WSLCB - Board Meeting
(July 17, 2024)

Here are some observations from the Wednesday July 17th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Board members agreed to reduce the time given to each public commenter ahead of the July 17th board meeting (audio - 2m, video - TVW, video - WSLCB).
  • The board planned to reduce the public comment period to three minutes following several years of allowing individuals four minutes to share their stories and concerns with agency leaders. Board members last discussed the move on June 25th, citing the four minute allotment as a “permissive, liberal” standard among state agencies “run by boards.” Board Chair David Postman advocated for curtailing public speaking “in the name of smooth running operations.” Board Member Jim Vollendroff suggested long comment periods could also impact their ability to attend other meetings, but was “proud” WSLCB continued to be an agency with “many opportunities for public engagement." Board Member Ollie Garrett pushed for limiting board meetings to one and one-half hours to provide further structure to meeting agendas.
    • The Board last contemplated reducing public speaking time in 2019 but  didn’t pursue the change following complaints about the change by members of the public.
  • As he introduced the opportunity for general public comments on July 17th, Postman acknowledged the change as he asked those addressing the board to focus on the business of the agency and “refrain from any personal attacks.” 

• Most public comments centered on delays in rulemaking underway for cannabis product samples as well as charges of staff bias in implementing the licensing window prior to the social equity program.
  • Vicki Christophersen, Washington CannaBusiness Association (WACA) Executive Director (audio - 3m,  video - TVW, video - WSLCB)
    • Christophersen shared that WACA was a trade group of those who’d  “chosen to be regulated, chosen to be taxed, and chosen to hopefully partner with the State to continue to create a safe, regulated market that taxes products and keeps them away from kids.” She felt it “often gets lost in this conversation that every cannabis business in the state of Washington is a small business. And…the vast majority of businesses in the state are very small businesses, many with less than 50 employees and very many of them with less than five.” Christophersen suggested this was why her organization would submit petitions for rule changes, and was “very disappointed to hear the rulemaking timeline not mention the [Product] sampling rule set.” She noted the petition had been accepted by the board in the fall of 2022, and “eight months later, a CR 101 was filed. And seven months after that there was a series of two stakeholder meetings” in October 2023. The rules in question were “not as sexy as some of the other things,” conceded Christophersen, yet they touched upon a theme she pulled from board discussion: “how can we make the rules more streamlined, more efficient, [to] work better for licensees?” She pressed for specific changes to “vendor, educational, and internal quality control samples” and assured board members her membership wanted to actively help as “it's important to our businesses.”
      • The first focus group on the project occurred shortly after rulemaking started in March 2023.
      • Rulemaking delays became commonplace in mid-to-late-2023 following turnover and restaffing of the Policy and Rules team at WSLCB.
      • RCW 39.26.010(22)(a) defines ‘small businesses’ as those with “Fifty or fewer employees” or “A gross revenue of less than $7,000,000 annually.” Alternatively, the definition can be “certified with the office of women and minority business enterprises under chapter 39.19 RCW.” The federal definition varies by industry, sometimes based on federal agency standards. With cannabis businesses illegal under the U.S. Controlled Substances Act there is no industry standard, however a table of size standards available through the U.S. Small Business Administration, may offer insight into comparable sectors.
    • Bringing up a law on the transfer of cannabis laboratory accreditation authority to the Washington State Department of Agriculture (WSDA) as well as medical cannabis excise tax and policy changes involving Washington State Department of Health (DOH) staff, Christophersen said WACA members were wary that they “now have three agencies very deeply involved in the regulation of this industry.” She advised “consistency” as much as possible and for agency staff to avoid “duplicative” requirements.
      • Implementation of both laws was discussed by board members on July 16th.
  • Christopher King (audio - 4m, video - TVW, video - WSLCB)
    • King challenged Christophersen’s assertion that all cannabis licensees were small businesses, “I don't know if she thinks Uncle Ike's and Kaleafa are small businesses.”
    • “Who among you kept leases from places that you live more than a year or two,” asked King. “Nobody kept the leases, [which was] why trying to get rid of your declarations or affidavit portion, when it comes to DIA [disproportionately impacted areas] makes no sense.” The requirement would be especially hard for “Black and Brown, hands down,” he remarked, and called for board members to “get rid of it” while revising the social equity program scoring rubric.
    • Considering the reduction in public speaking time, King claimed that he liked his chances of taking a case against agency leaders to a jury trial, “I see bias all the time [and we’ll let the] court determine that but…you could have hired me as a consultant to deal with all this stuff.” He agreed with the board the four minutes had been a longer opportunity than other state agencies afforded, yet “nothing was broken there.” King felt the reason to reduce the speaking window had been “when there were Black Brown issues, and the LGBTQ you didn't cut that time and everything was three times as long… and there were times I wrote in, and you didn't call me either.”
  • Brooke Davies, WACA Deputy Director (audio - 3m, video - TVW, video - WSLCB)
    • Davies was grateful for the medical cannabis packaging guidance sent out by officials on July 12th as it responded to concerns she’d raised “as to how this would work moving forward.” Their members, and cannabis processors in particular, were concerned “if an edible [packaging] has already previously been approved [and] you are just adding the DOH compliant logo, it does not need to be submitted for re-approval” unless a licensee was adding “language, the mandatory FDA [U.S. Food and Drug Administration] language or update the serving size.” However, because “there are no products that won’t need to be resubmitted under the guidance,” indicated that according to their members, WSLCB guidance “doesn't filter anything out.” Davies requested that if standard logos and disclaimers were the only things being added that licensees be exempted from needing to start the labeling process over, as that may “clog it up” and lead to slower overall packaging approval. Her only exception was serving sizes which “should absolutely require a new submittal because that's technically a new product.”
  • Mike Asai, Emerald City Collective Gardens Founder and Black Excellence in Cannabis (BEC) Vice President (audio - 4m,  video - TVW, video - WSLCB)
    • Asai said BEC members had seriously considered the fairness of “allowing…current social equity licensees ability to move to different counties” but decided it would be “unfair to those who follow the rules who [scored] higher but did not receive licenses.” He alleged “since 2020 the LCB has misrepresented the issue of mobility. It is crucial for the credibility and the success of a social equity program that applicants remain within the county they originally selected, changing this now would erode trust in LCBs commitment to fairness and transparency.”
    • Asai also felt allowing retail title certificate holders who qualified as equity applicants to move their licenses wasn’t appropriate as people who had a certificate for years had been “aware of the risks associated with having a license in the city or county where licenses were banned.” BEC decided inclusion “would give them an unfair advantage and contradicted the principle of responsibility and planning that are fundamental” to the equity program. He opposed other changes to the rubric scoring around affidavits and lower points awarded for “median income” as lawmakers had wanted to help those who were “economically disadvantaged.” He summed up that the changes he sought “ensures fairness, integrity, and adherence to the program's financial goals.”
  • Peter Manning, BEC President (audio - 4m, video - TVW, video - WSLCB)
    • Manning began by saying that for “issues in the White community…we get a great response, we get adequate time to address those issues” before alleging that agency staff were “caught doing some racist things to our Black and Brown community. What I mean by that is, it's going to come out within the next couple of weeks that this agency purposely kept Black and Brown people out of the industry.” Manning named “Rebecca Smith, Nicola Reid, Jeanne McShane, Beth Lehman, and now [former Director] Rick Garza” as needing to be fired for signing “every one of those applications that were fraudulently handed out” in previous cannabis licensing windows.
    • He anticipated “Black people are probably going to be in an uproar,” but with the reduced speaking time “to voice any, any ill feelings they had towards what the agency was doing…Black people [we]re coming with a legitimate fight for legitimate reasons, we’re cutting down three minutes.” Manning commented the change made no sense to him and that the additional time was needed “to express the wrongs that…has been done to them.” Less public comment time at WSLCB was “no different than telling our kids the slavery didn't exist” in teaching American history. Manning claimed the situation would cause the African American community to “mobilize” and be more vocal at future meetings.
      • Manning and other BEC members had accused WSLCB staff of racial prejudice in their public comments for several years before the board agreed to lower individual comment periods.
  • Paul Brice, Happy Trees Owner and former Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) advisory member (audio - 3m, video - TVW, video - WSLCB)
    • Brice reiterated concerns he’d raised on June 5th over the inclusion of retail title certificate holders in the social equity program. Having felt certificate holders hadn’t spent time supporting the program, he argued “it seems like we keep getting further and further away from actually being able to help Black or Brown, but title certs, being able to just freely roam out” impacted where social equity stores could locate, “especially after the fact that they find their locations once they set up.” Brice didn’t think title certificates had been discussed enough in developing the social equity program, and asserted the program was “not for them.”
    • Another problem for Brice was how DIAs were assessed with qualifying areas changing each decade between 1980 and 2010: “there's no way you should take away later the fact, especially if you again survived the DIA, made it a better place.” He touched on the social equity plan and scoring criteria, objecting to applicants who got points under the scoring rubric based on someone who was a minority owner of an equity license. Brice added there’d been “16 licenses that went out to groups, multiple people that just took advantage [by including] someone who will have no bearing or no say to just make this to where” they could score higher under the rubric.

• Board Chair David Postman briefly replied to longstanding accusations of prejudice by WSLCB officials which he hadn’t seen substantiated (audio - 1m, video - TVW, video - WSLCB).
  • Postman made it clear that “I really object to people listing off names of people making allegations about—and particularly since they've been doing it for years and never done such evidence—some of those people aren't here.” He didn’t believe the staff in question had been “working in a biased way. And it's unfortunate for those hardworking employees to have to listen to their name being dragged out on this for things that they've had nothing to do with in some cases.”