WSLCB - Board Meeting
(December 6, 2023)

Here are some observations from the Wednesday December 6th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 2 takeaways:

• Public comments on the cannabis social equity program from two Black Excellence in Cannabis (BEC) members largely matched what they’d said to legislators the day prior, while offering clarification around a prior inference of racial tokenism in agency hiring.
  • The day before the board meeting, WSLCB leadership and BEC members gave dueling assessments of the progress of the program to members of the Washington State House Regulated Substances and Gaming Committee (WA House RSG). The result was several pointed questions from the committee on how the agency, and staff managing the technical assistance and mentorship component at the Washington State Department of Commerce (WA Commerce), were evaluating their own work.
  • Peter Manning, BEC Co-Founder (audio - 4m, Video - WSLCB, Video - TVW)
    • Offering remarks similar to his legislative testimony, Manning established that on September 15th BEC members sent “a letter to LCB stating that they felt it was unfair for them to have to do a records requests to obtain a social equity score. On September 17th, the LCB responded with the letter saying they're weren’t gonna make any corrections, that we would have to continue with a records requests in order to obtain the score.” This position was neither “amiable [sic]…nor transparent,” to BEC members, Manning said, so on September 26th the group filed “a legal complaint against LCB, and abruptly, the next day the LCB made the rubric scores available for the applicants to view.”
      • Near the conclusion of her presentation during the board meeting on September 27th, Compliance and Adjudications Manager Nicola Reid acknowledged some applicants had voiced interest in “obtaining their application file. We would be happy to get those out. The requests do need to go through public records, and they can be emailed at publicrecords@lcb.wa.gov.” Reid relayed that staff were “looking at ways to make the scores more readily available so that you're not having to do a public records request and we'll be discussing this further today” (audio - 2m,  Video - WSLCB, Video - TVW).
      • On October 20th, Assistant Attorney General Jonathan Pitel replied regarding the “purported Summons and Complaint” to note that WSLCB “does not accept service of the unsigned complaint” due to procedural errors and their understanding that “this Complaint has not been filed with the King County Superior Court.”
    • Manning inquired about the “situation” as as an applicant, on behalf of his group, “and our community…why is it that if we have a legitimate cause, or legitimate concern we are forced to take drastic actions and be proactive?” He wanted agency officials to appreciate “we have been kept out of an industry for 10 years,” and existing licensees had “a 10 year head start on the Black and Brown community and we have proven one of the elements behind that was the LCB.” Manning qualified, “I'm not saying that the current members of the board are part of that, but I'm saying that that started here. The LCB has been responsible for this and our community needs to be treated a little bit differently.” He was emphatic that BEC members weren’t “complainers, we're not complaining about anything. We're asking for fair treatment, and equitable treatment, and I don't think that we're getting it.”
    • Alleging agency staff hadn’t been “transparent with the community and the LCB continues to hold dialogue about, or make decisions about our community, but they don't ever include us in those decisions,” Manning suggested “if you're going to do something for our community…we should be at the table.” He asked the board to make community members more involved in agency decision making, and that “some action be taken.”
  • Mike Asai, BEC Vice President (audio - 4m, Video - WSLCB, Video - TVW)
    • As he had during the work session, Asai conveyed warm wishes for the recovery of Senator Rebecca Saldaña: “we love her, we support her; and please pray for her and her family.”
      • Saldaña was a sponsor of 2023 law SB 5080, which amended the equity program, and was a former Co-Chair of the Washington State Legislative Task Force on Social Equity in Cannabis.
    • Asai first clarified his remarks to legislators the day before “if Director [Will] Lukela is listening. My comment was not to say the director was a token. The director is brand new here and for him to be there by himself” before lawmakers “was a disservice to him, was a disrespect to him, was a disservice and a disrespect to the Black community.” Asai believed staff “instrumental the past years on social equity should have been there answering questions.” He was satisfied “that there are Blacks that have been hired here at the board, but there's still more change that need to be made” beyond “just hiring Black, and nobody here Black is a token, whatsoever.” Speaking directly to Board Chair David Postman, Asai requested a “follow up” to a meeting they’d had last year.
      • Lukela was joined before WA House RSG by Director of Legislative Relations Marc Webster, who provided the bulk of the agency presentation.
    • “The LCB did not follow state law in 2015, the LCB went rogue when it came to Senate Bill 5052”merging licensed recreational, and unlicensed medical dispensaries, Asai asserted. Stores went “mainly to White applicants who lied on their incorporations,” which he saw as a violation of RCW 43.07.210, regarding “filing false statements” relating to “articles of incorporation or any other materials required to be filed with the Secretary of State,” a gross misdemeanor offense, “but yet they're still open for business.”
      • Cannabis Business Executive published a series of articles looking at the SB 5052 licensing process by WSLCB in 2016.
    • “We're solution based and our complaints are valid,” stated Asai, providing several potential avenues board members could pursue:
      • “There was emergency rules for 5052, but there's no emergency rules for Senate Bill 5080, the Board needs to look at that”
        • SB 5052 covered several issues including medical cannabis licensing. Emergency rules related to the law passed by board members in 2015 and 2016, and additional rulemaking adopted in June 2016 related to the implementation of the law.
      • “The Board needs to come to the Black and Brown community in King County in person to talk about the social equity program, not online, not Make Green Go!, you need staff there”
      • “The rubric needs to be prioritized for the cannabis pioneers with cannabis convictions” instead of participation in a “business charter, business plan…it needs to be based on articles of incorporation, and the duration of medical cannabis dispensaries up until 2016”
      • “Pioneers with cannabis convictions should not have to worry about getting a license…they deserve by their actions by taking risks and the effects of the war on drugs and living in” disproportionately impacted areas (DIA) to merit licenses “first and foremost in order for the future of cannabis in Washington state to move forward in a positive manner”
    • Asai felt “a lot of Black community leaders did not support Senate Bill 5080. We as community leaders did support the agency led bill because the bill will create generational wealth.” He closed with a call for agency leadership to “do more.”

• Board Chair David Postman self-imposed the same four minute limit given to public commenters to respond to the allegations made, why he considered the agency to be proactive in remedying past mistakes, and offer his view that staff were treating social equity program applicants fairly (audio - 4m, Video - WSLCB, Video - TVW).
  • Postman had previously used his prerogative as chair to respond to public remarks and attacks against officials or agency decision making, including responses to comments by Manning and/or Asai on the handling of the equity program in April and December 2021, and in December 2022.
  • After public comments in the meeting, Postman stated he was “glad an attempt was made to try to clarify the insulting comment made about our director, who by the way has been here six months, has years of experience in the industry and, and is fully leading this agency today.” When Asai interrupted to say he wasn’t insulting Lukela, Postman asserted, “it’s my turn to talk.”
  • “It's absolutely not true that it's been proven that this agency is the problem,” Postman said. Mentioning investigations and lawsuits, he claimed “none of them have shown anything. The federal lawsuit was dismissed with prejudice.” He further felt the premise that agency request legislation in 2020 establishing the equity program was a result of the suit was “easily shown to be false” due to the timing of the dismissal. “There was not a lawsuit filed over the, the rubric there was a change made in the rubric, and one of the problems we face here is that when an issue comes to us from somebody, they may not be the only person that raises that,” he argued.
  • Acknowledging that staff were fallible (“we actually make mistakes, we're not perfect”), Postman felt WSLCB was exemplary in that “we correct those mistakes.” Having heard “that we shouldn't make the mistake in the first place, and that somehow we don't do that with others,” Postman couldn’t square that perspective with the fact that he saw “far more litigation from our administrative violation notices, debates, legislative fights, and everything else with the majority owners than we do with social equity” applicants.
  • “There's not a racist conspiracy at this agency, the work that's been done shows that,” Postman said, recognizing “there are people here who some people don't like, and are convinced they work in a racist way. I'm convinced they do not.” He and other board members “wouldn't stand for that for one second.” They were staying “intimately involved” in the equity program, “it's a priority for all of us.” For WSLCB staff to use racial prejudice as part of their licensing actions “would have to have us either be complicit and involved in this racist conspiracy, or dupes, and I'll tell you none of us are either of those things.”
  • Postman commented that agency leaders would continue to resolve disputes and identify and fix any problems within their scope of authority, noting they had “pulled down our social equity rules and made them better because of input we got from cannabis pioneers, from people sitting in this room.” Board members and staff heard from licensees and stakeholders routinely, he said, and “in the liquor realm, we had a petition today, two, one was rejected, one was accepted.” Regulators embraced a process of continual improvement where “we try to do the right thing, and sometimes when it doesn't work out we have to go to court. It happens.”
  • When his four minute time limit was up, Postman adjourned the meeting.