WSLCB - Executive Management Team
(November 8, 2023)

Here are some observations from the Wednesday November 8th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) public meeting.

My top 3 takeaways:

• Licensing and Regulation Director Becky Smith added new details around the progress of social equity applicants and responded to comments by agency leaders on local authority and disproportionately impacted area (DIA) mapping.
  • Smith previously reviewed the status of social equity program applicants on October 31st. Additionally, board members approved the start of rulemaking implementing legislative changes to the equity program earlier that day.
  • Smith reported that she’d followed through on commitment to send a letter to local government officials in jurisdictions with retail allotments about their authority around permitting equity businesses. “We have contacted and sent out letters to 208 local…authorities, and that's the cities and towns” within counties with allotments, she said, “and so that's why it's such a small amount.” Smith continued, saying all equity applicants were also sent “notification” by letters and phone calls. “We only received one inquiry,” she noted, related to clarifying “that we have allotments, and then local authorities have their allotments, and sometimes they're not the same. Sometimes they're much less than what LCB has allotted.” Overall, Smith felt “we're continuing to work through the process, which is terrific” (audio - 1m, Video - TVW).
  • Board Member Ollie Garrett shared that she was interested in the response from local officials. Smith said someone from the City of Marysville had sent back “their requirement for what's required for somebody to get licensed, and what they're really saying is that they're not going to allow anybody to get a license in that area” (audio - 2m, Video - TVW).
    • Garrett asked for any more applicant feedback, including whether “they understand what they were getting.” Smith said “the license investigator” let them know about the letter, and to “also let them know that if they have further questions or concerns in the future, like they're dealing with the local authority and they need us,” to reach out.
    • Board Chair David Postman asked that the board receive copies of communications both to equity applicants and local officials.
  • Turning to updated DIA maps, Smith relayed “even though we have received the information and the map back, I do have questions.” After conferring with staff, she planned on “going back to ask some questions” and “have a conversation with our, our attorney general just to make sure, again, that…we're hitting everything that we need to and we're required to.” She concluded that the revised maps were still not ready to be shared publicly (audio - 1m, Video - TVW).
    • Earlier during his remarks, Director of Legislative Relations Marc Webster noted that Smith had told him new DIA maps had been sent back by staff for the contractor, Environmental Systems Research Institute (ESRI), and he anticipated the maps “should be up and ready” in the coming days (audio - <1m,  Video - TVW).
    • Challenges creating DIA mapping previously delayed the licensing window, as Smith explained to the board a year earlier in November 2022.
  • Smith subsequently noted that two of the social equity applicants were already nearing “their build out/final inspection.” She explained that “one of them is in Snohomish County. The other one is in Ferry County,” and she understood “their hope is to be open before…January” 2024 (audio - 1m,  Video - TVW).

• Director of Policy and External Affairs Justin Nordhorn went over team staffing, plus the work going on in the WSLCB Research Unit.
  • Nordhorn shared that a new Policy and Rules Coordinator would join the agency the following week, “so we're excited to get that person on, and we do have our former Rules Coordinator [Jeff Kildahl] that was out on leave starting to be able to engage and come back” (audio - 1m, Video - TVW).
    • Nordhorn mentioned that the successor for Public Health Education Liaison Mary Segawa, Kristen Haley, had begun working at WSLCB ahead of Segawa’s retirement at the end of 2023. He lauded Haley’s “particularly robust background in media campaigns for Department of Health. And so she has a health background and actually she just won a national award for some of her former work” on a media campaign “promoting COVID-19 vaccinations where she had a tremendous amount of community and partner input” (audio - 1m, Video - TVW).
      • Nordhorn also noted that public health staff would be part of a planning session for the next Washington Healthy Youth Survey (HYS) the following week.
        • Find out more from a staff presentation on the most recent HYS in May 2022.
  • According to Nordhorn, staff were considering a dashboard for their Research Unit that would outline what projects the team was working on. Additionally, staff had been working on “identifying resources for the research program, trying to figure out appropriate budgets moving forward,” he remarked, while trying to find out from other agencies with similar departments what “best practices” researchers should consider. He concluded with a comment that “we have our recruitment out for the research manager, so I'll be screening some of the applications this week” and “hopefully setting up some interviews the next few weeks” (audio - 1m, Video - TVW).
  • Retail outlet density, which Research Analyst Steve Ziegler talked about on October 3rd, was another topic noted by Nordhorn. He stated SB 5080 had required WSLCB to set rules to for “the number of licenses per county,” and “local authorities ha[d] the option in the statute to also create ordinances around the number that they feel is appropriate within their county” (audio - 3m, Video - TVW).
    • The final bill report for SB 5080 outlined how rulemaking by the agency, “when determining the maximum number of retail outlets licensed in counties, LCB must consider written input from an incorporated city or town, or county legislative authority when evaluating concerns related to outlet density.” The board was allowed to make rules for “identifying how local jurisdiction input on outlet density will be evaluated.” While a local “ordinance prescribing outlet density limitations” wouldn’t impact existing licenses, WSLCB had to “adopt rules establishing a threshold of the number of licenses created in the Program that can be located in each county.”
    • Nordhorn suggested that staff “thought it was prudent to be able to to look at some information in a global manner on outlet density. So [the research team] looked at things in alcohol, tobacco, and cannabis and the literature that was out there.” His goal was for WSLCB staff to have context and data to inform local government officials, but cautioned the number of licenses per county hadn’t been set. Nordhorn’s impression was that SB 5080 was passed with language that “created some complexities” which officials hadn’t recognized when the bill was going through the legislative process. He summed up how studying “outlet density [was] really going to help inform on the 5080 rule development.”
      • In particular, Nordhorn explained how rules setting the maximum number of retailers in a county wouldn’t “come into play until we ask the legislature for more, or recommend an increase in licenses.”
        • Agency leaders weren’t going to pursue legislative approval for additional cannabis licenses in the 2024 session while applicants for the existing equity retail allotments finished the licensing process.
      • Once equity licenses were situated, staff would be “creating the rules long before [retail caps] will actually be in effect,” and Nordhorn expected “limitations on the caps, there's some double roll out standards.” One standard would be for equity applicants who could “go anywhere [statewide], and then we have the caps that will come in after that,” he said,  with standards limiting the total number of cannabis shops in each county, inclusive of social equity stores.
      • Because equity licenses would be allowed to situate in any jurisdiction that would permit them, Nordhorn felt “5080 says right now that they don't have to abide by the caps in the counties,” so setting caps in rules before those applicants were required to abide by them was “where…that complexity… folds in there.” 

• Director of Legislative Relations Marc Webster highlighted some interim work he was completing before the 2024 session, including tracking prior legislation being implemented, a legislative report involving cannabis canopy, and budget discussions.
  • Webster found the pace of legislative work had “gone from a little bit noisy to deafening,” and a staffer for the Washington State House of Representatives (WA House) told him “it already felt like session this week…we're not only getting those requests and inquiries from legislative staff, we're getting those ‘and it can't wait’ time frames” (audio - 1m, Video - TVW).
  • Bringing up the implementation tracker—which Webster last addressed in an open meeting on August 9th—he showed what the tracker looked like at the moment, with “a lot more of these items moving into the completed status” (audio - 1m, Video - TVW).
    • Nordhorn spoke up to say his interim outreach to legislative staff was “winding down since it's winding up” for prefiling ahead of the 2024 session. He said that “one of the staff members is transitioning to another committee, so we'll be trying to pull some new folks in” and brief on various subjects of interest, “because during session it's just so fast and furious. It's hard to get information to them.” Overall, both Nordhorn and Webster felt their interactions with legislative staff had been “really appreciated,” noting events like their September 26th legislative work session on biometric age verification (audio - 1m, Video - TVW).
  • Webster called attention to WSLCB staff participation in a Washington State Joint Legislative Audit and Review Committee (JLARC) cannabis market study, another aspect of SB 5080 (audio - <1m, Video - TVW).
    • Postman asked whether JLARC staff would be looking at cannabis canopy or overall production. Webster was uncertain, but knew they were seeking a lot of data on the topic and felt “it's getting at the same thing.” Postman knew there had been previous discussions on “are we measuring canopy? Controlling production? The interplay of the two” (audio - 1m, Video - TVW).
      • Find out more from the JLARC presentation on proposed study questions.
    • WSLCB leaders sought stakeholder input on refining the definition of production canopy in October 2022, but by March 7th, staff reported on their decision to forego canopy rulemaking in favor of an interpretive statement to reduce confusion around the existing definition in WAC 314-55-010(31).
  • Webster brought up a staff meeting with legislative fiscal committee and Washington State Office of Financial Management (WA OFM) representatives to plan for their agency budget, remarking, “that part of the process is heating up” (audio - <1m, Video - TVW). Postman encouraged Webster to reach out “let us know if it looks like any of those are a harder sell at OFM,” as board members could help “talk to anybody after that” (audio - <1m, Video - TVW).