WSLCB - Focus Group - Product Samples
(October 11, 2023)

Here are some observations from the Wednesday October 11th 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 set out the parameters of the second discussion on cannabis product sample rules.
  • The rulemaking project was initiated on March 1st based on a petition submitted in August 2022 from the Washington CannaBusiness Association (WACA). WSLCB rulemaking process had slowed down significantly owing to turnover in the Policy and Rules team.
    • An initial focus group on product samples was hosted by WSLCB staff on March 22nd. In a second focus group on October 6th, West shared a bit of her history before engaging attendees in a conversation on possible modifications to increase accountability for how cannabis samples were used by industry members while leaving some flexibility to promote products for sale by a processor or familiarize staff with inventory.
  • Welcoming participants, West reiterated her work background (audio - 1m). She then explained her hope to get “some resolution on a few things so that we could go ahead and drop a set of conceptual draft rules.” Staff would ensure stakeholders had “about two weeks or so to view those before we hold another stakeholder session.” West planned to be receptive to any ideas suggested in their “brainstorm” session, but stopped short of promising changes discussed would be included (audio - 1m).

• The discussion centered on trade sample comments from a variety of cannabis licensees and trade association members, in addition to a handful of questions and some remarks on regulatory frameworks.
  • West said that a definition for ‘trade sample’ she’d shown on October 6th had been slightly expanded to include “provid[ing] to employees for the purpose of product promotion and targeted advertising.” She offered, “maybe we should change the language so that…processor facilities can try samples for educational purposes…any thoughts on that?” West also clarified for new attendees this “would be collapsing vendor and educational samples” together into one definition while still permitting “internal quality control samples” (audio - 2m, presentation).
  • Daniel Brown observed when “negotiating the sale on a product a licensee does not already carry,” for each new lot “I view that as a new item, essentially.” West told him she’d envisioned “different sample limit options and…one was to do it on…per harvest batch” limit. She mentioned that in a meeting earlier that day, the board members had approved a rulemaking petition for batch tracking, which she understood as meaning each cannabis ‘harvest’ or ‘lot’ from a producer. “It just seems to me that it would be best to do it by lot,” Brown said. “Is that how quality control sampling is done? It would be good to kind of have that consistency there,” West observed (audio - 4m).
  • Heidi Knowlton and Tina with Buddy Botanicals wanted to know if the same sample size limits and labeling would stay in place. West said staff were contemplating allowing “representative samples” to be pulled from inventory and labeled as a sample (audio - 2m).
  • WSLCB Education Program Manager Matthew McCallum shared “as a historical reference, using lotting as a definition for samples has been extremely problematic…because it's an unlimited” option for producers. Without any “cap” on the number of lots, he indicated staff had noticed “issues with testing, people sub-lotting to disguise the results of a specific lot or harvest. Same with ’harvest,’ you could have an entire field of plants, and…just saying that ‘I harvested it on a different day’ doesn't make it a different product.” McCallum insisted that “it was originally done that way years ago with…lots and things, and it was changed to be for products [retailers] don't already carry because we were seeing licenses try to use those different lot numbers…as an argument for excessive sampling of a product that they already carried” (audio - 5m).
    • West considered this a “traceability issue,” something that agency officials were already looking into independently of any sampling changes. “Let's just pretend,” she said, “for the sake of this brainstorming that we could identify…plants that go into the lot” and track samples coming out of a lot. West recognized the Cannabis Central Reporting System (CCRS) wasn’t capable of this at the moment.
    • McCallum felt it was more about defining sampled products, whether there was a minimal difference in lot test results to merit a separate sampling from that group. “We want the industry to make sure that they have access to giving retailers samples of products so that they can make informed choices about what they carry, but reasonably…what would prevent…an abuse of that through just renaming something because of a lot number, or because of, of a minor result change.”
  • Kalani Martin, Free Rain Farms Business Development Manager, brought up that staff were already proposing monthly limits on samples. West said that increased sample limits were being considered, such as for concentrates by not requiring dedicated serving sizes, but “how do we make sure that people are getting those new products?” She was attempting to find language to “appease” both WSLCB staff and licensees, explaining they were considering seven grams of samples per batch, though some products like vapor cartridges would be distributed in sample “units.” West continued, noting how Licensing Program Specialist Susan Harrell told her the definition of ‘unit’ had changed due to SB 5367, and the agency was going to be updating that through parallel rulemaking. “So, when we're talking about sample units for the purposes of this conversation, we're talking about…actual product units not sample units,” added West (audio - 4m).
  • Micah Sherman, Raven Co-Owner and Washington Sun and Craft Growers Association (WSCA) Board Member, reported that he’d been present at the first focus group and reviewed the entire presentation ahead of the meeting. He believed the goal of rulemaking was to have product sampling be “both simpler and more consistent across the different kinds of samples and also removing the kind of overall limit on educational samples that a retailer could take from any vendor” (audio - 5m).
    • He found the potential framework “did a really good job of…achieving that…the condensing of them into the trade sample, I think that works well.” Sherman had concerns about some of the alternatives but appreciated the idea of “representative sampling” of products from inventory instead of separately sized packaging. “I think the, the key thing for how do we limit the samples from a producer, or a processor to a retailer…should be based on an overall limit per month for trade samples across…each product category,” argued Sherman. “We shouldn't try to make a complicated system of tying sample limits” to harvests or lots, as he viewed a fixed limit of samples per category, per month to be “very easy for us to…understand and keep track of” for both licensees and regulators. 
    • West replied that some alternative sampling regime “options I had for the limit…would be to do it an…aggregate amount per licensee, so you would get like one ounce per month from each licensee” or “just to do it total from all licenses…if you're a retailer, then you could get two pounds per month from all…processors combined of flower.” Sherman didn’t want any vendor to “overload” a retailer with samples, keeping competitors out, and thought limits should be between a processor and store.
  • Rachel Weygandt, Evergreen Herbal Chief of Staff, spoke as someone who sold infused cannabis edibles and found a possible monthly cap of 14 units to be limiting. West indicated there would be a “couple of options”: per batch, “so seven products that could be up to 100 milligrams, whatever you're selling,” or “each processor could provide each retailer 14 units per month,” and finally “a total so…you would just get…56 units per month from all processors.” She had begun to feel as though the third was a “not good option because it…doesn't allow all the processors to get their products out there.” Weygandt stated her preference for sampling limits based on the number of product types—as many "sell quite a bit of things"—rather than by a total number a licensee could disburse or receive per month. When West pressed for an optimal number of samples per product for a retailer, Weygandt demurred, relating the amount to the number of budtenders who might be in a store and inviting others to suggest numbers (audio - 5m).
  • Max Armstrong, Founder and Chief Operating Officer of Learn Brands (“a budtender education and sampling platform”), told the group he felt that every budtender needed to be familiar with every product a store stocked, and he’d advise enough samples for all staff in a store. “Having limits of like seven or something…I think that's really small,” he said, and tying sample limits to the number of staff in a retailer “would be…the best option in my mind” (audio - 2m).
  • Morgan Sokol, Morgan Sokol Consulting Founder, brought up sample jars, which allowed people curious about a product to see or smell it, arguing that the practice was “really successful for us in other markets,” but under Washington rules the practice was regulated “out of existence.” She felt this had happened because processors were required to distribute sample jars, something that was “really cost prohibitive and just really not environmentally friendly. What would be preferred is that we could receive samples from the processor not in the jars, but…we're able to reuse sample jars at the store” which had a “locking mechanism so customers cannot walk away with it, or take product out of the jars, but they would be able to smell it and see [cannabis flower] through a magnifying glass” (audio - 3m).
    • Sokol was a former MedMen Enterprises Senior Vice President of Government Affairs.
  • Sherman clarified his earlier remarks that sampling should be batch focused to acknowledge that some products like edibles should be product-based. He further recognized the troubles mentioned by McCallum, but felt a mixed approach was best, indicating sampling numbers should be “strain delineated.”  Sherman speculated the limit on cannabis flower could be based on production tiers, as some licensees could only grow 4,000 square feet (sq ft) while others could gow 30,000 sq ft, “but it does make sense that each different type of product would have a different approach to how it's limited and sampled.” He wanted to avoid a “situation where, if we have a lot of product variety, that we’re not able to sample them all” (audio - 4m).
  • Shawn DeNae Wagenseller, Washington Bud Company Co-Owner and Cannabis Alliance Secretary, agreed with having limits based on product type. She’d heard retailers remark they were “overwhelmed with samples” and found it generally difficult to get samples returned or feedback from retail representatives. She worried that increasing sample limits to account for turnover among budtenders would exacerbate the situation. “I'd be curious if there's any retailers on the call that that either can dispute that, or confirm that, because we sure don't want to…be giving out samples that aren't, that aren't being distributed in a timely manner, and getting feedback in a timely manner” (audio - 2m).
    • West asked about feedback forms, as agency staff proposed additional recordkeeping related to sampling on October 6th. “Some stores have their internal feedback forms and they're pretty good about it, but most stores…in my experience don't really have…a formal written feedback” process, Wagenseller replied (audio - 2m).
  • Teresa, a retailer who’d previously made remarks, said her business was “inundated” with samples they couldn’t respond to fast enough. She indicated, “currently our policy is we don't take vendor samples without an appointment” to screen for circumstances where they “already got a good one in my store” (audio - 12m).
    • Teresa explained that she passed samples out to her budtenders at the same time as their paychecks as an “educational sample,” whereas for vendor samples “we have a sample sheet that they have to return to us with the five-star rating system. However, if I had to keep track of those for the LCB. It would be cost prohibitive for me to even try samples.” She continued, saying the “handwritten notes” were shared amongst some of her staff who decided if something was popular enough to stock. The staff time to organize and log that for regulators was a non-starter for Teresa as “it's already tough for us to try to keep track of the 100 samples that we're supposed to get a month.”
    • Teresa also favored keeping dedicated manifests and distinct packaging for samples “so that it's easier for us as retailers and probably the CCRS and the LCB to keep track of them.” Additionally, “I'm going to ask every producer processor here: please put your name, your address, and your contact phone number for a vendor sample on the package because we lose the little piece of paper,” she remarked. Dedicated packaging also reduced the chance of stores selling sample units of a product, she noted.
    • West offered some details on how she imagined new definitions and stores pulling “representative samples” from their inventory might address some of Teresa’s concerns. Teresa sounded skeptical that trade samples would address her need for more samples of what her store already carried, and fewer samples for products she didn’t: “lumping them all together is not going to solve that problem for me.”
  • Jamie Shipman from Piece of Mind Cannabis said as a retailer she felt sample jars didn’t “really represent the product very well” unless “switched out fairly often.” She advised “allowing a larger weight for educational samples and things like that would be great,” remarking that her team tracked every sample that went out with receipts. “I think I remember Evergreen Herbal saying last time that a ten milligram sample is not going to taste the same as a hundred milligram sample, Shipman commented, “opening up the conversation on the different weights and things like that, that we could do, would be the best in my opinion.” She continued, stating “at our store, everybody has to sample out what they get their stickers for. The vendor samples that say ‘must review,’ and we also actually appreciate when others write their educational sample reviews because…it helps actually sell the product a little bit better…putting them together could be helpful, but I think the most important part would be the weight and the limits” (audio - 5m).
    • West followed up to see if seven units per product like edibles would be enough. Shipman felt that would be too little, wanting agency officials to generally “up the limit on how many educational or vendor samples that you could get because I personally have 17 on my staff and not everyone gets to try these things.” She felt products were best represented when all staff had tried them, but appreciated trade samples amount to free product, and that not all processors could afford to give as many samples. “I also don't really see a problem with them being on the same manifest as other products…that's just an internal control issue,” Shipman reasoned.
  • “Safety Scott” with the Washington State Department of Labor and Industries (WA LNI) weighed the practice of expecting employees to consume cannabis (“an impairing product”) off the clock in order to inform their employers or potential vendors, and asked, “should this be paid?” By extension, should any injury or “some sort of incident” result from this, he was curious where liability would lie. Scott suggested development of a dedicated reporting system run jointly by WSLCB and WA LNI staff, “this way the board could keep track of the samples that are being sent out, and also reviewed as to product specificities” (audio - 2m).
  • Weygandt acknowledged the challenges to retailers Teresa identified for mandatory sample review, but didn’t want to “create an environment where somebody may…be upset that their feedback wasn't implemented” (audio - 5m).
    • She further noted that plain sample packaging would create an additional complication to ensuring “the customer fully understands how the product is going to be sold on…the shelves.” Similar packaging could help staff think about product placement in their store, attested Weygandt, or show if packaging went beyond child safety to being “too difficult to open.” She indicated that pulling samples from an inventory could help in finding processor contact information, or identifying edible ingredients that might be a food allergy. “I hear Teresa's concerns and I think actually, sampling the products as they're sold actually does solve some of that concern,” Weygandt said.
    • Weygandt also indicated that current limits on educational samples “creates a problem for us because I don't know how many…samples a retailer ha[d] already received. I have no way of seeing” if a store was close to, or over, their sample limit. She considered a change to trade samples could “allow you to get more samples of products that you want samples of, and it will allow us to sample our products exactly as we're selling them to you.” 
  • Annie Rothrock, ATREG, Inc.Vice President, was also opposed to mandating special plain packaging for samples, particularly edibles, and supported the idea of a single trade sample category in lieu of both educational and vendor samples. She stated that special stickers for samples "works in other states" and that failure to label samples should be treated as “a compliance issue.” Rothrock also agreed infused beverages should be sampled as full 100 milligram (mg) products, rather than more limited 10 mg servings (audio - 6m).
    • Processors didn’t need budtender feedback, Rothrock argued, so requiring recordkeeping for them made little sense. Retailers might instead track whom on their staff received samples and when, she said,  “so that that can be traced to somebody if the trade sample is found on the open market somehow.”
    • Rothrock believed the proposal of seven samples of each product was an improvement, however for “product launches we wouldn't want to be limited to only seven units of a new product.” She preferred “to be able to have just like an allotment per month, and the processor can work with the retailer to determine which samples, and how many of which units they would like,” speculating that “30 to 50 is a good range according to our sales manager.” Rothrock felt this approach would let the cannabis sector “act as a normal business instead of being restricted by…an obtuse regulation.” West had Rothrock clarify that she meant 30-50 samples each month from each processor, and not total.
  • Like others, Wagenseller preferred samples in their standard packaging, but advised that if they weren’t properly labeled as samples, retailers “must reject that manifest” (audio - 2m).
    • Wagenseller did feel the existing font nomenclature for labeling samples should increase to align with US Department of Commerce National Institute of Standards and Technology (NIST) guidelines for user-facing text which called for a “minimum font size of 12 points as long as the text fits for display on the device.”
    • It was also her impression that budtenders might consume products socially after hours off-site, or discuss them at work, “so I really questioned whether we need to sample stores to the level that each and every budtender gets each and every sample,” which she saw as “overkill.”
  • Em Anderson, Hashtag Cannabis Head Purchaser, liked the trade sample definition and considered removing limits on educational samples “will only better, really, just the industry as a whole.” She favored clearer labels for samples, but otherwise felt they should fully represent the sizing and packaging of the product being sold “to really get to know that product inside and out in a way that our customers will see it as well” (audio - 3m).
    • Anderson didn’t know the best limits for samples of each product type, but suggested basing them per product, budtender, month, and store. One of her jobs was communicating with processors about how many budtenders they had on staff and what samples they wanted. Anderson remarked that “limits for each product type” was something she was open to learning more about from processors, “as I know that this will…affect them the most from their pockets.”
    • West admitted she wasn’t familiar with how batching or “stock keeping units” (SKU) for cannabis flower worked. Anderson tended to consider flower by differing strain, or SKU, inviting processors to speak up. She’d remembered mentions of how the CCRS system allowed for lots and sublotting of cannabis batches, adding “we need to address our current system in order to find a good solution for that” (audio - 3m).
  • Teresa stressed her concern that she didn’t want licensees to resell free samples, and was happy to pay at cost for samples used by budtenders. She appreciated Scott’s remarks on paying budtenders for time spent sampling, stating that she did pay staff “for the vendor sampling they do at home.” She said she’d never pushed for worksheets on samples “because they can try whenever they want, however they want, and it would be just as if they were purchasing their own. So I guess it's just kind of a perk of the job that they get these educational samples…they get paid for all sorts of little things even though they're not on the clock” (audio - 4m).
    • Although uncertain about the liability aspect, Teresa was concerned that if a manifest arrived and items weren’t labeled correctly “we have to reject them.” Some electronic payments resulted in orders being dropped off for her staff to “count it in at our leisure so that the driver doesn't have to wait.” To have to reject samples due to labeling on an otherwise accurate manifest would be a “logistical nightmare,” leading Teresa to prefer separate manifests for samples and inventory.
  • Wagenseller knew producers tracked cannabis by lots “and the lots are tested,” so limiting samples based on tested lot would be convenient for businesses like hers (audio - 1m).
  • Sherman brought up having conducted a “little text poll with some other growers and stuff about the weight limits around flower and concentrate.” He was hearing that “somewhere between 20 and 30 grams, like around an ounce” was acceptable per month “overall to a store.” But he asked about the possibility of a wider survey by WSLCB on the subject “limited to licensees in some way because that could be like a real good way to get a range of opinions about where these limits should be” (audio - 4m).
    • West indicated that her proposal was informed by a prior survey in July, but she could plan a second round based on their conversations.
    • Sherman gave an example of producers sending an ounce of cannabis to each retailer each month “and we worked with 50 stores,” that would be "an extraordinary amount" of sampling for smaller farms. “In my experience, we don't sample on those sort of quantities to every store all the time,” he acknowledged, “but there are times throughout the year where that's a nice thing to do. So another option to consider might be like maybe once a year we get to sample more in a month, and then the overall limit is a little bit lower per month, or something.” He realized that could be viewed as a “complication” to the sampling system, but he was wary of expectations to provide the maximum amount of samples to each store that carried his products each month. Sherman thought “once a quarter” to provide samples of a range of his products was also workable.
    • “Why not,” West said of a second survey, “it worked so well the first time.” She welcomed further comments by email, and promised another survey focused on sample limits for various categories would be drafted and distributed to licensees in the near future, “and then we can get more granular from there.” (audio - 1m).
  • West turned to potential regulatory frameworks and associated “trade-offs,” if there were new definitions and limits around sampling. Although “CCRS isn’t perfect,” she encouraged suggestions for how “LCB can make sure that people [were] doing things properly; and that people [were] within the limits; and also just serious about sampling and that it's not provided as like employee compensation; or as a sales incentive or something like that.” She noted that regulators would also consider further employee training, “something that I think is optional for alcohol, but I did include…requirements for alcohol later in the slide so that people could kind of get a comparison of the two frameworks (audio - 2m).
    • While a “written business policy” for sampling was already expected, West was unfamiliar “how this works with enforcement, the compliance of it, but my thought is you would have to include your sampling procedures and…also how you're giving those to employees.”
  • Weygandt said the existing system required reporting for retailers, but “on the processor side, I would love more freedom in sampling my employees. That is very…murky right now for us” (audio - 2m).
  • McCallum suggested an idea which might necessitate legislative changes: required certification for budtenders, akin to the Mandatory Alcohol Server Training (MAST) required for people serving alcohol for on-site consumption. He explained there were “some regulatory pieces in there because that certification to sell [was] regulated and there's repercussions if you sell to minors and things like that, so…that's been brought up over the years that would give us more of an avenue where they're required to receive education if they're going to be getting extra samples, or we're going to have massive amounts of samples at licensed locations” (audio - 1m).
    • Sherman asked if MAST permits were expected for people selling alcohol for off-site consumption. Justin Nordhorn, Director of Policy and External Affairs, clarified that it was required for locations allowing on-premises consumption, but not for stores selling beer, wine, or spirits to-go. He indicated that WSLCB staff would be presenting to lawmakers about possible impacts related to alcohol delivery (audio - 1m).
  • Dave Dixon, mentioning he was a retailer, didn’t want to see the burden for mandatory budtender training become another cost to retailers. Given high turnover in the industry, he thought this was "a bit of overkill” and drew parallels to the requirement for medically endorsed retailers to support at least one Washington State Department of Health (DOH) certified medical cannabis consultant on staff (audio - 2m).
    • West observed that since there was training when staff came on board, retailers could include topics related to sampling and diversion or other risks. Dixon agreed businesses did training of that nature, affirming that his business had been “borrowing from the medical training in order to fill out that employee training packet” (audio - 3m).
  • Teresa said she also had an employee training packet which staff were tested on. “But as far as like getting a…MAST certificate or something along those lines,” she called for WSLCB to provide information for budtenders “so that the employees don't have to read the entire” ruleset or statutes, “because right now we're kind of doing it on our own and we're kind of like pulling from all these different areas” (audio - 1m).
  • McCallum commented that agency compliance consultants were available to offer responsible sales or ID-checking classes (“you’re welcome to invite them”) and that annual inspections would cover what was considered applicable laws or rules for staff to know (audio - 3m).
    • Teresa described being “in constant contact with” her compliance consultant, and said WSLCB staff had been there “at least four times in the past eight years.” However, the high turnover rate would require her to regularly request a staff presentation. She added, “I get the slideshows. I put them in my employee handbook. I make them read them…but as far as like the sampling thing goes, we came up with our own sample policy…if you're talking about having budget or training it would be helpful if you guys put that all together in one place instead of…get it from here, and here, and there.”

• As the discussion was drawn to a close, West shared the next steps in drafting new product sample rules.
  • West reiterated that a survey to licensees about appropriate sample limits would be distributed soon and “may just also include some internal quality control sample questions.” She planned to subsequently schedule a dedicated conversation for producers and processors. West told attendees additional information would be posted on the laws and rules page at WSLCB (audio - 2m).
    • Dixon confirmed that the powerpoint presentation would be made available (audio - 1m) and Teresa thanked staff for hearing their concerns, and for “insights” from the other licensees: “I appreciate you all” (audio - 1m).
  • West brought things to a close by expressing her own gratitude, assuring the group she had new ideas and welcoming any further comments via rules@lcb.wa.gov. She urged everyone to “look out for the survey and then hopefully from there we'll be able to put a draft of conceptual rules out there for people to comment on” (audio - 1m).