WSLCB - Board Meeting
(August 22, 2018)

Wednesday August 22, 2018 10:00 AM - 12:00 PM Observed
WSLCB Enforcement Logo

The Washington State Liquor and Cannabis Board (WSLCB) convenes a meeting of the three-member Board every two weeks to consider formal rulemaking actions and hear public testimony.

CR-102

Engagement Options

In-Person

3000 Pacific Ave SE, Olympia, WA 98501, USA

Observations

Two CR-102's were approved with draft rule changes to implement 2017 and 2018 cannabis legislation.

Here are some observations from the Wednesday August 22nd Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

  • The Board approved the supplemental CR 102 for 2017 Cannabis Legislation Rules (transcript, audio).
    • “Lozenge” was defined to be consistent with what products “can be packaged loosely in a consistently, child-resistant, resealable container.”
    • Licensees were added to “the list of people that must be 21 plus to work in a licensed establishment.”
    • “… the initial proposed language on volume discounts that was in the original CR 102” has been removed based on comments received.
    • Changes were made “to further clarify true party of interest and financiers and differentiate the two terms.” These changes were significantly modelled after Oregon rules.
    • Changes were made to allow processing service arrangements for cash instead of requiring title transfer of product being serviced.
    • Language was clarified for medically endorsed retail stores to spell out that although minors are allowed into such stores with their designated providers, the designated providers must be the ones making the purchase.
    • Personal possession and transaction limit changes were made for vendor educational and internal quality control samples to allow for greater flexibility than “individuals who are either the licensee or the employee who had purchasing authority.” Sampling allowances for topicals were also added.
    • For ownership changes, all references to “qualifying persons” were changed to “true party of interest” or “owners.”
    • A new section on Receivership includes language that Receivers must maintain residency throughout the process; and clarifies that violations of this section may result in Receiver disqualification from the Receivership process.
    • The Quality Assurance testing section has been removed to be replaced by a new, separate Rulemaking process.
    • A new Transportation License section has been created to make the “adjustment for the fee change for all licenses.”
    • Restrictions against giveaways have been loosened to allow for on-premise sampling of topicals and edibles that are not infused with THC.
    • Written comments on this supplemental CR 102 will be received until the public hearing scheduled for October 3, 2018.
  • The Board approved the CR 102 for 2018 Cannabis Legislation Rules for testing and traceability requirements for “cannabinoid additives generated outside the regulated marijuana industry.”  (transcript, audio).
    • “The statute only allows for the finished [not raw] CBD products as defined under the statute and then defined … underneath the regulation to be received.”
    • It also establishes “security and traceability requirements for these CBD products, meaning how they shall be received, how they should be placed within traceability, and go forth through the system.”
    • Inclusion of pesticides and heavy metal screening is based upon Department of Health rule requirements.”
    • QA testing requirements include for residual solvents; microbes; and mycotoxins, but not foreign matter.
    • “If the CBD product fails quality assurance testing, it may not be used as an additive in marijuana products and must be destroyed consistent with the requirements in WAC 314-55-097 … “there are provisions for retesting and remediation to provide exceptions to this requirement.”
    • Licensees and certified labs in violation of this statute may have their license or certification suspended or revoked.
    • Written comments on this CR 102 will be received until the public hearing scheduled for October 3, 2018.
  • Longtime WSLCB Policy and Rules Coordinator Joanna Eide announced her transfer to the Washington State Department of Natural Resources (transcript, audio).  Her last day will be August 31st.

Following a longer development process than expected, a CR-102 on CBD imports for use as cannabis product additives was presented to board members and gained their approval.

Here are some observations from the Wednesday August 22nd, 2018 Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

  • Four and a half months after initiating the rulemaking project to implement HB 2334, a law allowing importation of cannabidiol (CBD) as a cannabis product additive, the board heard about proposed changes.
    • HB 2334 (“Regulating the use of cannabinoid additives in marijuana products”) was signed into law on March 21st and took effect on July 1st as RCW 69.50.326, almost three months after the board approved a CR-101 on April 4th.
    • Two weeks prior, on August 8th, agency leadership discussed the rulemaking project at length during an executive management team (EMT) meeting (audio - 12m, transcript):
      • Policy and Rules Coordinator Joanna Eide described “testing standards for the cannabinoid additives” that included “requirements, restrictions, and quality assurance (QA) testing.” Staff found that since the product was “not generated from within the regulated system,” it needed a “brand new section” in rule and separate requirements, in addition to “traceability requirements and security requirements.”
      • Eide said proposed sampling and testing requirements borrowed “heavily” from the Washington State Department of Health (DOH) compliant medical product testing rules, including requirements to test for pesticides, heavy metals, residual solvents, and microbials. She reported that DOH and WSLCB Enforcement Division staff had conducted testing on some existing, unregulated additives and found that “there are many products that will test hot at pretty alarming levels for pesticides” as well as heavy metals. Noting that CBD extracts were often “created similarly to how we have our extracts and concentrates created within the regulated system,” it was possible that “residual solvent screening be applied to these products similar to how we have” standards for cannabis product testing, she explained. Eide remarked that “the only thing that is not included here that...is required on cannabis and is not proposed to be required for CBD products, is foreign matter screening, because you don't want to be looking for sticks and seeds and stuff, because that doesn’t really make a lot of sense, because most of these are finished products.” She added that retesting and remediation, pending technological feasibility, would be allowed.
      • Regarding traceability, Eide said that “a CBD oil, that is manufactured from hemp, it looks an awful lot like cannabis oil, generated from marijuana. So once you have those items on the premises, they need to be able to be placed within traceability,” a service provided by Leaf Data Systems from MJ Freeway. She continued, “They do need to be entered into the traceability system once they are received. They had to have that open door so that they could also be transferred to the labs, the certified labs to be tested.” Later, Eide extended thanks to WSLCB Information Technology (IT) staff because there were “a lot of questions with how that would work, because you're getting products that are coming in midstream, which you normally don't have in the traceability system, you know, seed-to-sale is usually what we got. So now all of the sudden we've got, you know, magic product coming in midstream. How are we going to make that work?”
      • Eide concluded by noting a provision “at the end stating that the LCB will take immediate...disciplinary action against any licensee or certified lab that fails to comply with the provisions of this section, or falsifies records related to this section,” including revocation of the license of a producer/processor “or certification of the certified lab.”
      • Board Member Russ Hauge advised that the QA testing rules allow disciplinary action based on prima facie evidence, “rather than have to wait for due process” while products continue to be sold.
  • Policy and Rules Coordinator Joanna Eide presented a CR-102 to board members with proposed rule changes for CBD testing and traceability (audio - 7m, transcript).
    • Eide presented a “request approval to file a CR-102 for” implementation of HB 2334, which “requires that the LCB develop testing requirements for cannabinoid additives generated outside the regulated marijuana industry, if a marijuana licensee wishes to use those additives in creating marijuana derived products. And only those cannabinoid additives that pass the testing requirements...will be able to be used by licensees in the production of cannabis products.”
    • She stated that the process used by staff “drew upon testing requirements for these products that are already established in” DOH rules. The “inclusion of pesticides and heavy metal screening is based upon Department of Health rule requirements,” Eide commented, as “high levels of pesticides and heavy metals...have been detected in tests of CBD products, because these products are largely unregulated at this time,” and rules for extract production in other states varied. The intent of the law and rules, she indicated, was to allow imported CBD “as an additive for the purpose of enhancing the CBD concentration of any product authorized for production, processing, and sale.”
    • A new rule section would be established within WAC 246-70, Eide stated, to address “CBD product additives from start to finish. How it shall be received, security requirements for those, traceability requirements for those, and testing requirements for those.” She said the proposed language “establishes sample deduction and quality assurance testing requirements similar” to DOH standards for compliant products. Testing requirements included:
      • Potency screening “to confirm the product is less than .3% THC and contains CBD”
      • Pesticide screening “consistent with pesticide action levels provided in WAC 314-55-108
      • Heavy metals screening “due to concerns about heavy metals being present in these products as well, and consistent with the levels that we have established in our quality assurance rules
      • Residual solvent screening as “finished CBD oils or extracts have been extracted using various solvents, so this is also consistent with the requirements for marijuana products”
      • Microbiological and mycotoxin screening “consistent with similar requirements for marijuana and marijuana products”
    • Eide told the board that “statute only allows for the finished CBD products as defined under the statute and” in the event that “CBD product fails quality assurance testing, it may not be used as an additive in marijuana products and must be destroyed consistent with the requirements in WAC 314-55-097.” She then mentioned the ability to take action against parties falsifying lab results.
    • The board voted to approve the CR-102 without questions.
  • Following board member consent to file the CR-102, Eide provided a timeline for the rest of the project before saying her public farewell as she prepared to leave her position at the agency (audio - 1m, transcript).
    • Eide expected the CR-102 would receive a public hearing “on October 3rd” commensurate with the “end of written comment period.” Provided there were no changes, she would then “bring it back to the Board for approval on October 17th or the 31st, depending upon the level of comments received and how long it takes to pull together the concise explanatory statement.”
    • Board Member Ollie Garrett acknowledged that this would be Eide’s final board meeting as a Policy and Rules Coordinator for WSLCB, thanking her and stating that the board “really appreciates your service here.” Eide responded that she’d “just be over at the [Washington State Department of] Natural Resources building...I will miss everybody here terribly. It’s been such a fantastic experience. So thank you all so very much.”
      • Karen McCall, a former Senior Policy and Rules Coordinator at the agency, had retired in June but returned temporarily to take responsibility for cannabis rulemaking before Kathy Hoffman was hired to replace her in late October.

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