WSLCB - Board Meeting
(December 20, 2023)

Here are some observations from the Wednesday December 20th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• An amendment to a cannabis compact with the Samish Indian Nation—which WSLCB negotiates on behalf of the State—was approved following favorable comments from board members and a tribal council member.
  • The tribal compact for the Samish Indian Nation was initially approved in January 2018. Find out more about the process from the “Tribal Marijuana Compact and Memorandum of Agreement Example Workflow” published in June 2019.
    • At time of publication, the 22nd and most recent new compact was with the Spokane Tribe of Indians in September 2022.
    • On September 13th, WSLCB leadership spoke about four “in progress” compacts, suggesting revisions to dispute resolution was a common theme in negotiations.
  • Tribal Liaison Marla Conwell, who joined the agency at the beginning of 2023 took over responsibility for the role from the Director of Legislative Relations, explained that the amendment to the Samish compact  “updates the language mainly ‘marijuana’ to ‘cannabis.’ It includes some provisions with our dispute resolution process that were included and updated, and just minor amendments with that.” She summed up the revisions as “pretty common” (audio - 1m,  Video - WSLCB, Video - TVW).
    • Board Member Jim Vollendroff shared his gratitude for the work of Conwell and staff, as “government-to-government contract[s] with the tribes are an important part of what we do” (audio - <1m, Video - WSLCB, Video - TVW).
    • During the December 19th Board Caucus, staff acknowledged working with Washington State Department of Health (DOH) representatives to craft the amendment to allow the Tribal store to have a medical cannabis retail endorsement.
    • WSLCB Policy and Rules staff were actively working on the code around medical cannabis retail endorsements through a rulemaking project initiated by the board on October 25th.
  • Samish Indian Nation Tribal Council Member Jenna Burnett offered remarks remotely, considering the compact a sign “of the continued partnership and collaboration we have with the great State of Washington that we hope to continue for all the generations to come.” The compact was expected to “bring much needed economic benefit to our Nation and to the State; and serve our people with a much needed medicine,” she said as she thanked board members (audio - 1m, Video - WSLCB, Video - TVW).
  • Board Chair David Postman expressed the appreciation of the board for Bennett’s “sharing those thoughts with us and good luck with the endeavor” (audio - <1m,  Video - WSLCB, Video - TVW) before members voted unanimously to approve the compact (audio - <1m, Video - WSLCB, Video - TVW).

• Policy and Rules Coordinator Jeff Kildahl briefed on the staff recommendation to accept a rulemaking petition regarding extension of certificate of analysis (COA) expiration dates before a vote by the board (audio - 9m, Video - WSLCB, Video - TVW).
  • The first public mention of the petition was on November 7th. Policy and Rules Manager Cassidy West called for public comments on December 5th.
  • In the meeting, Kildahl established that the petition had been submitted on October 30th by Jeremy Moberg, CannaSol Farms Owner, along with members of the Washington Sun and Craft Growers Association (WSCA) and the Cannabis Alliance who “provided a letter in support of the petition that provided some additional information…about the reasons for the request.” Kildahl stated the petition called for a change in WAC 314-55-102(9) to extend COA expiration dates from 12 to 18 months. Existing rules required cannabis products be tested by accredited labs and “pass a panel of quality control tests” which he said covered “pesticides, biological contaminants, moisture…potency and others tests depending on the type of cannabis product.” COAs were provided by labs to licensees, Kildahl continued, and expiration dates were “considered a good manufacturing [practice] across other industries… such as pharmaceuticals and cosmetics.”
    • Authority to accredit cannabis testing laboratories was set to change from WSLCB to the Washington State Department of Ecology (DOE) in 2024, however, a request bill from the Washington State Department of Agriculture (WSDA) had the potential to move authority into that department instead.
  • Extending this expiration date on COAs would help outdoor producers and those growing using “light deprivation,” Kildahl relayed. He explained, “as a result of these natural conditions they experience variable planting and harvest cycles” which “can vary depending on the strains of the products they grow and, and other factors such as weather” and “things that affect all farmers.” These growers, the petition argued, “experienced gaps between natural seasonal harvest cycles” which left “the processor without tested products, and those being products that are tested and have a current COA…that can be sold from a licensed processor to licensed retailer,” said Kildahl.
  • Accepting the petition didn’t guarantee that the expiration would be amended in rule, cautioned Kildahl, but it would let staff look into the possibility in a formalized way to “solicit and gather feedback from the public to assess whether this regulation should be revised.” Under the Administrative Procedures Act, he noted there were limits on how quickly agency staff could propose and implement a rule change, estimating it would take "a minimum of four and a half months" for a COA extension to take effect, “mak[ing it] a more significant and long term project than the immediate decision.” The rulemaking process would weigh factors such as:
    • “Alignment with the agency's goals and priorities”
    • “The immediacy of safety and environmental or security concerns”
    • “Potential for health and public health outcomes”
    • “Potential impact on illicit activity”
    • “Level of public interest”
    • “Whether the problems [were] already under consideration”
    • “The social equity impacts of the request”
  • Kildahl commented that staff had looked into “research studies related to…product degradation, stability, and microbial contamination to understand how time affects the different types of products.” Their conclusion was that “a variety of factors can affect the quality of the products including storage conditions, temperature, pH conditions, and light exposure.”
  • With board approval, Kildahl reported that “it will be critical to involve the research team and, and collaboration between the other divisions to evaluate the request.” He added they’d received “more than a dozen comments supporting the extension of the expiration date, and we did have two or three…from members of the public who expressed concern about possible health and safety impacts from older products, particularly concerns about biological contamination and mold and myco-contamination.”
  • Kildahl concluded staff were recommending approval of the petition so they could evaluate the concept in a rulemaking project.
  • Vollendroff stressed the importance of quality control testing, but regarded the topic as “reasonable” and was willing to have agency officials look at it further (audio - <1m, Video - WSLCB, Video - TVW). Postman concurred, “if there is something we can do along these lines that would help I'd be really open to that but I appreciate the questions that have come about,” and he expected them to be thoroughly vetted by staff and the Research Unit (audio - 1m, Video - WSLCB, Video - TVW).
  • Board members approved consideration of the rulemaking petition on COA extension (audio - 1m, Video - WSLCB, Video - TVW).

• Public comments centered around the social equity program at the agency, potential legal action, and what the agency would do with the results of a survey which was being conducted by the board in conjunction with the Washington State Department of Health (DOH).
  • Mike Asai, Black Excellence in Cannabis (BEC) Vice President, said he’d been a former medical dispensary owner “unjustly shut down in 2016.” He was in a “long haul” as a program applicant and had spoken to other applicants, finding “a lot of people are upset with things and…we just come and just speak on behalf of them.” Asai said that in 2024 “we got a lot of work to do working with the LCB ensuring the social equity program [was] a success,” then recalled a failure to prioritize “pioneers” during a 2016 licensing window merging the unlicensed dispensary and adult use retail markets. He felt it was the responsibility of WSLCB leaders “to make up for that” because it had been an “agency-led bill,” SB 5131, which “took the language away in prioritizing cannabis pioneers.” Asai hoped the board and staff were “healthy and well going into the new year” (audio - 2m, Video - WSLCB, Video - TVW).
    • On December 5th, Asai and BEC Co-Founder Peter Manning provided their perspective on the social equity program to members of the Washington State House Regulated Substances and Gaming Committee (WA House RSG) before leveling a similar critique at agency leaders directly on December 6th.
  • Christopher King, who last spoke to board members on October 25th, started by mentioning legal action he was going to take regarding the founding of BEC, including plans to refer to position titles used in Cannabis Observer observations to back up his arguments. He then talked about family warning him of racism in the Seattle region before he’d moved there, and felt the cannabis equity program was underwhelming, “no matter what kind of glad-handing you guys are all doing out here, and the so-called transparency you’re having now” (audio - 4m, Video - WSLCB, Video - TVW).
    • He wanted to hear more from Director Will Lukela—whose hiring he’d previously questioned—and possibly “congratulate him on maybe potentially setting up the loan program out there in Colorado.”
    • King then mentioned Washington CannaBusiness Association Executive Director “Vicki Christophersen, and her merry band of pranksters who had all of this whole thing set up so horribly 12 years ago.” Regardless of whether equity retailers opened their doors, “it doesn't change the 12 years that just happened to these people, and the loss of all that generational wealth. What about that?”
    • He asserted that African-American-owned The Hollingsworth Cannabis Company had gotten “in bed with Ian Eisenberg,” Co-Owner of Uncle Ike’s, “who sat there and played games with daycare centers and video games centers just to get his…stores where he wanted his stores.” King made clear he didn’t like that “and I'm allowed to tell you that I don't like that,” asserting “the bottom line is when the feds roll in here heaven help them…with whatever they’ve got, or allegedly got, with these licenses.”
    • “I look forward to seeing where the litigation goes as far as this cease-and-desist that Peter Manning had the nerve to send Aaron Barfield,” which he found “so abusive” before concluding by wishing the board a Happy New Year.
  • Damien Mims, BEC Executive Treasurer, who last spoke before the board on July 5th, addressed the social equity applicant process. He alleged “possibly 90%” of the documents sought by the third-party company which vetted and scored applicants, Ponder Diversity Group (PDG), had already been submitted to them earlier in the process. He had to “resubmit the requested documents, point out where they were already [in] an application file, and request a call back from the manager” to address remaining questions. Mims was told he’d entered all the necessary documents to be scored, but when he asked to see his final application score he’d heard “we're not authorized to do that” from PDG staff. “I sat back, waited and…made it through the process but the issue was the score that I had wasn’t the score I should have had. I didn't get all the points that I was supposed to” due to what he termed “a mix up in the process.” With no opportunity to verify his score before the retail allotments had been awarded, Mims requested WSLCB “do this in the future, maybe there needs to be some adjustment in that” (audio - 3m, Video - WSLCB, Video - TVW).
    • A new concern for Mims was the lack of financial support, leaving applicants waiting for funding “that was supposed to have been available the minute the licenses were available.” He called for adjustments so that the process moved more quickly, with more robust financial support as soon as applicants were ready.
    • RCW 43.330.540(3) specified WA Commerce officials be able to issue grants to “cannabis license applicants and cannabis licensees holding a license issued after April 1, 2023, and before July 1, 2024.” WA Commerce Life Science and Global Health Sector Lead Alison Beason also spoke before WA House RSG on December 6th, where she told lawmakers that she’d begun seeking a vendor to handle grants for businesses in October 2023. The request for proposals (RFP) would close “December 11th, and then hopefully be able to launch a program in February” of 2024, she claimed.
    • Postman stressed on December 14th that while lack of funding hadn’t been a barrier for applying for a social equity license, “the State of Washington is not in the business and will not be in the business of financing cannabis stores,” and that activity wasn’t “envisioned by the legislature” beyond the mentorship and technical assistance grant program.
  • Bailey Hirschburg, Citizen Observer and consumer advocate with the National Organization for the Reform of Marijuana Laws (NORML), noted that 2023 closed out the first ten years of cannabis regulation by WSLCB. “You've collected hundreds of millions of dollars and a lot of that has gone towards health care; substance prevention and research; and all types of local and state services,” he observed. Additionally, the agency had become “where…the rubber meets the road in trying to reconcile a really long legacy of a generational war on drugs that was waged along class and racial lines along with a push for an equitable, accountable, and thriving legal industry” (audio - 4m, Video - WSLCB, Video - TVW).
    • “A lot of what I have to say might be better regarded for the Department of Commerce, but they don't have public meetings with open comments,” said Hirschburg, leaving WSLCB to manage “the brunt of a lot of questions about the technical assistance grant program, mentorship, and now financing.” A quick review of loan and small business supports geared towards minority-owned businesses led him to conclude “almost all programs are federal” and state-level programs were routinely “intermixed with federal money.” Federal controlled substances policies against state-legal cannabis markets, he argued, left an “insurmountable obstacle to having access to any of those types of programs.” Equity applicants were “being shut out” of many financial support systems.
    • Acknowledging he didn’t know exactly what information WA Commerce representatives were sharing with equity applicants, Hirschburg held out hope that “staff are aware and are making applicants aware that there [were] some state level organizations which may have business grants” that applicants could qualify for. He pointed to a resource page from the Washington State Office of Minority and Women Business Enterprises which listed several state-level groups “that may have business grants” not reliant upon federal money.
    • Hirschburg next mentioned the Washington Small Business Development Center, which “almost certainly does get that federal money…but also does focus on state-level small business development.” Appreciating that “not every program or grant that these groups offer may be available to social equity applicants,” he still felt if even some of them could apply, WSLCB should help inform groups about their program, similar to how agency staff had reached out to local governments about being able to cite equity retailers. He asked that any letter convey “your understanding is probably that [applicants were] not going to get access to a lot of other small business development options.” This communication might “not change the judgment of these organizations, but I think it is one more thing that the LCB can do to make options available without picking winners.”
    • Hirschburg added that he’d appreciated the opportunity to contribute to the updating of cannabis consumer information through the WSLCB Public Education Work Group earlier that year, and he hoped to find revised information posted soon. Recognizing officials had prepared a consumer survey in collaboration with DOH staff which would collect responses until January 14th, Hirschburg advised having staff release a full spreadsheet of responses. “I know you'll get some good top level advice and feedback, but I think for transparency’s sake” it was best to release a full dataset, he remarked.