WSLCB - Executive Management Team
(March 20, 2019)

Here are some observations from the Wednesday March 20th WSLCB Executive Management Team public meeting.

My top 3 takeaways:

• Agency leadership hosted an Enforcement Program Update and Team Discussion.
  • The “work session” format was a recent change to Executive Management Team (EMT) meetings and WSLCB Enforcement reform has been an important topic in recent agency public meetings and legislative hearings.
  • Board Chair Jane Rushford stressed the work session format was still going through “refinement” and added, “there isn’t one specific formula for this.” Rushford set the goals of the session:
    • “To implement a process that ensures issues of significance are thoroughly and collaboratively considered in a timely manner.”
    • “To identify connections between divisions and programs that maximize resources and outcomes and engage those impacted or affected by potential change, expansion, or restriction.”
    • Rushford confirmed she was amenable to updating the work session format going forward.
  • Enforcement Chief Justin Nordhorn described his concept of “operational consistency” which involved not just enforcement officers but staff in other divisions. He included consistency of agency language, consistent application of laws and rules in approaching licensees or conducting business, and consistent “reasonability” when looking at mitigating factors in the field. He stressed different “pressures” were in play in different regions of the state which could impact enforcement priorities, assumptions, and expectations. Nordhorn also emphasized the importance of building trust with stakeholders because “we’re not going to be consistent 100% of the time.” While not an issue of consistency, he mentioned the need to value compliance over punitive action (audio – 12m).
  • Board Member Russ Hauge gave the first feedback drawing on his experience as a former prosecutor where his job was “all about exercising discretion under the law, which is the same exact problem that we face with enforcement.” He said agency management could provide “clarity” on vague or unclear issues, and cited traceability violation compromises as a common example: “There’s no bar to [the Board] giving you an advisory opinion.” The second idea he offered was to provide licensees written “enumeration of the aggravating and mitigating factors that [enforcement] are trained on.” Nordhorn called the idea a “positive step” that would benefit “shifting” enforcement staff around the state, particularly newer officers or those coming from other law enforcement cultures which have more “restrictive regimes.” There was mention of creating an accessible “repository” of prior enforcement decisions and interpretations to aid field actions and document law and policy updates (audio – 7m).
  • Rushford wanted to “check in with folks on the goals” and asked “how do we grow consistency in a subjective circumstance?” (audio – 1m).
    • Director Rick Garza, argued consistency had long been an agency goal but “I think the challenge has always been how to make that happen.” He noted hosting webinars with staff had already been initiated by Nordhorn but communicating expectations to supervisors was difficult. “The path of least resistance, if you will, for an officer” explained Nordhorn, “is basically write it up and let somebody else decide later.” He added that new officers need to “buy in” to find “benefit and value in exercising their discretion.”
    • Hauge and Nordhorn agreed “individual internal consistency” from officers was less important than the “greater objectives” around public safety and compliance.
    • Rushford wondered about the key “principles or commitments” officers make and how best to instill them. Nordhorn answered that most officers joining his department emphasized an interest in “education,” however, the agency had become more “reactionary.”
    • Becky Smith, Director of Licensing and Regulation, reported similar areas of concern: “it’s communication, it’s training, it’s also in part setting expectations and tone.” She said officers needed to have confidence before they could be expected to exercise discretion. Nordhorn agreed, and indicated less experienced officers were more liable to second-guess themselves.
    • Brian Smith, Director of Communications, recommended setting and reinforcing expectations to staff via webinars. He felt having messages from agency leadership reach officers in the field and answer their questions was beneficial (audio – 9m).
  • Becky Smith argued that webinars weren’t reaching their maximum potential, and said they needed “follow up” or greater emphasis on answering questions raised. She also believed officers were constantly having to catch up to new rules or laws and suggested WSLCB be “more strategic” in the way changes were rolled out to allow staff training and education. Brian Smith said complaints from the industry regarding frequent rule changes belie the fact that changes are often requested by stakeholders and the industry. He encouraged a slower roll out of new rules to allow for training and education (audio – 4m).
    • Earlier in March, Brian Smith shared that leadership of the agency’s organizational change management (OCM) team had become his responsibility. OCM was introduced to the agency by former Deputy Director Pat Kohler during her comparatively brief second tenure with the WSLCB.
  • Rushford admitted, “If it’s going too fast for licensing and it’s going too fast for enforcement, we’ve got to do things differently.” She said the “listen, learn, and contribute” approach of Policy and Rules Coordinator Kathy Hoffman had slowed down the pace of change. Nordhorn argued “repetitiveness on category” was a problem with recent rulemaking. He felt that changing a rule in one area, followed months later by a change in another, should give businesses time to adapt. However, changing a rule in one area, then months later changing rules in that same area again led to “cyclical” confusion on the topic. Rushford concurred but felt the situation had already improved.
  • Nordhorn told the group better documentation on board decisions had helped, and suggested there were leadership training opportunities where consistency could be established as a “cultural priority” for the agency. Rushford said the question of “how will we communicate this to our employees?” was a powerful step towards consistency. Smith said being ready to train staff and stakeholders, not just communicate with them, was crucial for effective understanding. Rushford agreed there needed to be a variety of communication efforts (audio – 8m).
  • Garza inferred that communication and training on changes was losing effectiveness by not including Nordhorn and Hoffman directly to tell staff “what those rules are meant to do and why.” Garza felt his regional meetings were important “high level” communication but that “I don’t think I’m helping them do their jobs.” Instead, Garza wanted Nordhorn to help him provide more rule change context and reasoning for changes to officers.
  • Referring to ESSB 5318, Garza said the bill’s “compliance before violation” approach and the agency’s pending changes to its penalty matrix needed to be explained to WSLCB staff clearly. He mused about identifying the best method to communicate and elicit feedback from officers. Garza said there were times where the industry had a greater understanding of changes than enforcement. Smith said when they’d asked officers, they wanted to hear about changes in an agency email or from their supervisors.
  • Deputy Director Megan Duffy asked if communications contained an explanation of how changes would impact officer actions. Nordhorn said it wasn’t and agreed that could be improved. He also thought short, explanatory videos for supervisors, officers, or licensees could help – but have been too costly to produce (audio – 8m).
  • Reviewing current laws and rules, several team members offered suggestions (audio – 9m).
    • Nordhorn acknowledged several “built in statute” violations still read “an officer shall” leaving less discretion and giving an impression WSLCB made a choice when really they were following an explicit law. He said officers coming from other departments understood there was some flexibility on laws which less experienced officers might rigidly apply.
    • Hauge said by “training and inclination” officers looked at situations as “black and white” rather than working with licensees. He admitted, “I think it’s our responsibility, at the board level in particular, to help solve that problem.”
    • Nordhorn said local pressures and opinions wouldn’t go away or be uniform and represented a “continuing challenge.” He said “time and capacity” was another issue where the volume of work exceeded available time. He suggested a “listening session” for agency leadership to hear concerns from staff on key topics. Rushford responded that some of the identified challenges were also opportunities, but time and capacity in particular necessitated a “deeper dive” to strengthen the agency.
  • Nordhorn wrapped up the discussion emphasizing the need to share best practices within the agency and with stakeholders.
    • He advocated for a “more formalized, root cause type of analysis” whether from a workgroup or consultant to identify inconsistencies. He warned against a “time constraint to be sure we have the time to spend on that and not jump to the conclusions and solutions” (audio – 2m).
    • Engrossed Substitute SB 5318 creates a “legislative work group on cannabis enforcement and training processes and procedures” in Section 10.
    • WSLCB has issued a request for proposals (RFP) for an independent consultant to study agency enforcement, a proactive measure recommended by Governor Jay Inslee in response to lawmaker concerns.
  • Rushford praised Nordhorn’s efforts, and invited others to help identify “low hanging fruit” solutions to pursue. Nordhorn suggested work sessions have subsequent follow-up chats to get additional input after the EMT “listen/digests/read” up on a problem or discussion. Rushford was supportive of this format change. Nordhorn said enforcement consistency had been a long-standing concern and that he’d had “active strategies” to improve communication and expectations. He looked forward to further feedback.
  • Duffy said these challenges were “inherent in organizations” and that she was eager to help the EMT “learn from each other.” Garza added that while staff liked hearing changes from their supervisors, the legislative and rulemaking process meant some decisions were made above supervisors and wouldn’t include them until after-the-fact. He said getting out and explaining to staff as well as collecting their feedback was important to gauge impact. Nordhorn said that could help “tie line staff into the strategic plan” for the agency (audio – 10m).
    • During the March 6th EMT, Chair Rushford shared a high-level “Strategic Plan 2019-2024” document acquired by Cannabis Observer via public record request.
  • On Tuesday March 26th at 3:30pm, the House Commerce and Gaming Committee was scheduled to host an executive session for ESSB 5318. The committee will take up the Kirby amendment which was not ready in time for the House policy committee public hearing.
    • Details on the Senate policy committee public hearing and executive session, and the Senate fiscal committee public hearing and executive session. Engrossed Substitute SB 5318 (ESSB 5318) was passed by the full Senate on March 11th with one striker amendment.
• Staff described their program priorities including enforcement education and traceability.
  • Becky Smith explained that her current focus was education for licensing and enforcement staff after collecting common questions from each region. She introduced the group to a ringlet and other documents which covered details such as alcohol licensing and special permitting, cannabis license forfeiture, discontinued businesses, or floor plan modifications. The documents also included detailed contact and resource information to direct further inquiries. Smith and her department managers planned to gather feedback from regional offices after distribution (audio – 6m).
  • Duffy reported on a traceability contract amendment with MJ Freeway she described as “extremely detailed by task and date” and which would establish a “legal nexus to that schedule and to the work.” She reported MJ Freeway’s executive sponsor role would shift from VP of Engineering Ike Hull to the company’s COO, Ray Thompson. Duffy mentioned the various staff Thompson was responsible for and observed, “it’s a good thing those resources are all under his umbrella.”
    • Here is the sixth amendment to the contract between WSLCB and MJ Freeway adopted on January 10th.
  • Specifically because of delays introduced by the traceability project, the systems modernization project (SMP) steering group decided to “delay the actual implementation of SMP.” Duffy anticipated SMP implementation would occur around the “end of summer, beginning of fall” (audio – 2m).
• Board Chair Jane Rushford looked ahead to future EMT work session topics and changes to board meetings (audio – 17m).
  • Rushford explained that EMTs would be hosted every other week for the remainder of the legislative session, then return to a weekly cadence. She said the work session format and follow ups would continue after session close.
  • The team tentatively agreed the next work session on April 3rd would cover Quality Assurance (QA) Testing and Product Requirements and be led by Kathy Hoffman.
    • On April 9th from 1-3:45pm PT, WSLCB will host a Marijuana Quality Assurance Testing Rules Listen/Learn/Contribute Work Session. The invitation to the “Listen and Learn” forum and webinar described it as “an opportunity for licensees, lab representatives, and others to contribute to draft conceptual rules regarding quality assurance testing for cannabis” (agenda, draft rules).
  • Future EMT work sessions may include:
    • April 17th: the launch of Rushford’s Cannabis 2.0 initiative
    • April 24th: discussion on business equity led by Becky Smith
  • Starting July 1, 2020 the Board intends to enable remote testimony from several proxy locations around the state. Rushford termed it as “ambitious” but said, “[the Board] thinks it’s important to move towards it.”