WSLCB - Board Meeting
(October 3, 2018)

Here are some observations from the Wednesday October 3rd, 2018 Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Progress had been inconsistent on the legislation and rulemaking project to implement importation and traceability of imported cannabidiol (CBD) as additives in legal cannabis products.
  • The enacting legislation, HB 2334, was signed into law on March 21st after a traversal through the Washington State Legislature (WA Legislature) which alternated between sluggish and supercharged.
  • WSLCB staff made an effort to be proactive on rulemaking, seeking the board’s approval to begin on April 4th, months before the newly signed law took effect. However, the CR-102 wasn’t presented and approved until August 22nd, when Policy and Rules Coordinator Joanna Eide outlined the effects of the proposed rule language:
    • Sampling and testing requirements borrowed “heavily” from the Washington State Department of Health (DOH) compliant medical product testing rules, Eide said.
    • Rules were developed “similarly to how we have our extracts and concentrates created within the regulated system,” with residual solvent screenings “applied to these products similar to how we have” standards for cannabis product testing. “The only thing that is not included,” she noted, was “foreign matter screening...because most of these are finished products.” Retesting and remediation, pending technological feasibility, would be permitted.
    • On traceability, “a CBD oil, that is manufactured from hemp, it looks an awful lot like cannabis oil, generated from marijuana” and would need to be added to Leaf Data Systems by staff at vendor MJ Freeway. Eide explained that imported CBD extracts “had to have that open door so that they could also be transferred to the labs, the certified labs to be tested.” 
    • There would also be a provision “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.” A violation risked possible revocation of the license of a producer/processor “or certification of the certified lab.”

• Karen McCall, a former Senior Policy and Rules Coordinator at the agency, had temporarily taken on cannabis rulemaking duties and briefed on the proposed rule language at the public hearing (audio - 3m, video).
  • Policy and Rules leadership at WSLCB changed hands between adoption of the CR-102 and the hearing. McCall, who had retired in June, returned to take over responsibility for cannabis rulemaking as Eide left the agency in late August 2018, prior to the completion of several projects.
  • McCall told the board the implementation of HB 2334 tasked WSLCB with development of “testing requirements for CBD additives generated outside of the regulated marijuana industry if a marijuana licensee wants to use those additives in creating marijuana-derived products.” She said that a proposed WAC 314-55-109 would cover “Cannabinoid additives - Requirements, restrictions, and quality assurance testing.”
  • “A few comments” had been offered on the rulemaking effort, and McCall said she was “going through comments that Joanna had received.” She reviewed the proposed changes for sampling and testing requirements, highlighting the concern “about pesticides being present in these largely unregulated products,” residual solvents, and other impurities. McCall added that “if the CBD product is obtained from a source not licensed under our chapter” and fails “quality assurance testing, it may not be used as an additive in marijuana products and must be destroyed consistent with the requirements of [WAC] 314-55-097.”  
  • McCall was replaced by Policy and Rules Coordinator Kathy Hoffman in late October. Hoffman was promoted to Policy and Rules Manager several months later.

• Commenters focused on the proposed imported CBD product testing standards, including a staffer from the Washington State Department of Agriculture (WSDA) who had been directly involved in the development of Washington’s pesticide testing regime.
  • Erik Johansen, a WSDA Registration and Licensing Services Policy Assistant, stated, “for the last six years I’ve been working on pesticides and cannabis” and he was concerned about one area of the draft rules. He called attention to subsection (4)(b)(ii) pertaining to pesticide screening and “the rules that are adopted by reference, in other words the pesticide action levels, and the list of unapproved pesticides to test for.” In Johansen’s assessment, “neither of those are currently adequate to protect human health. If the goal of this rule is to protect the health of cannabis users, including patients, from imported cannabinoids, you need to be aware that the rules, as they exist today, do not protect human health.” To accept these rules, he added, “really isn’t helping” (audio - 2m, video).
    • Johansen then mentioned “overproduction” of cannabis, saying he understood that had been a concern of agency leaders, “but if you have rules that were adequate to protect human health that might kick out some of the product that should not be in the system...that might help you to address the overproduction issue.”
    • Board Member Russ Hauge inquired whether Johansen was providing the official position of WSDA, “or is this your position?” Johansen replied that he was offering comments “as an employee of the Department of Agriculture. I developed the list of allowed pesticides. I developed the recommendations for the department of health...I’m doing this in my official capacity as an employee of the Department of Agriculture.”  He clarified his willingness to work with WSLCB or any agency staff on the “difficult issue” of pesticides “to get this resolved” (audio - 1m, video).
    • Johansen’s work on cannabis pesticide issues for WSDA included collaboration with WSLCB staff on pesticide policy. He created and shared a Comparison of pesticide action levels for marijuana spreadsheet in April 2018 and had previously attended cannabis enforcement checks, offered media comments on the subject, and was expressly thanked for contributing to the 2014 academic article, Cannabis, pesticides and conflicting laws: The dilemma for legalized States and implications for public health.
      • Review a partial history of the specification of pesticide action levels by WSLCB, WSDA, and DOH staff.
    • An October 2020 presentation on the WSDA pesticide registration program indicated that Johansen’s service with the department ended in November 2019. However, during a July 2020 public hearing on proposed rules for the cannabis Quality Control Testing and Product Requirements rulemaking project, Jim MacRae, Straight Line Analytics Owner, alleged that Johansen was “removed from pesticide responsibilities and cannabis responsibilities within a week of making testimony to this body.”
      • In August 2018, two months prior to this public hearing, Joanna Eide sought board approval of a CR-101 opening a new rulemaking project to address cannabis product testing standards. At publication time, that rulemaking project had been open for more than three years. A supplemental CR-102 was filed in September 2020 and the project was restarted again in 2021 as staff sought an economist to improve the small business economic impact statement. On August 31st, staff confirmed having hired economists from Industrial Economics, Incorporated (IEc) and issued a request for interviews with licensed producers and producer/processors.
    • After leaving WSDA, Johansen continued to offer comment or support on cannabis policymaking in the WA Legislature, including:
      • Adult home growing of cannabis in January 2019 and February 2020
      • A proposed cannabis commodities commission in February 2020
      • Signed in as supporting medical cannabis reforms in March 2021
    • Asked for comment on September 13th, 2021, Johansen stated that he stood by his original remarks "without any hesitation." Maintaining that "rules allow action levels for several pesticides (including daminozide, a probable human carcinogen) that would never be allowed under any circumstances on any other crop consumed by humans (e.g. apples, barley, hops, grapes)," he considered it "very apparent that the WSLCB should not be involved in regulating marijuana production, especially regulating pesticide action levels for cannabis." As to the impact Johansen's comments had on his employment status, "I never received a written explanation as to why I was removed from all public or interagency activities regarding cannabis, and was not asked to discuss or explain my testimony prior to being reassigned." Following the reassignment, he stated that he arranged retirement from WSDA "as soon as I could."
  • Steve Sarich spoke to heavy metals testing, remarking the state “may or may not have a single lab...that will be certified to do heavy metal testing.” He wondered if this gap would lead to CBD products being pulled from stores as they couldn’t meet one of the proposed requirements, “which means, again, patients lose” (audio - 2m, video).
    • Sarich claimed that CBD products in legal cannabis stores at that time only came from “CBD isolate products,” and pointed to the “entourage effect” among cannabinoids and other plant compounds to establish that increased CBD content in products “will do nothing for patients.” Sarich said isolates “by definition” were “99 point something percent pure to begin with” and that the odds of heavy metals being present were “fairly slim.” If there weren’t labs certified to conduct heavy metals testing, “please don’t require heavy metals testing,” he summarized  
    • In January 2019, Molecular Labs, the only certified lab in Washington state able to test cannabis for heavy metals at that time, discontinued their WSLCB certification. The WSLCB board subsequently adopted board interim policy (BIP) 11-2019 which temporarily waived that requirement. Weeks later in April 2019, Hoffman reported that Trace Analytics and Medicine Creek Analytics remained “in line to be accredited” for heavy metals testing. At publication time, Medicine Creek still offered this testing service, along with Pacific Botanical Laboratory and Confidence Analytics.
    • Sarich testified against passage of HB 2334 on January 8th. He offered remarks on medical cannabis during WSLCB public comment periods on May 2nd and August 8th. He also spoke before the Washington State Joint Legislative Audit and Review Committee (JLARC) in 2018 as well as the Washington State Pharmacy Quality Assurance Commission (WA Pharmacy Commission) in April 2021.
  • Orion Inskip, an attorney with Gleam Law, argued that “part of the problem with the CBD importation is that the current industrial hemp pilot program...legislatively prohibits the processing of any part of the plant that would contain CBD.” Acknowledging that the board wasn’t empowered to change WSDA policy, he suggested it was “critical” to be able to use domestically produced hemp for CBD extraction in addition to the “potential issue of processing imported hemp.” Inskip said raw hemp material might have to be processed outside of the state and that this should be addressed prior to talking “about bringing CBD in from outside of the regulated market” (audio - 1m, video). 
    • Inskip brought forward a petition in July 2018 regarding true parties of interest which the board accepted, addressing the issues raised in the petition with other rulemaking changes adopted in September 2020.
    • Inskip left Gleam Law and the cannabis sector in April 2019.
    • The pilot program for hemp at WSDA was replaced in 2020 with an expanded program. In April 2021, SB 5372 (“Concerning hemp processor registration and a hemp extract certification”) was signed into law, and a rulemaking project was opened by WSDA officials on July 20th.