WSLCB - Board Caucus
(July 9, 2024)

Here are some observations from the Tuesday July 9th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 4 takeaways:

• Policy and Rules Manager Cassidy West delved into numerous changes made to the SB 5080 draft rules along with an updated timeline for implementation (audio - 10m, video - TVW, Presentation, Rulemaking Project).
  • SB 5080 was signed into law in May 2023 and the WSLCB Board initiated the rulemaking project in November 2023. However, the effort was one of many rulemaking projects to be delayed by Policy and Rules staff.
    • Along with changes to definitions and applicant criteria, the bill also allowed for more retail licenses and “up to 100 cannabis processor licenses immediately,” as well as “up to ten cannabis producer licenses, which must be issued in conjunction with a cannabis processor license” starting in 2025.
    • Staff provided an update on the equity program on April 24th and mentioned a survey by Licensing staff which resulted in multiple responses about the draft rubric. WSLCB leaders then convened a focus group on the implementation on May 15th in which several participants called for revisions to the applicant scoring rubric, particularly favoring those who’d owned medical dispensaries before most were closed down following a change in the law in 2015.
    • A second focus group on May 22nd, held online and in-person at Highline College, proved to be even more contentious, especially around the issue of retail title certificate holders who qualified as equity applicants.
      • Certificate holders previously held licenses which were barred from opening due to local ordinances where they attempted to operate. They had been permitted to activate their licenses under the social equity program if they qualified as equity applicants.
  • During caucus, West told board members the most recent draft of the rules had been changed based on focus group feedback, including:
    • “Updated some definitions to improve clarity,” specifically to “remove some of the ambiguities and make it easier for the applicants to understand the requirements.”
    • The “new definitions and previously undefined terms” of ‘household income’ and ‘social equity registrant’ were incorporated to “enhance clarity and comprehensiveness,” as well as overall “fairness in the process.”
    • “We’ve expanded the list of acceptable documents demonstrating eligibility criteria and qualification, for example affidavits can be used” as proof of a person’s cannabis conviction if “other documentation is not available,” a move to allow “more applicants to qualify for the program.”
    • A new registration process would utilize an online portal instead of the “initial application requirements to reduce barriers” and make the program more “accessible.”
  • West went over some specifics of the next online registration window under development, stating it would be open “for 30 calendar days” with the option for additional time added at the board’s discretion “based on market demand and license availability.”
    • She explained that registrants who met two out of four requirements in statute would have their applications scored, but “no duplicate points if more than one registrant meets the same criteria.”
    • West mentioned that the social equity contractor, “has the discretion to determine the form, manner and timeframe for submitting application materials.” This was a “flexibility” intended to let the vendor “streamline the review process,” she added.
      • On June 26th, WSLCB released a request for proposals (RFP) for the social equity contractor role, with an informational webinar for potential bidders scheduled for Monday July 15th.
    • A “remedy period” would be built into application scoring, West said, and applicants could submit additional documentation to “improve their final score,” a change to “further transparency and fairness in scoring.”
    • Ties among top scoring registrants would be decided through a “double blind lottery” to be conducted by an “independent third party” and not the social equity contractor. “Prior to the legislation, the double blind lottery was used to break a tie amongst applicants with the highest scores in the county,” she said, “but that’s no longer relevant,” since those applying under SB 5080 would be empowered to “move anywhere statewide.”
    • West indicated the approval process differed slightly, including a clearer “withdrawal letter” to further “consistency in communication.” Individuals who had their registration or application withdrawn or denied had the opportunity to appeal the decision within 20 days of notification, she added.
  • To assist registrants in securing financing, West described how they’d be permitted to modify as much as “49% of business interests,” but changes had to be “submitted to the board before applying for the social equity license.” The intent, she stated, was to help the viability of equity licenses.
  • SB 5080 required WSLCB to determine a new “county threshold” for cannabis retail to ensure “adequate access and discourage illegal purchases,” commented West. Thresholds were to be calculated every three years “beginning July 2029, and thresholds will be posted online and made available to the public,” she said. Additionally, 90 days after the application window closes in 2025, West reported that applicants—including those approved under the original 2020 law —would have one-time mobility to relocate anywhere in Washington state.
    • West’s presentation identified Whitney Economics as the firm WSLCB contracted with to determine the thresholds.
  • Retail title certificate holders would be permitted to relocate anywhere in the county to which their license had been assigned, but West shared that they would have to put in a new application to the social equity program in order to take their license to another county. She noted that for the certificate holders “scoring is not required, just qualification” by the program.
  • West mentioned the social equity plan and license fee reimbursement available to all cannabis licensees, but submitting a plan was “no longer required to qualify for the program.”
  • West then addressed remaining stages in SB 5080 implementation:
    • A new survey on the draft rules changes would be opened on Thursday July 11th and closed on the 18th.
    • A CR-102 with proposed rule changes would be presented to board members on July 31st, and a public hearing would be hosted on September 11th.
    • The CR-103 to adopt changes into rule was set to be offered on September 25th, and changes would take effect on October 26th.

• Looking at the social equity program scoring rubric, Licensing Social Equity Manager Aaron Washington laid out the rationale behind staff modifying some scoring criteria while maintaining others (audio - 7m, video - TVW, Presentation).
  • Washington reviewed how staff had arrived at some of the modifications to the scoring rubric, emphasizing the community feedback they’d received and the history of the rubric itself, which was first proposed as part of Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) recommendations before being incorporated into rule.
  • As SB 5080 had expanded the equity program, Washington stated the law also provided agency officials with an opportunity to further modify the rubric based on public responses to the program “and data collected from the applicant experience survey.” He suggested there were minimal qualifying criteria in the initial registration “before being scored under the rubric criteria.” Washington then identified what had changed, and what hadn’t, under the proposed draft rubric.
    • Category 1 was worth 40 points for any amount of time, “even one day,” for living in a disproportionately impacted area (DIA), although the majority of public comments on the topic “suggested there should not be any points for those living in a DIA less than five years.”
    • Category 2 and 2(a) regarded applicant family members with cannabis convictions had been slated to be combined with drug convictions but most public responses were against the change. Cannabis arrests remained the “focus of the program” and would be “scored the highest” under the proposed rubric.
    • Category 3 and 3(a) would be “kept separate using the same considerations” around cannabis and drug convictions used for categories 2 and 2(a).
    • Category 4 on conviction sentencing had been changed to remove home confinement as it was not used as part of sentencing in Washington State, but following public pushback that the punishment had been used for cannabis offenses in other states, consideration of home confinement would be part of application scoring, and “garner 30 points.”
    • Categories 5, 6, and 9 were proposed to be deleted.
      • Regarding categories 5 and 6, input around consideration of household income or loss of employment had been mixed. Points for category 5 had already been lowered from 40 to 15. However, with several responses indicating the difficulty proving this qualification, it was going to be removed entirely.
      • Category 9, related to existing ownership of a cannabis license, was also proposed to be removed.
    • There were significant calls to increase points awarded in category 7 related to past ownership of medical dispensaries. Staff instead advocated for removing language about operating a dispensary, but the category didn’t get additional points. However, with the overall total points in the rubric now lower at 255, the “weight” of points for dispensary ownership were characterized as greater.
    • Category 8, related to applicants who’d previously applied to the equity program but not been prioritized, would be maintained at 15 points.

• Compliance and Adjudications Manager Nicola Reid reviewed the demographics and metrics which informed officials’ decision-making (audio - 5m, video - TVW, Presentation).
  • Reid started off by showing the rubric points as percentages, with variables such as how long an applicant had resided in a DIA or sentencing for a cannabis conviction, and remarked that staff felt “the three weighted criteria” had been kept “in line with the intent” of SB 5080 and the equity program. The largest percentages of points could be awarded for periods of incarceration, convictions, or time residing in a DIA, she indicated. Reid suggested other criteria were more “equally balanced” by awarding a set amount of points with no variability.
  • Turning to applicant demographics, Reid relayed that applicants received an optional anonymous survey which sought to gather information about the “self identified race” of everyone on an application. 641 individuals had responded to this, she noted, and the largest proportion, “47% identified as Black or African American.”
  • Reid also acknowledged that the initial WA SECTF recommended rubric had been changed by WSLCB. Even though this was the second draft of rubric revisions, she cautioned that the document might change again based on the additional survey set to be released on July 11th.
  • Following the caucus, officials published a Medium article, “Additional Updates on Social Equity Rulemaking Timeline.”

• Board members weighed in with their thoughts on the revised rule language, as well as questions for next steps on the project and mobility of equity licenses.
  • Board Member Ollie Garrett voiced her gratitude for the work of staff, recognizing they’d “worked really hard” on the proposal and considered a lot of feedback. She added that responses had varied by topic, with some issues receiving more attention than others, and expressed hope there would be greater participation in the upcoming survey (audio - 1m, video - TVW).
  • Board Chair David Postman reinforced that there were still opportunities for the public to weigh in on the rulemaking project. West commented that as the survey was sent out, written comments on the draft could still be shared through July 18th via Rules@lcb.wa.gov or LicensingSocialEquity@lcb.wa.gov. She added that once the board approved a CR-102 there would be a new public comment period and hearing scheduled (audio - 2m, video - TVW).
  • Board Member Jim Vollendroff offered the view that "greater access and more concentrated [retail] density" could create harms, and that board members needed to be “thoughtful” when it came to approving more equity licenses. West noted this would be part of the license threshold as envisioned in the draft rules. Reid then shared that the agency would also be bound by any local ordinances against cannabis businesses which had been put in place before equity applicants had applied (audio - 1m, video - TVW).
    • A contentious addition to SB 5080 before passage in the Washington State Senate was a process to keep WSLCB from issuance of licenses in places with “pre-existing” ordinances against cannabis businesses. The second round of social equity licensing would be the first where cities and counties could stop licensing altogether.

Here are some observations from the Tuesday July 9th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• Research Specialist Tyler Watson presented on the 2023 Healthy Youth Survey (HYS) results, starting with background on the role WSLCB played in the survey.
  • Watson told board members he’d be giving a “results snapshot” and had a “simple agenda today just to describe the Healthy Youth Survey 2023 background and context and then review” some of the substance use responses (audio - 1m, video - TVW, video - WSLCB).
    • Watson, formerly the Washington State Health Care Authority (WA HCA) Prevention Research and Evaluation Manager, gave a May 2022 briefing on the previous survey to board members before joining WSLCB in early 2024. Staff and a guest speaker also gave a board presentation on young adult survey data in July 2022.
    • Washington State Department of Health (DOH) representatives also hosted a webinar on 2023 HYS results on March 20th after Watson had briefed members of the WA HCA Prevention Research Collaborative. Information on the 2023 HYS data dashboard added on March 15th showed evidence that a decline in cannabis use among kids during the coronavirus pandemic had held steady. Average lifetime and past 30-day use of cannabis among surveyed high schoolers was lower than the national average according to data from the federal Monitoring the Future study.
  • Watson provided background on the long running survey of 6th, 8th, 10th, and 12th grade students across Washington state. The “very, very large collaborative project” was conducted through WA HCA, and WSLCB was one of several agencies to contribute to the survey’s development and analysis of the results, noting “folks involved here at LCB [were Public Health Education Liaison] Kristen Haley, [Research Manager] Sarah Okey and myself.” State officials had contracted with Looking Glass Analytics as well as “state schools, community prevention and wellness initiative coalitions, community based organizations, ESDs [educational service districts], health jurisdictions, tribes, and then we have a great communications team [with] a point person from each agency to help us communicate some of the results of this project, as well,” said Watson (audio - 8m, video - TVW, video - WSLCB).
    • The oldest reference Watson had to HYS was a picture from 1988, and he talked about how substance use was one of many “health behaviors” surveyed. He spoke to the survey development process, how HYS went from being “cobbled” together from different state surveys to a document mandated under state law with dedicated funding allocated by lawmakers. Watson also stated the survey covered mostly public schools, but some tribal, private, and charter schools were also included.
    • Since the coronavirus pandemic, Watson indicated that HYS was conducted in odd-numbered years, rather than even-numbered, which “changed our grade cohort…instead of asking the same group of students every two years” they were asking a different group of students. Coupled with several methodology changes, the team included a “disclaimer statement throughout our materials that something like this trend data from before and during/after the pandemic should be interpreted with caution, because we know there was a lot of changes that occurred from our 2018 survey.”
    • Watson explained that since the survey of more than 200,000 students was concluded, “we've been doing a lot of results sharing in the springtime” and had finished “pretty much all of our products that are going to be produced or have now been posted to the website.” The “public results are available” for counties and ESDs, but Watson indicated “we don't publicly post school district and school level results, those are instead sent directly to school.” He relayed that their team had already begun survey revisions ahead of finalizing the next survey which would be conducted in autumn 2025.
    • The survey results included topical ones with “some high level themes,” and people could conduct their own analysis using “a cube IQ analytic tool that allows you to cross tabulate, for example, how many students who identify as this way also report this behavior,” said Watson.

• Watson went through the results snapshot of 10th graders in HYS which addressed mental health; cannabis and other substance use and access; plus vaping disparities among demographic groups (audio - 11m, video - TVW, video - WSLCB, Presentation).
  • The initial narrative State officials offered was that results showed “signs of hope and resiliency among Washington students” and that the HYS team felt “we actually saw some good news.” While there were concerns, Watson commented “we saw a lot of improvement in a lot of different indicators” and an overall improving picture of mental health among respondents, the “best we've seen in 20 years and signs of hope for young people.” But the headline he had for youth substance use “remains 50% or more below what we saw pre-pandemic, which…means the 2018 survey cycle.” Watson continued, stating what “we consider current use of substances for alcohol, marijuana, vaping, and cigarettes all basically stayed the same, we didn't see significant change from 2021 to 2023.”
  • For some of the substances, including cannabis, “it looks like we're a little bit lower than national results,” he observed, as well as the “perception of harm” which had been trending up. “And I use the term ‘marijuana’ intentionally,” clarified Watson, “because when we do student focus groups, we haven't yet heard from students that ‘we actually use the term cannabis’ now, that might change for 2025.”
  • Watson offered data points that approximately “9% of 10th graders said they currently use alcohol, 8% said they currently use marijuana, 8% said they currently vape, 3% said they use smokeless tobacco, and 2% said they use cigarettes.” Delving into specifics on marijuana use (factsheet), he said:
    • “Using marijuana at least once in the past month, increases up to 16% for 12th grade, about 8% for 10th graders, not as much of a decline over time as we saw for alcohol, but we did see again a big drop once we switched grade cohorts [and] currently about 8% of 10th graders saying they they currently use marijuana.”
    • “The most popular form of using marijuana is vape, vaping now, followed by smoking, eating, dabbing, and drinking, and then some other way.”
    • “As a prompt from Board Member Vollendroff, I also…charted this so you can just see how popular vaping became,” narrowly overtaking smoking as the most common consumption method.
    • “Easy access has also decreased over time…we would want there to not be very easy access…about 31% of 10th graders [said] it's easy, sort of easy, or very easy to get marijuana…mostly from friends,” followed by access because “someone sold it to me, gave money to someone, from someone older not related, from home without permission, with permission, older sibling at a party, and bought it from a store.”
  • Watson explained that students who reported vaping were using “mostly nicotine products,” but cannabis items were also prevalent, and “14% said they don't know.” He added that disparities were also prominent, with vaping being twice as common among ‘Sexually or gender diverse’ and ‘Migratory working family’ groups, plus three times as common among students ‘Having one or more disability.’ He also noted an exception in the downward trend in “other illegal drugs, painkillers and prescription drugs, they did increase significantly. But we're still talking about under 3% of students reporting use of these substances.”
  • According to Watson, WSLCB staff had pushed for “new questions of what are students reporting, are they using these other marijuana products” with 2% of 10th graders responding that they had used a cannabinoid product such as delta-8-THC.
  • “So we largely see things moving in the right direction. With a few exceptions…we still see large disparities among student demographic groups. When we think about youth, when we think about access, there's very, very different outcomes across some of these demographic groups.”

• Board members responded to the new information and posed questions about WSLCB input on the HYS, and patterns in youth vapor use related to cannabis.
  • Board Member Ollie Garrett shared her surprise at “how many at 10th grade level are getting alcohol and, and vaping with, at home…with permission” (audio - <1m, video - TVW, video - WSLCB).
  • Vollendroff—who’d taken an interest in the WSLCB contribution to HYS in his first survey briefing in 2022—praised Watson, remarking “we're so lucky to have you on board with our research team” given Watson’s background with the survey at WA HCA. Vollendroff was curious who’s “the decider in this group? At the end of the day? Is it consensus based decision making, or who really is in the driver's seat at the Healthy Youth Survey with so many partners?” (audio - 3m, video - TVW, video - WSLCB)
    • Watson answered that they "strive for consensus" and in circumstances where HYS contributors needed “one person from each agency to come to the table and make a decision” former Public Health Education Liaison Mary Segawa had taken that role.
    • Vollendroff agreed that Segawa had been “heavily involved. But with you on board, in particular, I really want us to be at the table…a driver in this in terms of what information do we need to make good public policy decisions on…products that we regulate.” He reflected that a “decrease in use over time and increase in perception of harm, a decrease in access, those all sound like we're doing really good stuff in this state.” Vollendroff told Watson he planned to follow up with WSLCB staff involved in HYS with additional comments and questions.
    • Haley clarified that she was the official leader for WSLCB representation on the HYS team, and “if there's ever anything that you need…us to advocate for, or lean on, that should come through me.”
  • Postman pointed to the high number of youth reporting using vapor products and asked “what is that compared to on the adult side of usage,” or “how many cannabis consumers out of our 502 stores are doing vape over anything else?” (audio - 3m, video - TVW, video - WSLCB)
    • Watson said he’d looked at that: “vaping has also increased over time as a preference” for young adults, the other age group he’d focused on, “but not as much as adolescents.” Postman agreed he’d seen a “sharp” increase in previous surveys involving vapor items, “one of the questions I have is there, is there something in that result that should prompt us to look at vape, cannabis vape in particular, if that seems to be so popular among under age and younger users?” Watson agreed its popularity made the products worthy of greater scrutiny, especially as use of vapor products “continued to increase over time.” He guessed they could be used more covertly and with ease, “also differentiating by age group, I think is also an important thing to do [because] preference also changes as, as you go up in the age groups, for example, I think edibles become more popular as well.”