she said that “every batch of concentrates is a new batch,” and that new product sample rules should reflect that (audio - 1m).
    • Brassington asked that the definition of material change should reflect “new or different ingredients; new and different formulations; new or different packaging; all which can affect the consumer experience as well as the budget” (audio - 1m).
    • Henderson felt the suggested changes on sampling rules "seems to be replacing an overly arbitrary system with a similarly arbitrary system by which we're trying to differentiate every different level." He said rules could be better understood if samples meant “a product that's not available for resale that can only be distributed by the retailer to its own employees.” Henderson viewed such a standard “as easier in this regard” than worrying about whether each generation of products was suitably ‘new.’ He argued “it seems so much simpler to just make samples samples, and pull back more of the restrictions on them” while integrating “a means by which to report abuses of that system.” West favored sampling rules being simplified, but said staff wanted to address “many different reasons that sampling occurs” (audio - 3m).
    • Weygandt echoed all of Henderson’s points, adding that she wasn’t sure if educational samples fit into the proposed changes. She offered the example of Blaze soda, a product they’d sold, asking “can we not sample those because…those products were first to market?” Weygandt was eager to collaborate more closely with retail representatives on product development, since “we've all been trusted by the State to…hold these licenses and be responsible.” She wasn’t aware if there were comparable sampling and labeling rules “on liquor samples,” arguing the “most helpful thing for us would be to eliminate all these buckets and just allow us to function as the trusted business owners that we are” (audio - 3m).
    • Raymond Kinney, Dogtown Pioneers Owner, agreed with Brassington and Weygandt, and posited that many edible products lacked “consistent characteristics of taste, of effect, or of packaging quality from batch to batch.” Samples helped budtenders “guide consumers” when making purchase decisions, he argued, plus “the concentrates used either are, or are not consistent which is really important either way in that budtender having knowledge of that product” (audio - 2m).
    • Angel advised using the existing rules, but "upping the samples." She liked Weygandt’s approach at including retailers in product development, asking how this worked for alcohol regulations and “wine tasting.” West replied that the trade sample sticker came from alcohol rules, but cautioned to “be mindful that cannabis is a very different product than alcohol and so and there's obviously different reasons and…circumstances along the supply chain that would require sampling more than in the alcohol scenario. So that's why this does get a little bit more complicated” (audio - 2m).
    • As a former medical grower, Saad believed cannabis flower was different each time it was grown. Recognizing producer profit margins were already small, “it don't have to be even free if they make the sale to be included, or just the price to be lower a little” (audio - 3m).
    • Weygandt responded that she wasn’t encouraging consumption of trade samples at retail stores, inquiring if staff were “offering that to us” as part of the rule changes. West said “a vendor day or trade show just for the industry” had been suggested but “would require some statutory changes.” She noted they were considering a “feedback form” budtenders could return to the licensee. Weygandt added that since retailers had staff turnover and multiple shifts, a policy which allowed sampling by as many employees as possible at the discretion of stores was preferable. She repeated her call to allow larger sample sizes for infused beverages, as it could help their business “tremendously” (audio - 3m).
    • Justin Nordhorn, Director of Policy and External Affairs, referenced liquor sampling rules in WAC 314-64, agreeing with West that they were very different from cannabis. “I don't think mirroring them exactly is probably what you'll find is in the best interest of the cannabis industry. However, there are some similarities that can be looked upon. For example, when you're talking about new strains, the wine type of sampling is done by vintage year,” he said (audio - 1m).
  • Vendor Samples (audio - 5m)
    • West told the group their internal review of suggestions would continue as she moved to vendor samples, starting with “processor to processor sampling.” She was most interested in “what type of products should be allowed and how many samples should be allowed,” along with a “determination on when sampling can occur.” This topic emerged from licensee “survey responses as something that people wanted to do,” West explained.
    • Her presentation included limits on samples “broken down by the type of product and the reason,” West explained, indicating that “employee sampling” limits weren’t applicable, as these samples would fall under “internal quality control sampling.” She stated that processors would be allotted an “aggregate quarterly limit” of samples from new products, in addition to an “aggregate limit from all processors.” West theorized that processors could sample new products up to a certain amount, showing two options for limits based on how many employees of a processor would be sampling items from another licensee. She was particularly open to ideas on the timeframe and scheduling of sample limits.
    • Jamie Hoffman, Craft Elixirs President, inquired about the potential quarterly limit on sampling per vendor. West answered that producers could accept a total of two ounces during a sampling period, but no more than 14 grams from any one processor (audio - 5m).
      • Hoffman was skeptical of such a schedule because they worked with many small growers, and the changes would amount to “quite a bit” of cannabis being shared among licensees. West said the aggregate numbers would “by default limit the amount of employees that would be able to sample…under this framework seven employees would get to try this new product if samples were two grams each” along with more flexibility for the licensee to decide which staff could sample cannabis.
  • Educational Samples (audio - 2m).
    • Calling for additional input on the topic, West commented on some of the issues which had already been raised:
      • “Licensees being able to have the discretion to give on which employees they can give samples too”
      • “Having sample feedback forms”
      • Training so “when employees are being provided samples, they understand the product that they are consuming”
    • Davies found that with retailers already providing samples to their staff, a lot of education was already happening. She expected trying to regulate processes would upend systems where employees specialized in product types, or a vendor would “come and educate the staff on their products as well. And that's something…negotiated between the retailer and the producer/processor.” Davies had no problem discussing what employee education looked like, but wasn’t inclined to see one process formalized in rule. West responded that authorities weren’t trying to “make a big impact on how things are currently being done" (audio - 2m).
  • West invited comments on any “general requirement” about employee training, especially around informing retail staff about “health effects [or] risk that could occur from sampling…so that we know that employees [were] sampling for the sake of sampling.” She mentioned the possibility for feedback forms related to sampling, but “we don't want to be too prescriptive in rule” (audio - 1m).
    • Henderson seconded Davies’ remarks on employee training, doubtful that “getting into the weeds on additional regulation [was] anything that we would want” (audio - <1m).
    • Weygandt felt similar to Davies and Henderson that the potential changes laid out by staff were "overly prescriptive.” After years of retailers being able to assess sampling as they saw fit, she thought “this seems like a lot to try and identify all the reasons why we would do an educational sample” (audio - 1m).
  • West encouraged other input, stating that while simplicity was important, agency officials also had an interest in making sure cannabis samples weren’t used as compensation nor to incentivize sales, offering the example that “if you're the top seller you get like a whole ounce of flower for free” wasn’t the intended use for cannabis samples. Staff were aiming “trying to create the framework that doesn't do this, but that does all of the things that you guys have mentioned about simplifying things,” she said. One idea had been about pulling samples from retail inventory at cost, but she conveyed that smaller retailers with limited inventory had concerns about such an approach. One alternative would be for processors to supply products for an “open sampling day,” noted West (audio - 2m).
    • Preferring simplicity, Kinney reasoned that complexity tended to “incentivize the rule breakers,” and that budtenders would favor a processor willing to exceed sampling limits or “break those complex rules” (audio - 1m).
  • Quality Control Samples (audio - 2m)
    • West recalled her experience conducting employee training in food safety compliance where staff signed off that they’d understood subjects. She believed that “sampling plans or SOPs” (standard operating procedures) could be designed by licensees, but agency officials were looking for evidence they were acting in good faith by taking sampling rules “seriously.”
    • When Brassington asked about internal quality control sampling West replied that she wanted any feedback on how to keep samples from being used as employee compensation while allowing for “employees to also get samples to try because it is important.” She pointed out that there would be a different focus group that would address this topic (audio - 2m).
    • Henderson observed that “many of us in this industry on the producer processor side would like to not have restrictions on this at all,” and instead should be able to distribute samples from their stock as they wished. “We will definitely be holding a separate engagement discussion about that,” West remarked, “so that retailers won't have to sit and listen” (audio - 2m).
    • Davies’ feedback on preventing samples from being used as employee compensation was to include wording “similar to how we have…language about undue influence between tiers, just simple language that says…samples provided to retail employees may not be used as an incentive for sales” so people understood “the spirit of the rule." She stated the group wanted simpler, streamlined rules to help licensees understand—and Enforcement and Education staff achieve compliance with—sampling rules (audio - 3m).
    • Weygandt agreed with Davies’ point, and her proposed language (audio - 1m).
    • Tyler Elwell, Craft Elixirs staff, asked if he could see the frameworks for edible sample limits. West promised that her presentation would be shared publicly (audio - 2m).
    • Hoffman conveyed that Craft Elixirs had “maybe 30 employees” and a number of products, but “the way the rules [were] written currently is, it's, it's very complicated. It's usually…one sample, one unit per batch.” She felt retail employees got “a nice selection of things to try,” but processor staff had fewer options. Hoffman shared that their employees could “go to a retail shop and purchase the products and then we can reimburse them…the LCB still get the benefit of it, and the store still gets the benefit of it, but as…the small processor…it's expensive for us to have to do something like that and it would definitely…seem much more fair if if we were able to sample out our products to our employees” (audio - 3m).
  • Regulatory Framework Transition (audio - 1m)
    • West assured attendees any sampling rule changes would include a transition period, such as a potential "give-away period" for samples packaged under existing rules.
    • Curran suggested some processors were offering excess samples to incentivize sales to retailers and that there should be consequences for licensees using them in that way. West mentioned a plan for samples to be manifested separately, and for both licensees to sign off to avoid a retailer being “inundated” with samples from suppliers. Curran felt processors should “always ask first” prior to delivering samples, and that could be added to rules (audio - 3m).
    • “As a business practice it’s in a producer/processors’ best interest to get consent,” Weygandt said, arguing existing rules required retailers to accept or reject samples, so a rule change might not be needed (audio - 1m). Brassington agreed, and also supported the idea of a transition sell down period (audio - 1m).
  • West commented that since they’d heard from “a substantial” number of retailers that they were receiving samples they didn’t want, staff wanted to stop that from occurring. She speculated that documentation of sample disbursement could help resolve this (audio - 1m).
    • Weygandt called for getting sampling orders in writing, though she was aware different stores communicated their interest in samples in different mediums. She wanted WSLCB to hear from more retailers before drafting new rules (audio - 2m).
    • Saad advised leaving sample orders up to a retailer, and stressed that he trusted samples over product labeling (audio - 3m).

• West closed the meeting by highlighting a second focus group, and subsequently published a revised presentation (audio - 1m).
  • “You guys gave me some great things to think about,” West said, stating the internal discussions of sample rules would continue at the agency. She promised to share the presentation ahead of a Wednesday October 11th focus group after she “updated a little bit and I will also put it on our laws and rules page.”
    • Published on Monday October 9th, the WSLCB slidedeck was significantly different in comparison to screenshots Cannabis Observer obtained of the original presentation which had been edited during and after the event.