WSLCB - Board Meeting
(September 16, 2020)

• Hear public comments requesting new privileges for retail title certificate holders from Washington State Commission on African American Affairs (CAAA) Commissioner Paula Sardinas (audio - 3m) and WSLCB Cannabis Advisory Council (CAC) member Angel Swanson (audio - 3m).
• Access Cannabis Observer’s segmented audio and all rulemaking documents below. We’ll have more Observations to share tomorrow.

Here are some observations from the Wednesday September 16th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• During general public comment, a Commissioner on African American Affairs and a cannabis retail title certificate holder called for the ability to reinstate certificates issued in ban and moratorium jurisdictions as retail licenses in more cannabis-friendly locales.
  • Cannabis Retail Title Certificates were created via board interim policy BIP 04-2018 in April 2018. At that time, the Board also opened rulemaking to make the certificates permanent with a projected effective date in September 2018. The rulemaking project sat idle until June 24th when Policy and Rules Manager Casey Schaufler told board members the BIP was “sufficiently addressing the needs of licensees in local jurisdictions with retail cannabis sales prohibitions.” He asked for withdrawal of the CR-101 on July 8th which the Board approved, effectively closing out the rulemaking project. At issue in the following public comments was a clause in the BIP which states, “The Title Certificate holder may only reinstate a cannabis license in the jurisdiction where the license was originally issued.”
  • Paula Sardinas, Washington State Commission on African American Affairs (CAAA) Commissioner (audio - 3m). Sardinas began by speaking of HB 2870, social equity legislation passed in the 2020 legislative session, thanking those who helped pass the law while acknowledging that “we know with COVID it’s kind of slowed down the process of some of the work that we wanted to do to make sure that this legislation goes forward.” She continued, saying CAAA had begun hearing from title certificate holders who wanted to know how the law’s requirement that the task force define social equity applicant qualifications for 34 available licenses would impact them. Sardinas pointed to Section 2(2)(b) of the session law, which reads those “holding an existing marijuana retailer license or title certificate for a marijuana retailer business in a local jurisdiction subject to a ban or moratorium on marijuana retail businesses may apply for a license under this section.” She encouraged the ability to “move those licenses from areas of bans or moratoriums into the social equity plan” and asked the Board for “an opportunity to address some of those license holders or to have some sort of a reconsideration for some of those folks that might need more immediate relief." Board Chair Jane Rushford thanked Sardinas and promised someone would get back to her about the concerns she’d raised.
    • Sardinas and WSLCB Board Member Ollie Garrett were appointed to represent their respective agencies on the Washington State Legislative Task Force on Social Equity in Marijuana. Both were invited speakers at the City of Seattle’s Cannabis Equity in Our Community forum on February 22nd. Sardinas had subsequently been consulting with Director Rick Garza and agency staff on the implementation of HB 2870 and the agency’s outreach to black, indigenous, and people of color (BIPOC) communities.
  • Angel Swanson, WSLCB Cannabis Advisory Council (CAC) member (audio - 3m). Speaking as a retail title certificate holder, Swanson reminded the Board that she was “part of the situation that Commissioner Sardinas just expressed" who had been “waiting to move my license, now, for five years.” Saying that she’d done everything possible “to help move this process forward for people like me,” Swanson explained they’d been left in a “holding pattern” for years after first raising the possibility of moving licenses between jurisdictions. She referenced a January 2018 caucus meeting where challenges besetting retail licensees in ban and moratorium burdened jurisdictions were brought before the Board, an event which she felt drew a “stunning” number of impacted licensees who were “people of color and women.” Swanson made a “formal request to reassign our allotment/allocation for our cannabis title certifications or licenses from our banned area to an area that will accept us” arguing that “in light of the new equity bill...as a current certificate holder we shouldn’t need to wait for the task force as outlined in [HB 2870] to be convened.” Swanson asked board members for “immediate relief” from the “long, arduous, and financially debilitating process” of indefinite title certification.
    • Swanson was a driving force behind the organizing of impacted licensees from ban and moratorium areas to advocate for the creation of cannabis retail title certificates, presenting the concept to the Board in January 2018 along with representatives from The Cannabis Alliance and CORE. At that time, she recommended retail licensees in prohibitive areas be allowed to move their license to friendlier jurisdictions.
    • Director of Licensing Becky Smith presented the cannabis retail title certificate framework to the Board at caucus in April 2018 the day before adoption of the BIP. Swanson questioned Smith about the certificates at a May 2018 CAC meeting shortly thereafter (audio - 4m). She raised the issue of moving her retail license with Garrett in December 2019. Garrett said that Swanson had been told by a Lewis County official it would be “over his dead body before that ban is lifted.”
    • Not mentioned in either of their public testimony, Sardinas’ consulting firm FMS Global Strategies had been “representing Ms. Swanson’s case pro-bono.” On July 13th, Sardinas emailed WSLCB Director of Legislative Affairs Chris Thompson to communicate that Swanson and other certificate holders “cannot afford to wait.” She asked for a “path forward to help Swanson relocate her certificate to Tacoma, WA. We are simultaneously working with the City of Tacoma, who will vote [July 14th] to take action under HB2870 to increase their number of retail stores.”
    • Swanson was the CAC representative of the disbanded Marijuana Business Association (MJBA) but was absent from all three CAC meetings in 2019.
• The Board agreed to again extend an emergency prohibition on vitamin E acetate in cannabis vapor products.
  • The WSLCB had maintained a ban on vitamin E acetate in vapor products since October 2019 when the Washington State Board of Health (SBOH) passed an emergency prohibition on the compound’s use in vapor items. On February 5th the Board revised emergency rules around the ban and extended them again on May 27th, Schaufler discussed the rules up for extension during the September 15th Board Caucus.
    • At publication time, permanent rules prohibiting vitamin E acetate were still under development by SBOH as of June 10th.
    • At publication time, WSLCB’s more general framework for the prohibition of hardware devices and substances granted by HB 2826 remained at the CR-101 stage (Rulemaking Project).
  • Schaufler reported that the active emergency rules would expire on September 24th and asked for an extension, saying they were “unchanged in substance and content” from what had been previously approved. He noted extensions would maintain the rules for an additional 120 days from the date of filing with the Washington State Office of the Code Reviser. The Board voted to extend the four emergency rules without additional comment (audio - 2m).
    • Prohibition - Vitamin E Acetate (Rulemaking Project)
    • Ingredient Disclosure (Rulemaking Project)
    • Prohibition - Vitamin E Acetate - Enforcement - Processors (Rulemaking Project)
    • Prohibition - Vitamin E Acetate - Enforcement - Retailers (Rulemaking Project)
• WSLCB’s proposed Education and Consultation Program received a quiet public hearing with no comments.
  • The Education and Consultation Program (Rulemaking Project) was originally known as the Voluntary Compliance Program (VCP) until August 5th. The rulemaking project was started in mid-July 2019 following a legislative mandate as part of the Enforcement reset bill, SB 5318. Section 4 of the session law appended RCW 69.50.342(3) which states:
    • (3) The board must adopt rules to perfect and expand existing programs for compliance education for licensed marijuana businesses and their employees. The rules must include a voluntary compliance program created in consultation with licensed marijuana businesses and their employees. The voluntary compliance program must include recommendations on abating violations of this chapter and rules adopted under this chapter.
  • WSLCB hosted a listen and learn forum for the project on May 28th with Policy and Rules Manager Kathy Hoffman telling board members “many” suggestions were included before the project’s timeline was revised on July 8th. At the start of September, Hoffman reported no comments on the program had been received by the agency.
  • Hoffman introduced the public hearing and reviewed a memorandum on the rulemaking project, saying that WSLCB “began considering revisions to marijuana enforcement guidelines in late 2018. Those efforts were extended by the passage of [SB 5318] during the 2019 regular session of the legislature” which provided “direction for enforcement guideline redesign. It also provided an additional framework to perfect and expand existing programs for compliance education offered to marijuana licensees and their employees” (audio - 4m).
    • The proposed rule changes conformed with RCW 69.50.561, the statute defining the scope of the board's ability to “adopt rules on frequency, manner, and method of providing consultative services to licensees” and could “include the scheduling of those services as well as the prioritization of requests for services while maintaining the enforcement requirements” of RCW 69.50.
    • Hoffman said the rule change would create a new section, WAC 314-55-013, to be titled “The Voluntary Marijuana Licensee Consultation and Education Program” and remarked that the rules were the result of “consultation with several marijuana business owners, industry representatives, and others” between November 2019 and February 2020 but that “to date, no written comments have been received on this proposal.”
  • There were no questions from the Board and Rushford commended Hoffman’s “very impressive process, we don’t have anyone signed up for the public testimony.”