WSLCB - Board Caucus
(December 13, 2022)

Here are some observations from the Tuesday December 13th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 2 takeaways:

• Agency leadership offered their initial thoughts on a Cannabis Regulators Association (CANNRA) meeting the prior week in Tampa, highlighting educational, data, and networking opportunities from the event.
  • Director Rick Garza, Board Member Jim Vollendroff and Policy and Rules Manager Kathy Hoffman offered their initial impressions on December 6th while attending the conference. 
  • Board Chair David Postman began the discussion, identifying Garza and board members Ollie Garrett and Jim Vollendroff as being among the agency’s contingent at the Florida event. He hoped to hear “each of your takeaways” and “what you learned” (audio - <1m, WSLCB video, TVW video).
  • Offered the opportunity to respond as the “principal of CANNRA,” Garza’s initial response was to schedule the topic for a fuller debrief at the next Executive Management Team (EMT) meeting on January 11th, 2023 “because I didn't give people much time” and “it was a really full two days worth of information.” Garza then provided his impressions of the conference (audio - 4m, WSLCB video, TVW video):
    • The first panel included Justin Nordhorn, Director of Policy and External Affairs, “on structural factors and markets” which Garza said had been “looking at the way that different states put their markets together.” Contrasting legal cannabis markets was interesting, given some were “vertically integrated, some not, some with caps, some not,” and he was appreciative of how “Justin spoke to our experience.”
    • A “cannabinoid hemp update from the states” featured Policy and Rules Manager Kathy Hoffman, which Garza felt revealed many member states “are struggling with what to do” on the matter. “It all comes back to the Farm Bill,” he said, naming federal agricultural and food legislation enacted everyfive years since 1933with titles coveringlegal and regulatory topics. Garza reported that several attendees voiced a belief that CANNRA should “be involved in working with the Congress on that farm bill that's going to be reauthorized, and see if we can help have any impact in changing and clarifying the [2018 Farm bill, which had a] hemp provision that created all the problems that we have today.” As states continued to “all [do] it a little bit differently,” he was among those in CANNRA ready to “redo…that hemp provision.”
      • The hemp provision was supported by Kentucky Senator Mitch McConnell, who backed it in part due to that state’s history of hemp agriculture.
    • Garza noted that a counsel for WSLCB, Assistant Attorney General Penny Allen, “was on a panel [that] talked about litigation and case law updates” from several states.
      • At publication time, Allen remained assigned to the Brinkmeyer v. WSLCB case on out of state ownership of cannabis licenses proceeding in the United States District Court for the Western District of Washington.
    • Enforcement and Education Captain Joshua Bolender participated in a discussion on “violations and sanctions” in response to license infractions, explained Garza, as well as another on “best practices for field surveys and inspections compliance.” He noted the latter showed that “many of the things that we've been doing for years on the alcohol space…we're now doing in the cannabis space,” while mentioning the panel was moderated by Oregon Liquor and Cannabis Commission (OLCC) Director of Compliance Jason Hanson, the CANNRA compliance committee co-chair.
      • Bolender and Nordhorn were among representatives of the agency to present to members of the Washington State House Commerce and Gaming Committee (WA House COG) on December 2nd, at the conclusion of which Chair Shelley Kloba noted her appreciation of the agency’s involvement in CANNRA.
  • Garrett acknowledged she’d “missed the entire first day because I was traveling,” and would also benefit from an EMT presentation, though she’d heard “a lot of things that had taken place on day one” from talking with other attendees. She recalled representing WSLCB at CANNRA’s precursor—informally called regulators roundtables—in Boston, that was “pretty much a U-shaped round the room type” of gathering “because it was based on the states that was already legal and some looking to get legal.” She felt it was “impressive to see how [CANNRA] has grown, and to listen to all of the states talk about the different way that they're doing things” (audio - 3m, WSLCB video, TVW video).
    • The second day of the conference, she’d attended a session on state packaging standards and was surprised by “how they evolve[d].” She’d found an increasingly common trend of regulators “having a chemist…on staff.” Garrett found it was a good environment to notice “why certain things are in place and the importance of those things.”
    • In confabbing with others, Garrett explained that she brought up social equity and “nobody has gotten it right or got it at all. I think even though we are late getting in with social equity we are still far ahead of the other states by having a program now that we are putting in place.” She relayed how she was planning “follow-up conversations with folks that want to hear more.” She mentioned that while physically at the conference she’d remotely attended the December 7thWashington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) meeting to represent the agency.
      • Learn more from the WA SECTF member briefing to WA House COG on December 2nd.
  • Vollendroff thought the concept of an EMT review by officials should be standard practice “anytime somebody goes to a national conference.” He appreciated how the event “reinforces some of the things we're already doing well, and we're teaching other states from our own experience” along with learning and developing relationships with their counterparts (audio - 2m, WSLCB video, TVW video).
    • Representatives from Illinois “talked about person-centered policy making, and it really is around social equity, and they invest 20% of their tax revenues back into the community, particularly communities that have been impacted by the war on drugs,” Vollendroff told the group. He’d wondered whether that aid could be “extended to other communities that also have also been impacted…by the war on drugs: recovery communities, youth, and young adults.”
      • According to the Civic Federation review of Illinois cannabis tax allocation, the law allocates“25% to the Criminal Justice Information Projects Fund for the Restore, Reinvest, and Renew Program to provide grants and assistance to communities harmed by discriminatory drug laws,” while also spending on treatment and prevention initiatives:
        • “2% to the Drug Treatment Fund for the Department of Human Services to develop a drug, tobacco and alcohol public education campaign and analyze the public health impacts of legalizing the recreational use of cannabis;
        • 8% to the Local Government Distributive Fund to fund crime prevention programs, training, and enforcement and prevention efforts related to the illegal cannabis market and driving under the influence of cannabis;
        • 20% to the Department of Human Services Community Services Fund to address substance abuse and prevention and mental health concerns”
    • Vollendroff participated in a “plenary on standards in lab testing and product safety that was extremely interesting,” covering the issue of appropriate staff for regulatory agencies to employ. Overall, he viewed the conference as an engaging opportunity for “learning what's happening around the country, but also sharing what we're doing here locally.”
    • After comments from Postman, Vollendroff added that he’d heard from some people at the event about a panel on “using data to inform regulations and from the conversations I had with people following that it sounded very interesting.” Specifically, utilizing data to better “evaluate whether programs and decisions that we're making are in fact achieving the outcome[s] that we intend.” He’d heard some agencies had “research sections” which he hoped to find out more about. Postman stated that he and Public Health Education Liaison Mary Segawa met “with public health and prevention folks yesterday and one of the things they said” regarding preventing youth cannabis access was that it “starts with good policy. It's not just an education program or signs,” he remarked, and was more of a “programmatic thing…they gave us good feedback of our…foundational policies on these things” (audio - 2m, WSLCB video, TVW video).

• Board Chair David Postman asked for more detail about CANNRA member conversations on cannabis market structures as well as impressions of the chances for federal cannabis reform.
  • Postman echoed the sentiments of attendees who valued “the ability to talk to other people who know what we're doing,” saying that it offered context for when “people are always pointing to the other states, ‘well, why don't you do what they do,’ or ‘everything's going great in this state’” (audio - 1m, WSLCB video, TVW video).
  • Postman wanted to know from Nordhorn whether there was an emerging consensus around “a market structure that people are evolving to” (audio - 3m, WSLCB video, TVW video).
    • Nordhorn felt the conversation had been “kind of a compare and contrast,” and claimed that New York regulators were making their system “very similar to our program.” The discussion explored how state systems reached their current form and he noted, “New York…is trying to mirror some of that. Illinois was on the panel. They do things a bit differently and I think a lot of the medical states are still doing things a little bit differently as well.”
    • Nordhorn conveyed that there had been numerous questions on looking ahead to “how’s this gonna be impacted on the federalization issue, what about medical cannabis.” He said there were concerns over agencies positioning “to help [their] current licensees…try to be successful once it opens up broader, or are we going to see” large companies “coming and do[ing] things.” 
    • Concluding that infrastructure and “standards” were the largest obstacles to smooth interstate cannabis markets, Nordhorn felt the topics were “something we need to look at.”
      • On Monday December 19th, Washington State Senator Ann Rivers pre-filed SB 5069, “Allowing interstate cannabis agreements,” the first introduction of an interstate commerce trigger bill in Washington State history.
  • Postman also wanted to know attitudes on federal cannabis reform, but no one who attended got the impression changes were “imminent.” Garza commented that “people were so frustrated that the…[SAFE] Banking Act didn't move that people thought ‘my goodness, if we can't even get that to move then how will we get the Congress to really take seriously legalization?’” Mostly, the dialogue was on “state by state” solutions to issues like hemp cannabinoid products, which he said was leading CANNRA members to focus on the 2023 Farm Bill, but “there wasn't a whole lot of discussion because I don't think people are really encouraged it's something's gonna happen, like, soon” (audio - 1m, WSLCB video, TVW video).
    • Washington State officials had been backing the SAFE Banking Act more vigorously in 2022 in part to address a pattern of cannabis retail robberies.
    • Senator McConnell, aside from his historical advocacy for hemp in the Farm bill, continued to oppose other cannabis reform bills as Minority Leader for the U.S. Senate Republican Caucus.
  • “CANNRA probably wouldn't be what it is without what Rick and a few other pioneers did, so it looks like it's really paying off,” Postman concluded, promising they would hear more detailed updates from the conference during the January 2023 EMT (audio - <1m, WSLCB video, TVW video).