WSLCB - Listen and Learn Forum - Criminal History
(June 1, 2021)

Here are some observations from the Tuesday June 1st Washington State Liquor and Cannabis Board (WSLCB) listen and learn forum on the criminal history rulemaking project.

My top 3 takeaways:

• Attention paid to the rules around cannabis applicant and licensee criminal history had increased since 2020, resulting in a public forum on potential rule changes.
  • Agency staff began evaluating rules around criminal history following several public comments about the standards and review process during public engagements with communities of color in 2020, and later in comments during Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) meetings.
    • On February 17th, the board approved opening a rulemaking project for prospective changes to criminal history checks of applicants and those renewing their licenses.
    • A previously scheduled listen and learn forum for May 13th was abruptly cancelled hours before it was to occur and rescheduled to June 1st. 
  • After kicking off the forum, Policy and Rules Manager Kathy Hoffman prepared to review the conceptual draft changes in each subsection to ascertain stakeholder feedback and suggestions (audio - 3m).
  • Hoffman reviewed the rulemaking project, saying Initiative 502 “established a framework for the board to review criminal history of cannabis license applicants and also provided the board with broad rulemaking authority to create rules related to criminal history background checks.” Hoffman indicated the rules had been created in 2013 and not modified since 2016, but officials began reviewing the standards “in an effort to remove unnecessary barriers to entry into the legal market” specifically for communities “disproportionately impacted by cannabis criminalization.” This was to include “revisions, considerable redesign to support socially equitable conditions by deconstructing current rules to create fair and meaningful access to economic opportunities,” she said. She promised comments would be arranged “and analyze[d] to see if any themes emerge from the discussion” shared “both online and with the board” for subsequent citation in CR-102 materials which would formally propose changes (audio - 2m).
  • Hoffman also provided an overview of the rulemaking process (audio - 5m) and guidelines for the session similar to descriptions she’d offered at prior events. She noted the primary goal was for staff to learn what stakeholders “like, what you don’t like,” and hear recommended changes (audio - 5m). 

• Policy and Rules Manager Kathy Hoffman went over each subsection and heard comments on conceptual draft revisions from representatives of licensees, the public, and a Canadian provincial cannabis regulator.
  • 314-55-040(1) - Criminal applicant or licensee background check. Hoffman read that agency staff could “evaluate whether the applicant or licensee qualifies or requalifies for a license. The background check includes a criminal records check through the Washington State Patrol and the Federal Bureau of Investigation database” (audio - 5m).
    • Lukas Hunter, Harmony Farms Director of Compliance, found the wording “lent a hand” to WAC 314-55-035, the “true party of interest rules.” He noted that “in a future marketplace...out-of-country ownership” could be enabled, which in turn could “make this section of rule limiting if true party of interest [TPI] rules were to change in the future to adapt to a more global market.” Hoffman clarified that Hunter was speaking about a “prospective approach” to background checks for people outside the United States. He confirmed and suggested adding “or other applicable background checking database” to the end of the subsection - “something to allow for more of an open end there so we’re not limited in the future” (audio - 2m).
  • 314-55-040(2) - Review and evaluation of information produced by background checks. Hoffman explained the “entirely new section” dealt with how “information from the background check may not preclude approval but will be considered in determining the applicant’s eligibility for licensure” (audio - 1m). 
    • Hunter asked if the phrasing could be changed to more directly refer to licensing staff at WSLCB who would do applicant evaluations as “the board has delegated authority for threshold decisions to marijuana licensing staff” since around “early 2018.” He was aware that references to “the board” in rule were “generally addressing the Liquor and Cannabis Board, but to more specifically call out the delegated staff” as board members “do not usually take part in a threshold decision, unless, if it gets to a certain point.” Hoffman summed this up as removing “that margin of error language so that it’s more specific” which she considered “a great suggestion” (audio - 2m).
    • Neil Zurawell, Alberta Gaming, Liquor, and Cannabis Commission (AGLC), observed that the background check authorities could be generalized, finding it “kind of limiting” to specify two law enforcement databases. He said AGLC officials would “accept criminal record checks even from other countries” while acknowledging that Canadian cannabis law lacked a residency requirement like Washington State rules. He suggested rather than changing applicable databases in the future “probably just generaliz[ing] it would be better” (audio - 2m).
      • Learn more about AGLC regulation of cannabis and the agency role in legalization.
  • 314-55-040(3) - Threshold review for actionable outcomes. This section featured a table of outcomes based on conviction type, time period, and how many instances would initiate a threshold review by staff.
    • Hoffman acknowledged the presence of staff who had been involved in the rulemaking effort, inviting them to make remarks (audio - 2m).
      • Kevin Milovac, Cannabis Licensing Manager, said he was “excited to hear what everybody has to say.”
      • Nicola Reid, Compliance and Adjudications Manager, commented that she was “looking forward to hearing any input.”
    • Hunter proposed restructuring “the format of time moving forward through this section in rule” as “‘threshold’ isn’t really defined until section six, so potentially moving section six right below section two, and then creating subsections” that included a better definition for threshold decisions. He believed this arrangement of the rule would make “it easier to read...from an outside perspective and having, kind of like, a logical course of action with that definition” (audio - 3m).
    • Micah Sherman, Raven Co-Owner, asked in chat if it was possible to receive an executive summary “of the overall changes being proposed here, how would this work in real life versus...how would this work now” (audio - 1m).
      • Reid relayed that the existing standards for reviewing criminal histories were not “discussed within the rules” themselves (audio - 3m).
        • Staff had concerns that individuals may look at the rules “and think, automatically, ‘Well, I would have eight or more points so there’s no way I would have a license issued to me.’” However, she said there was “very much a review process involved with any application, it isn’t just: You accrue a point value and then we, you know, automatic no. We look into other aspects of the conviction, changes that have occurred after the conviction” as well as statements from the applicant “explaining the history you might have on there.”
        • Reid added that a prior requirement to disclose criminal history back to when someone was a juvenile had led staff to realize “it’s really hard to remember all of that information and what you might be able to obtain from Washington State Patrol” might not include local or federal convictions.
        • She considered “one of the bigger changes” in the conceptual draft was that WSLCB representatives would no longer “be assigning non-disclosure points” and instead seek a broad approval from an applicant to review their criminal history.
        • The conceptual draft rules shorten the time frame reviewed and “extend more grace” with regards to the types of convictions allowed, she stated, including how many convictions a person could have “within a specific time frame.”
      • Milovac agreed with Reid’s assessment, saying staff were trying to “reduce barriers, make it as easy as possible to list what you know...and provide some relief for the ones you may have forgotten about” (audio - <1m).
      • Expanding on Reid’s statements, Hoffman said the draft was “building out” review expectations. Reid added that the explanation of the review in existing rule could be “a deterrent from even applying” and that the changes made the WSLCB application review system “more transparent.” She emphasized that all completed applications would “be considered...independently” and that individuals would have an opportunity to “provide information on your behalf” (audio - 1m). 
      • Justin Nordhorn, Policy Affairs and Outreach Director, provided a “higher level policy perspective” on the draft (audio - 4m). 
        • He said staff working on the rulemaking project were taking “a look through the social equity lens...how can we be more inclusive, how can we reduce barriers in our systems.” Nordhorn talked about how “revamping” criminal history rules increased flexibility for WSLCB officials to “assess...the individual applications” to identify people capable of running “responsible businesses in the state of Washington.” Nordhorn said, under a revised policy, staff would “be able to look at the criteria here and say ‘is this applicable to being a responsible business owner...and how are they going to be serving their communities”.
        • “We wanted to make sure we’re not creating a deterrent to applying,” Nordhorn said, wanting applicants to “feel like ‘Hey, I have a chance.’” He commented that the goals for the process were to “reduce barriers within the rule set and the system so we can make sure that...we’re being more inclusive...we’re being targeted on the business communities” and the “long term history that people have forgotten.” Overall, the criminal history rules would become “more user friendly,” Nordhorn concluded.
    • Zurawell noted that in Alberta, regulations said “a person could fail to pass a records check if they’ve been charged with or convicted of any of, you know, the usual serious offenses” in the Canadian Criminal Code that “in the opinion of the board, it’s sufficiently serious that it detracts from the integrity” of a gaming, alcohol, or cannabis business. Hoffman found this approach “a little more broad” (audio - 2m).
  • 314-55-040(4) - Active state supervision and active federal supervision, resulting in determination of threshold review. Hoffman remarked the newly added subsection meant the board would be able to review any application involving an individual under active state or federal jurisdiction, or both (audio - 2m).
    • Hunter interpreted the language as meaning those under active supervision would still be considered for licensure. He remarked, “it’s cool that that is put there in rule...but what’s the benefit of having this language?” Reid responded that the grid to evaluate convictions in rule comes with “a set amount of points” that put such supervision automatically above the threshold for board review. She suggested the revised wording would try to address prospective applicants who didn’t believe “that they could be considered or have their application reviewed” as opposed to the existing rule phrasing that “make it feel pretty clear that we won’t consider it” (audio - 2m).
    • Bailey Hirschburg, Washington chapter of the National Organization for the Reform of Marijuana Laws (WA NORML) Board Member, commented in chat “To get her voting rights back, my friend had to finish paying monetary sanctions to [Washington] courts. If an applicant was nearly done paying fines/fees for a conviction, would LCB staff consider [their application], or would it be ‘active supervision’ by the state?” Milovac said that circumstance was “another great reason why we’re gonna review it,” to assess if “the supervision still continues or if they just have the fines and fees.” He said staff would be reviewing any “judgements and sentences” involved in the supervision, noting that “in a lot of judgement sentences it says you can’t be around marijuana or alcohol” but potential applicants would know there was “a chance to have it reviewed...on a case-by-case basis.” Reid spoke up to say those applications would be considered and that remaining monetary sanctions “would be some of the, the points that we would be paying attention to in our review.” She believed the conceptual changes would add “more flexibility” to threshold reviews which had “not as much” discretion in their existing form (audio - 2m). 
  • 314-55-040(5) - Pending criminal charge review and evaluation. Hoffman stated the subsection “describes the evaluation process” and spelled out criteria that “include[s], but are not limited to” whether pending convictions, in addition to other convictions the applicant had would put them above the “conviction allowances” in the following subsection. If so, the application “will be placed on hold for ninety days and if no disposition within ninety days, the application will be withdrawn,” she said (audio - 1m).
    • Hunter called withdrawal of a cannabis application “almost a death sentence” since even re-applying for a limited number of social equity licenses put the person behind the “initial wave” of applicants. A 90-day window might be “sufficient for most, it seems that could be prohibitive for some to be able to get their license,” he argued, preferring the time limit be “prohibited” until such time as there was “revolving licensure” for cannabis as there was for alcohol (audio - 5m).
      • Reid felt the 90-day hold “would only be applicable if the convictions could put the applicant over the allotment” of points. She gave the example of an applicant with a pending misdemeanor charge who would remain under the review threshold even if convicted and “we would be able to proceed.” However, if a pending conviction “could ultimately” put someone over the threshold, the 90-day hold allowed the agency to address “concerns for licensure.”
      • Hunter asked where the limit of 90-days came from and “why put a time limit on it?” Reid answered that the time limit was “mirrored in liquor” rules and was “probably” the origin. The window of time was intended “to try to give a few months for some [resolution] to occur” as “the way our systems work it would be really hard to just hold applications for a year, or a year and a half while we’re waiting on, you know, disposition of a conviction.”
  • 314-55-040(6) - Threshold review evaluation criteria. This section would overhaul rules covering applicants receiving a review of the time since convictions and the circumstances around them; how offenses related to “the nature of the work performed”; the number of offenses or incidents; any evidence of rehabilitation completed in relation to a conviction; and other relevant information “submitted by the applicant or licensee, or requested by the board” (audio - 2m):
    • Hunter asked about the need “to put appeal rights in this section of rule...as a reminder to licensees.” He said for any decision “made by the board or a delegate of the board, appeal rights are relevant” (audio - 2m). 
  • 314-55-040(7) - Continued reporting. The final section detailed the responsibility of licensees to “report any criminal convictions to the board within thirty days” which expanded the current 14-day window. Reported convictions would be “considered upon receipt or at the time of renewal.” The section drew no comments from attendees (audio - 2m).

• Hoffman answered a question unrelated to the topic of the listen and learn session before reviewing the next steps for the rulemaking project.
  • In the chat, “Jonathan” wanted to know about fingerprinting requirements for TPIs, saying that “as the [limited liability corporation] LLC manager who works with the investors, the biannual fingerprinting process is really onerous. Why does this need to happen? Don’t we really expect the vast majority of TPIs fingerprints really don’t change?” He called for reusing the fingerprinting documentation first filed (audio - 2m).
    • Reid promised to check with the Enforcement and Education division at WSLCB to find a “more accurate answer”, but indicated “there’s something with the fingerprints where you can’t automatically re-run them.” Hoffman pledged to share the reply with Jonathan.
  • Hoffman wrapped up the forum early, saying the next phase for the rulemaking effort would be to “get our internal work group back together, take a look at the draft conceptual rules and consider some of the feedback that you’ve offered us.” She anticipated having a CR-102 with proposed changes “in the next month/month-and-a-half” and encouraged further input be submitted to katherine.hoffman@lcb.wa.gov or rules@lcb.wa.gov for consideration (audio - 2m).