WSLCB - Board Caucus
(May 15, 2018)

Here are some observations from the May 15th WSLCB Board Caucus meeting.

My top 3 takeaways:

• A request for rulemaking on private or white label cannabis products was denied by the Board (transcript, audio).
  • Former WSLCB Board Member and Regulatory Consultant Chris Marr requested rulemaking regarding white label or private label cannabis products.
  • WSLCB Policy and Rules Coordinator Janette Benham provided a succinct definition of the proposal: “Private labeling or white labeling, is the practice of a producer and a processor creating products specifically for a retailer, and having the retailer’s business or trade name or brand appear on the label for the product.”
  • Ms. Benham expressed concern about potential violation of tied house rules and creation of undue influence across license tiers: “The cannabis industry is too new and the risk is too high to create exceptions at this point in time.”
• Jim Morgan, CFO of the WSLCB, discussed marijuana tax collection and enforcement options in the event of nonpayment of taxes (transcript, audio, handout).
  • WSLCB has utilized two approaches for collection of unpaid taxes:
    • WAC 314-55-525 violations involved Enforcement and adjudication allowing licensees to get significantly behind in tax payments before license suspension.
    • WAC 314-55-092 enables the WSLCB to issue warning letters regarding nonpayment and enact swifter license suspension by the Board. This process has resulted in one lost license with four more in review.
  • WSLCB’s “primary interest is getting paid” and will work with late & non-paying licensees to recover owed taxes.  To date, WSLCB has collected 99.7% of excise taxes – and nearly $3M has not been collected.
• Board Member Ollie Garrett reiterated her interest in leading WSLCB to develop an equity program for minority-owned and small businesses in the event of new license issuance (transcript, audio).