WSLCB - Engagement - BIPOC
(October 12, 2020)

Monday October 12, 2020 1:00 PM - 4:00 PM Observed

Board members and staff of the Washington State Liquor and Cannabis Board (WSLCB) participate in external engagements in their official capacities.

Prompted by the passage of HB 2870 in the spring of 2020, the Washington State Liquor and Cannabis Board (WSLCB) committed to scheduling a series of engagements with "communities of color." Cannabis Observer opted to use the terminology "black, indigenous, and people of color" (BIPOC) rather than "communities of color" in recognition of the likelihood that perceptions about the WSLCB may not be shared within racial and/or ethnic groups, and the so-called war on drugs disproportionately impacted African American communities in Washington and across the United States.

Observations

Participants secured the WSLCB’s commitment to refund withdrawn application licensing fees in a prelude to the first meeting of the Task Force on Social Equity in Cannabis.

Here are some observations from the Tuesday October 12th Washington State Liquor and Cannabis Board (WSLCB) engagement with black, indigenous, and people of color (BIPOC) communities.

My top 3 takeaways:

  • The third agency engagement with communities of color started off with updates from staff and details about how cannabis criminalization had personally impacted one social equity task force member.
    • This was the final event of three scheduled BIPOC engagements intended to gather input around social equity in the cannabis industry as well as the WSLCB’s own diversity, equity, and inclusion (DEI) practices. Prior events were hosted on September 29th and October 5th.
    • Prompted by the passage of HB 2870 which was signed into law on March 31st, WSLCB committed to scheduling a series of engagements with "communities of color." The agency coordinated with the Washington State Commission on African American Affairs (CAAA) and contracted Caprice Hollins of Cultures Connecting to assist in facilitating the events, originally envisioned as in-person gatherings.
    • WSLCB leadership present for the virtual event included:
      • Board Member Ollie Garrett
      • Director Rick Garza
      • Deputy Director Megan Duffy
      • Enforcement and Education Chief Justin Nordhorn
      • Director of Licensing Becky Smith
      • Director of Communications Brian Smith
      • Director of Legislative Relations Chris Thompson
    • The agency’s BIPOC engagements have been separate from, though complementary to, the Washington State Legislative Task Force on Social Equity in Cannabis. WSLCB was expected to help inform the task force’s work of defining application criteria for 34 available retail licenses.
    • Garrett’s comments were similar to those during the September 29th and October 5th sessions. She discussed her experiences as an African American business woman coming into a leadership role at WSLCB. Garrett had heard from medical dispensary owners and license applicants who believed they were “in line for a retail license” when the medical and recreational systems merged via SB 5052 in 2015. She acknowledged that while “the system was not perfect” WSLCB was committed to an equitable industry and that it was “important that all LCB staff hear the message conveyed today” (audio - 7m).
    • Garza’s remarks were similar to those he’d made during prior BIPOC sessions, agreeing with sentiments that he and the Board “failed to recognize an unequal playing field” around cannabis licensing and that “some communities would be left out if an emphasis to reach them was not provided.” He touched on the diversity at WSLCB, his own family’s role in the state’s hispanic community, and his long service in state government (audio - 6m).
    • Other division heads provided updates similar to their briefings at the earlier events.
      • Nordhorn talked about enforcement reforms (audio - 4m).
      • Becky Smith spoke to the availability of retail licenses (audio - 8m).
      • Thompson laid out the particulars of HB 2870 and the law’s task force (audio - 6m).
    • Paula Sardinas, CAAA Commissioner and delegate to the social equity task force, was introduced to talk about her work with minority businesses and her cannabis policy experience, building on her comments in earlier sessions. She explained that she’d “been working on policy for about 25 years and...a lot of the area’s been cannabis.” Sardinas also elaborated on the personal toll cannabis policing had on her family, sharing that “my brother and about 12 of his friends were arrested for trafficking in cannabis” in 1994, receiving sentences “ranging from 25 years to 118 years.” Before her brother was released in June 2019, Sardinas had become aware of “a sentencing disparity between white folks who trafficked in cocaine and black people who trafficked in cannabis.” She advocated for looking “at all of the licenses across all of the verticals” and stated that the task force’s work would be to articulate “what is it the community wants in social equity and how can we move the community forward” (audio - 7m).
  • Comments and questions were heard from voices new and familiar about refunds for applications, whether prior cannabis expertise or licensing might benefit prospective applicants, and lingering accusations that discrimination at WSLCB hadn’t been addressed.
    • The session engagement peaked at 67 participants.
    • Bailey Hirschburg, Washington NORML (notes, audio - 5m).
    • Adrian Washington, Former license applicant (audio - 5m).
    • Jedidiah Haney (audio - 2m
    • Mike Asai, Emerald City Collective Garden (ECCG) Founder (audio - 15m). Asai explained he founded the ECCG dispensary in 2010 as “a non-profit with the Secretary of State, Washington State, and the City of Seattle” which “paid all state and local taxes from 2010 to 2016” and supported patients “in a safe environment” in the city’s downtown area. While ECCG had been in a legal “gray area...we figured at some point paying taxes now would help us in the future,” he said.
      • Asai called attention to documents from WSLCB, one stating that license allotment had not been set and another saying “there is no rush to apply.” He found both documents “completely misleading” and done to “throw off collectives not to apply right away.” He pointedly asked Garza “who approved this to be posted on the LCB websites?”
        • The WSLCB licensing forms Asai referenced, 5659 and 5916, have since been updated and do not include the referenced language.
      • Asai said ECCG was targeted for late taxes before they knew that dispensaries were “exempt from paying taxes July 1st, 2015 til June 30th, 2016, according to SB 5052” even though officials from the state “knew we were tax exempt.”
      • Asai said WSLCB Customer Service and Support Manager Beth Lehman promised a refund of ECCG’s application fee in 2016 should it be withdrawn. While the agency automatically withdrew Asai’s application in 2017, “to this date, I have not received a refund, I have gotten the run around from [WSLCB Marijuana Licensing Supervisor] Frank O’Dell and Beth Lehman.” He took the issue to Becky Smith “this past Thursday” and found his refund request “would be granted.” He called on the agency to “refund all priority 2 and all priority 3 applicants as they stated they would.” Asai wanted Smith to speak to why refunds would be offered for withdrawals from applicants but not provided when the agency itself withdrew applications. He said the process left him feeling “disrespected and embarrassed.”
      • Asai believed tax-paying dispensaries like ECCG “should have been grandfathered in” during the merging of medical and recreational markets “without having to go through more red tape.” He added that watching other retailers succeed in the 502 market was “a slap in the face to us pioneers,” as he’d had family members incarcerated due to cannabis criminalization.
      • Garrett asked Becky Smith to elaborate on license applicant refunds. Smith reported that WSLCB had refunded “a majority of the folks who applied for...requested a refund” years after the application withdrawals. However, automatic refunding wasn’t done “because we don’t know that the check that we’re sending the, you know, the address that they use are their current address right now.” She said Asai’s address was updated allowing his refund to be sent when he asked. Smith didn’t know about his past treatment, and was trying to “correct what’s happened now.” Asai said he’d prefer better treatment during any equity licensing process, but that WSLCB needed to “stop the lies, and stop the misleading the people, and the bullying” (audio - 4m).
      • Thompson commented that WSLCB lacked authority to “revise the eligibility criteria and requirements in the social equity program.” He added that the social equity task force did have the ability “to make recommendations to the legislature and the governor in the future” (audio - 1m).
    • Henry Sanchez (audio - 2m).
    • Sheley Anderson, Craft Cannabis Coalition (CCC) Policy Advisor (audio - 3m). Anderson asked “once we are successful at bringing black and brown applicants into retail, how do we make certain LCB, in its regulation, does not apply a racial lens that will hurt black and brown retail?” She wanted to know what rules and practices the agency had or was putting in place to address bias.
      • Garrett asked Nordhorn and Garza to elaborate on the agency’s enforcement reform. She claimed bias was sometimes identified and remedied during the Board’s review of litigation on violations (audio - 2m).
      • Nordhorn provided an enforcement review similar to one provided to staff on September 16th. But he also expounded on areas of “social justice” in the recommendations from the independent review of WSLCB’s enforcement practices by consulting firm Hillard Heintze (H&H) in December 2019 (audio - 7m).
        • Nordhorn reported that the Enforcement and Education division had changed their violation complaint process to emphasize “specific in nature” complaints and minimized any investigations “generic in nature.”
        • He claimed that uniform changes would make Enforcement officers more “approachable” so that licensees were comfortable asking questions and for help. Additionally, Enforcement staff would have more training on implicit bias and be required to provide more detail when reporting their time and activities during visits to licensees.
        • Nordhorn added WSLCB’s process for “internal affairs complaint policies” after H&H’s report found people were “fearful of reaching out to us.” He said the new complaint feature was available online.
      • Garza asked that Anderson reach out to him so he could provide more documentation on the recommendations and how WSLCB was implementing them. He acknowledged the agency’s “really strict” processes, attributing them to the conflict between I-502 and federal law. Another change was that “half of the cannabis enforcement unit will be non-commissioned staff that will not carry firearms.” Garza argued this was a “fundamental change” in WSLCB’s enforcement culture. Officers would continue a focus on “education and outreach” (audio - 4m).
    • Garrett asked a question about WSLCB’s retail allotment authority granted in 2015 (audio - 2m).
    • Paul Brice (audio - 14m).
      • Check out Brice’s comments during the first and second BIPOC sessions.
    • “MJ Shelton” asked a question about grandfathering in dispensaries. Becky Smith contrasted SB 5052, which included a number of criteria for license applicants, with laws in California where dispensaries “turned over and became retail recreational stores.” She claimed the increase in retail allotments were based on research estimating medical cannabis canopy and consumption completed for WSLCB by experts at the University of Washington (UW) School of Law’s Cannabis Law and Policy Project (CLPP). She asserted the agency followed applicable laws “to a T” (audio - 3m).
    • Malcolm Ricks, SAFE Transportation President (audio - 1m). Ricks inquired whether the technical assistance grants in HB 2870 would be available for applicants for a marijuana transporter license. He also asked if having a transport license would move his business “closer, or to the head of the list, of opening a retail location?” (audio - <1m)
      • Thompson commented that the $1.1 million grant program funded annually from the state’s Dedicated Marijuana Account would be run by the Washington State Department of Commerce, not WSLCB. He understood the grant program would be limited to “new retail store licensees” which were part of the social equity program and not other license types like transportation (audio - 2m).
      • For Ricks’ second question, Thompson wasn’t aware of anything “currently established that would...move the program along those lines.” HB 2870 required a focus on a prospective retailer's social equity plans and qualifications, not whether they were already license holders. Nonetheless, “nothing really in the way of details has yet been decided or spelled out.” Changes would be “led by the task force” and “the final authority will rest with the Department of Commerce” (audio - 1m).
      • Garrett suggested that Ricks’ questions touched on whether “someone who already has a retail license would get higher priority over others?” She believed this applied “to any aspect of what we’re doing” but asked whether “anyone else can address that?” (audio - 1m)
        • Thompson said “someone who already holds a retail license” could still qualify as an equity applicant “but it doesn’t give them any priority or any advantage” (audio - 1m).
    • Joy Hollingsworth, Hollingsworth Cannabis and Hemp Company Co-Owner (audio - 10m). Hollingsworth expanded on her previous comments, saying the agency should learn from H&H’s report and focus on compliance over militarized enforcement by having some staff “dedicated strictly to education enforcement.” 
      • Hollingsworth told agency staff that WSLCB’s diversity, equity, and inclusion (DEI) work had “areas for improvement” and advised the creation of a director-level employee at WSLCB responsible for DEI policies paid for “by the LCB budget.” She pointed out that the State currently collected more taxes from cannabis sales than alcohol, a fact confirmed by the Washington State Treasurer, and expressed optimism that the State would invest some of the money “in diversity, equity, and inclusion, as it continues to expand.”
      • Hollingsworth encouraged WSLCB to publish information on vacation of cannabis convictions available through SB 5065, legislation passed in 2019. She repeated a call for technical assistance grants to be opened up to ancillary cannabis businesses.
      • She also compared WSLCB’s website unfavorably with Massachusetts Cannabis Control Commission and the city of Los Angeles’ Department of Cannabis Regulation websites, saying the agency’s internet portal “might be functional, but it’s not user friendly.”
      • Lastly, she asked that the task force or local jurisdiction actions around social equity not absolve WSLCB of the need for “accountability for the system that was set in place.”
      • Hollingsworth also testified in HB 2870’s senate hearing.
    • Elise (audio - 7m).
    • J'Andre Ivory (audio - 9m).
    • Peter Manning (audio - 7m).
    • Aaron Barfield, Black Excellence in Cannabis (BEC, audio - 7m).
    • Sami Saad, former dispensary owner (audio - 5m).
      • Saad had been a vocal critic of the WSLCB and the regulated marketplace, first speaking at the February 22nd Cannabis Equity in Our Community forum hosted by the City of Seattle. He also testified at HB 2870’s senate hearing. He alleged that WSLCB staff engaged in a bribery scheme during public comments at the agency’s June 24th Board Meeting.
      • Saad also commented during the first and second BIPOC sessions.
    • Asai followed up on his initial questions to Garza and mentioned the difficulty he’d had securing unemployment benefits (audio - 2m). He then brought up the documents telling applicants “there is no rush to apply” and that “there will not be an initial cap on the number of licenses issued” (audio - 2m).
      • Garza recognized Asai’s request for “collectives that were there before the integration with adult use should have the first right to licenses” and agreed that “over two thousand” collectives vied for 222 licenses under SB 5052. He didn’t have a process to prioritize former dispensaries, noting it was “probably part of the work of the task force” (audio - 3m). 
      • Becky Smith said she’d heard this complaint “a lot” but that the application window opened before any allotment changes. She asserted there was not an agency-led effort to rush applicants, and claimed the rush for WSLCB to accept applications was driven by applicants themselves. “We knew there were more dispensaries than we allotted for,” Smith stated, as the agency “never intended to license every dispensary that currently had a business” in 2015. Smith proposed that some applicants who had become familiar with the process after seeking a license in the state’s initial window had an edge over dispensary owners who were unfamiliar with WSLCB’s requirements and expectations (audio - 2m).
      • Asai reiterated his earlier points about injustice in the agency’s licensing and outreach (audio - 3m).
    • Charlotte Brathwaite (audio - 2m). Brathwaite asked about “current licensing holders and the efforts they make to lobby against what you’re trying to get done.” She wondered whether WSLCB was appreciative of “how difficult this market is” and would be doing anything to help equity licensees succeed long term.
      • Garza responded that “of course we’re aware” some in the current industry lobbied against expanded licensing, but “there are many that aren’t.” He believed there would always be dissent over changing “a marketplace that right now is set.” Garza noted that HB 2870 “got no Republican votes in the House or Senate, that’s very unique” and claimed partisan polarization made the social equity program more divisive. While some in the cannabis industry were “supportive,” he admitted that “there are those that the only thing they care about is their own greed and their own business interests” (audio - 2m).
  • The meeting closed out with a short discussion about next steps for WSLCB pertaining to social equity, and the new task force’s first meeting.
    • Garrett thanked participants, expressing gratitude that agency staff could hear from people “first hand” such that calls for change were “not just coming from me.” Even without racially-based discrimination, she acknowledged “the system was flawed.” She hoped that HB 2870 could bring more equity to the cannabis sector and foster engagement with applicants and agency staff before and during the application process. Garrett was also optimistic that deliberations would help WSLCB avoid “making the same mistakes.” She urged anyone interested to join the task force’s email distribution list (audio - 7m).
    • Hollins closed out the session by indicating participants could save and study the session’s chat log (audio - 3m).
    • The first meeting of the Washington State Legislative Task Force on Social Equity in Cannabis was scheduled for Monday October 26th and would be livestreamed on TVW.
      • The agenda released on October 16th indicated the event would include a variety of introductions and briefings, public comments, and possible action on the following topics:
        • Election of Task Force Co-Chairs
        • Task Force Bylaws
        • Task Force Operating Principles

Information Set