WSLCB - Board Caucus
(July 16, 2020)

Here are some observations from the Thursday July 16th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

• The Board signed a new cannabis compact with the Sauk-Suiattle Indian Tribe.
  • WSLCB Tribal Liaison Brett Cain presented the Sauk-Suiattle Indian Tribe Marijuana Compact to the Board noting “LCB staff and staff from the Attorney General’s office worked closely” with the Tribe’s attorneys. He said the compact had been “reviewed” by the Washington State Department of Revenue (DOR) and signed by Tribal Chair Norma A. Joseph. Cain promised to deliver the countersigned compact to the Office of the Governor after the Board voted to approve it (audio - 2m).
    • The most recent tribal cannabis compact approved was in December 2019 with the Nisqually Indian Tribe. The Suquamish Tribe extended their compact with the state on May 22nd.
  • Later during his update, Board Member Russ Hauge mentioned the “tribal consultation policy” effort being led by Cain. He indicated that during the prior week “we met with reps from the Muckleshoot Tribe and this afternoon we’re meeting with reps from the Suquamish Tribe.” The deliberate process aimed to ensure “everyone’s heard and understands exactly what we’re trying to accomplish.” The consultation policy was being developed in lieu of more formal Tribal Advisory Council meetings, briefly revived in April 2019 (audio - 1m).
    • Hauge elaborated on the policy in November 2019. At that time, he felt the consultation policy had the agency “focusing on the tribe” and if WSLCB were to “keep track of our issues and just set up a general consultation 2-3 times a year, like we do with the [Alcohol and Cannabis] advisory councils, that would be a better vehicle.”

• Board Chair Jane Rushford invited Executive Assistant Dustin Dickson to review the Board calendar for the remainder of the year.
  • Along with several other items mentioned during the meeting, Dickson’s review provided an outline of events to expect through the end of 2020 (audio - 5m).
  • WSLCB Cannabis Advisory Council (CAC). The agency may host a CAC meeting in late September prior to the fall outdoor cannabis harvest. Dickson added, “We may actually have two more [CACs] over the course of the year” with one in “very late September” and another in “the early part of December.”
    • The CAC was last convened in December 2019.
  • Cannabis Social Equity Task Force and Associated WSLCB Outreach.
    • Board Member Ollie Garrett told the group she wanted a CAC meeting “sooner than later” to discuss delays which have prevented the Cannabis Social Equity Task Force from convening. “Nothing has really transpired just yet” but they could tell the CAC members “this is where we are and to just have a roundtable discussion around it” (audio - 2m).
    • Director Rick Garza said that Director of Communications Brian Smith and Director of Legislative Relations Chris Thompson had added information about the task force to WSLCB’s site. “And internally we have a small work group made up of, obviously, licensing, enforcement, and some of our legal/policy team” to share information with the task force once it's been formed. He noted that the topic had come up when agency staff engaged with trade groups. Garrett asserted that "I want to be more proactive with dialogue" with stakeholders rather than “just putting messages out” (audio - 3m).
    • Garza discussed the contracting of Caprice Hollins from Cultures Connecting for “consulting and facilitation services in support of a Social Equity Task Force and continued Diversity, Equity and Inclusion (DEI) efforts.” He mentioned Hollins handled WSLCB’s implicit bias training for staff in 2019 and was hired by the agency “for a series of meetings we’re putting together in the community.” Thompson was planning contingencies in the event large gatherings continued to be prohibited due to COVID-19 restrictions. Remote events seemed likely in Garza’s view as Washington officials were “struggling with the rise in the number of positive cases” as evidenced by recent remarks from Governor Jay Inslee and his extension of proclamations relating to COVID-19. He expected a “draft proposal” of the meeting format and schedule would be shared with the Board in the next week (audio - 4m).
      • Later in the day on July 16th, the Office of the Governor announced renewed restrictions effective Monday July 20th which limited social gatherings in counties that had achieved Phase 3 from a previous maximum size of 50 people down to 10.
  • Executive Management Team (EMT) Meetings. Rushford acknowledged the Board had not hosted an Executive Management Team (EMT) meeting since February 12th but felt that agency staff had been diligently working despite restrictions due to the coronavirus outbreak. As the agency addressed virtual meetings and work-from-home challenges, Rushford said “I feel it's important that we bring [EMTs] back.” She and Dickson were “looking ahead to September” to refresh the EMT format, though she expected “we probably won’t do once a week, we don’t need to do that.” Nonetheless, Rushford expressed a need for “meaningful” meetings of WSLCB leadership. “So, more on that in a couple weeks” (audio - 2m).
    • Cannabis Observer Founder Gregory Foster tracked the disappearance of EMT meetings in The Week Ahead and asked the Board to bring them back during general public comment at the July 8th Board Meeting.
  • 2021-23 Biennium Budget Projections. Garza reported that the Washington State Office of Financial Management (OFM) had instructed agencies to send in projections of a “50% cut” for the 2021-23 biennium budget. He said most of WSLCB’s divisions had prepared materials with “what that looks like.” Garza believed completed projections were required to be submitted to OFM by the “middle of September,” though they would be presented to the Board first (audio - 1m).
    • The Washington State Economic and Revenue Forecast Council (ERFC) released an Economic & Revenue Update later in the day on July 16th.
  • Cannabis Regulators Roundtable. The next biannual Cannabis Regulators Roundtable, initially scheduled for June 1st in Portland, would be a virtual event occurring “two hours a day over the course of the week” in August.
    • The last roundtable was hosted in Baltimore, Maryland at the end of 2019.
  • Prevention Community Engagement and State Prevention Summit. Dickson reported that “prevention roundtables and outreach” had been planned for October and November. Rushford added that WSLCB Public Health Education Liaison Sara Cooley Broschart had already begun organizing the roundtables and planned to attend the Washington State Prevention Summit in November.
    • Broschart provided a survey of the agency’s prevention community engagement at the January 8th Board Meeting.
  • Cannabis 2.0. Dickson reported that the Board may return to Chair Rushford’s Cannabis 2.0 project in August or September.
    • The Board initiative was last mentioned on January 28th and had not been discussed at length since November 2019. The thesis of the project was to engage state agencies involved in cannabis regulation to collaboratively develop the next generation of cannabis policy.

• Policy and Rules staff provided a status report on WSLCB rulemaking during which they announced retail excise tax deferrals would be coming to an end and confirmed the board interim policy on unapproved traceability workarounds would be rescinded the following week.
  • The last rulemaking update was on July 9th. 
  • Deferment of Excise Tax Payments (WSR 20-08-087, audio - 2m). Policy and Rules Manager Kathy Hoffman commented that the agency’s emergency rules enabling deferment of excise tax payments for alcohol, tobacco, vapor, and cannabis licensees adopted by the Board on March 27th would not be renewed as she understood Proclamation 20.26 would not be extended by the Governor again. The agency’s emergency rules would expire on August 1st.
  • Rescission of Board Interim Policy (BIP) 13-2019 (audio - 2m). Staff first mentioned the agency’s intention to end an interim policy allowing unapproved workarounds to MJ Freeway’s Leaf Data Systems on July 2nd. Hoffman claimed that problems with the July 2019 release targeted by the policy had “aged out or been corrected.” As “the conditions it was designed to address are no longer present,” Hoffman reasoned that the policy served no purpose as the “very narrow” conditions it was based on, “lab test data and manifest information,” had “been resolved.” Board members had no questions.
    • On July 8th, OpenTHC CEO David Busby provided public comment to the Board criticizing the rescission, calling the move “premature.”
    • Later on July 16th, WSLCB staff announced a revised schedule for Integrator Work Sessions and noted, “As a general reminder, there are no longer updates being made to the Leaf system and its existing code will not be updated, even if additional issues are found.”
  • Authority to Suspend Licenses to Enforce Governor's Proclamations (audio - 1m). Adopted by the Board on April 6th, Hoffman said she’d be asking for an extension of the emergency rule on “summary suspension and stay provisions to enforce the Governor’s proclamations” at the July 22nd Board Meeting as the emergency rule “ages out on August 4th.”
  • Prohibition - Vitamin E Acetate (audio - 1m). Hoffman said the Washington State Board of Health (SBOH) was preparing a CR-102 with a proposed permanent ban on vitamin E acetate "in the not so distant future." She indicated that WSLCB’s own emergency rules, last renewed on May 27th, would be in effect until "towards the end of September." Hoffman said that as her team implemented HB 2826, which also included the prohibition, she would "continue to monitor" SBOH’s work.
  • Quality Control (QC) Testing and Product Requirements (WSR 20-03-176, audio - 1m). Policy and Rules Coordinator Casey Schaufler reported that the agency was still organizing and assessing feedback received during the CR-102’s public hearing on July 8th.
  • Cannabis Retail Title Certificates (audio - <1m). Schaufler indicated that the Washington State Office of the Code Reviser (OCR) had withdrawn the rulemaking project following a vote by the Board on July 8th.
  • HB 2826 Implementation (WSR 20-15-041, audio - 1m). Schaufler said the CR-101 was “moving,” and the agency was receiving comments as they started to codify legislation extending the Board’s authority over cannabis products and ingredients into rule.