WSLCB - Executive Management Team
(July 14, 2021)

Here are some observations from the Wednesday July 14th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 3 takeaways:

• Director Rick Garza touched on approaching meetings with federal officials, the Washington Traffic Safety Commission (WTSC), and state legislators.
  • Garza told board members that representatives of the Cannabis Regulators Association (CANNRA) would be meeting with staff from the U.S. Food and Drug Administration (FDA) the following week. He observed that “many of the big federal agencies" had contacted WSLCB staff since the inauguration of President Joe Biden with the intention of learning “how we put our systems together” (audio - 1m, video)
    • On July 13th, the Biden Administration announced the nomination of Rahul Gupta as Director of the Office of National Drug Control Policy (ONDCP). Gupta previously served as Commissioner for the West Virginia Department of Health and Human Resources Bureau for Medical Services (BMS) and as a team lead for ONDCP during the Biden transition. Since his nomination, Gupta had already received encouragement from drug reform advocates and criticism of his time leading drug policy in West Virginia. If confirmed by the U.S. Senate, he would be responsible for implementing the Biden Administration’s Drug Policy Priorities for Year One that were announced on April 1st.
  • WTSC leaders had invited Garza to present on CANNRA after a staffer from the commission attended “a meeting that we had several weeks ago” at the invitation of Public Health Education Liaison Sara Cooley Broschart. He reported that the meeting with WTSC staff would focus on the CANNRA “traffic impairment committee” (audio - 1m, video).
    • Garza gave a presentation on CANNRA to WTSC Commissioners at their July 15th meeting.
  • Garza said agency staff had also been asked to meet with Washington State House Commerce and Gaming Committee (WA House COG) Chair Shelley Kloba and Vice Chair Emily Wicks the following week to present an “overview of the cannabis regulatory system” as well as a briefing on “delta-8-[tetrahydrocannabinol]” (delta-8-THC). The policy committee leaders asked for “a refresher understanding of what our authority is, both regulatory and legal, around this issue.” Director of Policy Affairs and Outreach Justin Nordhorn was organizing the presentation as Director of Legislative Affairs Chris Thompson was on vacation (audio - 1m, video).
    • At publication time, there were no public meetings of WA House COG listed on the legislature’s website nor TVW during the following week.

• Board members talked around their position(s) on the practice of using synthesized cannabinoids within the regulated marketplace - and whether it mattered in relation to an ongoing investigation undertaken by Education and Enforcement division staff.
  • Hauge asked Garza about the presentation to WA House COG leadership and how staff would communicate the position and authority of the board around use of cannabinoids synthesized from imported hemp-derived cannabidiol (CBD) by licensed processors (audio - 5m, video).
    • Garza, with whom Hauge has had some terse exchanges on the topic, answered that the presentation had been scheduled for the following Wednesday and would cover “where we are, Russ, which is the advisory that was created and the work that the staff is doing.” He believed the practice of converting CBD into other cannabinoids and how WSLCB staff arrived at the position in the policy statement would be discussed.
    • Hauge wanted to know “what are we going to be telling them about our ability or intention to respond to delta-9 being introduced into our system?” Garza, noting there was “an active investigation occurring,” was interrupted by Hauge who said he was concerned with the agency policy on synthesized cannabinoids which he felt an investigation should be predicated upon. Hauge was curious if Garza or his fellow board members supported “accommodation” of synthesized cannabinoids, a “policy of interdiction” of the products, or “something in the middle.”
      • Hauge had focused on synthesized delta-9-THC for multiple meetings, wanting the board to take action to halt the practice which representatives of licensees confirmed had been occurring in the legal cannabis sector. 
    • Postman voiced wariness about committing to only one course of action and confidence in staff presenting, believing they wouldn’t “say anything more to legislators than they’re able to say to us.” Garza agreed that staff would not make assurances to lawmakers beyond what agency officials had already undertaken, concluding they were “not compromising the investigation.”
    • Hauge believed WSLCB staff were not sufficiently able to articulate “what is the policy that we’re trying to follow here” as he’d heard a “range” of opinion on synthesized cannabinoids, noting some presented it as “a natural progression” of legal cannabis. He was further concerned “that we’re not making any progress” on the matter despite having presented the issue to the board multiple times. Postman took exception to Hauge’s characterization, saying “we are making progress...there is an investigation going on, there is legal review going on,” and “all the tools that this agency has” were being brought to bear. As soon as “staff has a clear position on what they think that policy should be, they will share it not just with you, but with everybody.”
    • Hauge asked if he, as a board member, had a role in setting WSLCB policy on synthesized cannabinoids, or if he was supposed to be a “consumer” of whatever position was presented by staff.
      • Following the advisory policy statement on delta-8-THC, agency staff sent out a clarifying bulletin on the subject on May 3rd.
  • Garrett summarized her view of the situation, concluding that “while there’s something active that could eventually come before the board, there’s certain things that can’t be or shouldn’t be discussed with us at this time.” Postman confirmed that he had a similar impression of the situation, feeling that although the board had a role in policy development, trying to create new regulations or expectations for licensees during an investigation wasn’t appropriate. Postman wasn’t aware of a time board members made a “policy call prior to an enforcement action.” Hauge stated “for the record” that he had no interest in active investigations by the agency Education and Enforcement division, but wanted to know in “approaching this issue, are we taking a position where we are looking to accommodate, or are we looking to interdict, or somewhere in between” (audio - 3m, video).
    • The adjudicative role of board members in proceedings on administrative violations means prior discussion between the members and staff on any case could lead to challenges to the validity of their judgments.
  • Postman wondered if Hauge recognized “answering that question today could, in fact, impact an on-going investigation?” (audio - 3m, video)
    • Hauge noted that he’d worked with many “pending investigations” as a county prosecutor prior to joining the board, and that he wasn’t concerned with specific actions of licensees so much as “how are we approaching it,” whether by further rulemaking or legislation, or acting on existing statutes and policies.
    • Postman felt those questions had been addressed “multiple times” and that staff were “not waiting for rulemaking” or the 2022 legislative session but were reviewing “various avenues” of WSLCB authority. Taking any more definitive stance on the matter could “tip our hand" in the active investigation, he argued, and agency staff were continuing to “protect our ability to act on this and not be conflicted out as sitting as the final judges.”
    • Garza was in agreement, telling Hauge his comments were “not trying to be flippant.” However, he added that, although “we can't discuss the particulars,” the undisclosed legal opinion they’d received from the Washington State Office of the Attorney General (WA OAG) had been “very helpful.”

• Social equity was discussed in the context of the newly funded Washington State Office of Equity, a new website for social equity retail applicants, programs in other jurisdictions, and federal cannabis reform legislation introduced that same day.
  • Postman brought up a survey from the Office of Equity that was distributed to WSLCB stakeholders later that day, asking if the board would be able to see “the raw data” from responses or see them once they’d been “synthesized.” Director of Communications Brian Smith replied that the synthesized information would be made available as only Office of Equity staff saw the original responses, which were intended to stay anonymous. He said Karen Johnson, the appointed Equity Director, would see raw data (audio - 1m, video).
    • Garza observed that the responses would be used by the office to create “a five year strategic plan” on diversity, equity, and inclusion (DEI). He added that agency staff had already been encouraged to take the survey, which would be sent out to WSLCB stakeholders as well (audio - 1m).
    • The Washington State Office of Minority and Women’s Business Enterprises (OMWBE) had been hosting a series of “Strategic Planning Listening Sessions” regarding the Washington State Office of Equity. A multilingual survey was made available to offer input and a final session would be conducted in Spanish on July 21st.
  • Director of Licensing and Regulation Becky Smith talked about planned updates to the agency website with “content to provide potential social equity applicants general licensing requirements and social equity information.” She said this had been an “ask” of the agency by members of the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) in addition to people contacting agency staff “regarding the application process; are there things they could be working on and doing” to prepare to apply. Smith said staff were preparing “great information” on “viable locations” based on “what the jurisdictions look like.” They planned to map out restricted areas for prospective applicants, she remarked, and tell them “what they can do to prepare” to apply. Some staffers and Garrett, WA SECTF appointee for the agency, would be offering feedback on the information before it was posted online (audio - 3m, video). 
    • Garrett commented that she’d be requesting a 20 minute presentation of the applicant website at the WA SECTF meeting scheduled for July 27th. Her plan was to show “a demo” of the website which she called “thorough,” concluding that “everything they’re needing is going to be very accessible and easy to navigate” (audio - 1m, video).
    • Brian Smith agreed wholeheartedly with Garrett and Becky Smith’s remarks (audio - <1m, video).
    • Garza was similarly “really impressed” with the applicant information and was “excited to have the task force see the information” (audio - 1m, video).
  • Looking at social equity practices in jurisdictions outside Washington state, Becky Smith revealed that she’d met with officials from “Illinois’ cannabis control office” on July 6th to find out more about their social equity program, in particular their licensing, outreach, and “scoring criteria.” She was also scheduled to meet with state and municipal representatives from California that operated equity programs (audio - 1m, video).
    • Garrett wanted to know about the most demonstrably successful cannabis social equity programs. Smith indicated that no effort had “gone really swell, really smoothly" so far. She added that although Illinois staff hadn’t issued any licenses “their questions are good" and offered a chance for WSLCB staff to learn how to approach similar issues (audio - 2m, video). 
    • Garza felt agency staff looked at approaches in other states to “grab the pieces that work for us.” He pointed to Nicole Elliot, who had been appointed as Director of the California Bureau of Cannabis Control (BCC) on July 13th, saying as the “cannabis czar in San Francisco” she’d presented on the social equity ordinance used in that city to CANNRA members. Garza’s impression was that the San Francisco and Oakland programs were having “some success, not just creating it, but implementing it, which is the tough part” (audio - 2m, video).
  • Garza brought up federal legislation to deschedule cannabis, the Cannabis Administration and Opportunity Act, a draft of which had been announced by U.S. Senators that day. He indicated the office of Patty Murray, the senior senator for Washington state, had reached out to him about the draft, stating that comment on the proposal was being solicited until September 1st. As Murray was Chair of the U.S. Senate Committee on Health, Education, Labor and Pensions (US Senate HELP) which had jurisdiction over the FDA---the agency charged with significant cannabis regulation under the draft bill---she had a particular interest in “the public health pieces.” Garza reported that Nordhorn, Assistant Attorney General Bruce Turcott, and Policy and Rules Manager Kathy Hoffman had begun to review the draft for “anything conflicting” with Washington law and rule (audio - 2m, video). 
    • The summary about the proposal, which had been anticipated since February, specifically thanked “Senator Murray and her HELP Committee staff for their work in developing the Food and Drug Administration and public health components of the Discussion Draft.” 
    • Drug policy and cannabis sector experts began to weigh in on the draft within hours of its announcement.