WSLCB - Board Meeting
(October 25, 2023) - Transcript - Cannabis Observer

Good morning, Chair Postman, members Garrett, Vollendroff, staff and guests the lobbies are open and the recording has begun.

Thanks. So, good morning everybody. We'll convene the Liquor and Cannabis Board meeting for October 25th, 2023.

The first time on, item on our agenda today is an update on our Social Equity program in cannabis. I'm going to turn it over to Aaron Washington who's our Social Equity in Cannabis Program Manager, and Linda Thompson, the Cannabis Manager, I'll let you all take us through it.

All right. Thank you. A good Wednesday to you, Chair Postman, members Garrett and Vollendroff. I'm Aaron Washington, Social Equity Program Manager, along with Linda Thompson our Cannabis Licensing Manager. We are providing an update about our Social Equity applicants moving forward to complete the licensing process. The Social Equity team facilitated a webinar on Friday, October 13th at 12 noon. The purpose of this event was for Social Equity applicants to get to know the team, and ask any questions they have about next steps. There were 23 participants in attendance, and we received questions pertaining to ownership changes, locations, and available grants. We deferred questions regarding grants to the Department of Commerce who is tasked with overseeing that program. Its representatives were also in attendance. We provided applicants the person to contact and the link to the Department of Commerce website. All other questions or answered by the licensing team during the webinar. We followed up with Social Equity applicants, including those who were unable to attend, by sending a YouTube link to view our recorded webinar; a copy the of PowerPoint we used for our presentation; a document listing the questions and answers to applicants for future reference; and a voluntary survey to learn the demographics of our applicants. We are tracking for additional feedback about the webinar to inform our future efforts. Thank you for the opportunity to present today, are there any questions that you have that I can answer?

Um, quick one. Other than the questions about grants, which is the Commerce thing. What's your sense of what's on applicants' minds? What are the most concerning issues if there are some? And are we able to get answers that are- seem be to helping?

Well, many questions are around being able to change the ownership, or entity, and their business which they would have to wait for another year, and Linda will allude to that. But that seems to be the biggest question that people have so I can let Linda go into more detail about that.

Yeah.

Have you seen results yet coming in from the survey, and have any idea of a time frame that we might can get the demographics?

We're hopeful to have more participants in that survey by Friday. We have about- So far, there's about 16, so that's about 32% of our total, you know, identified applicants. So, we're still waiting for more to come in in order to give a better picture of what our demographics look like.

The next- Yeah, just gonna say if no other questions. I'll hand it over to Linda Thompson

Great.

Good morning Chair Postman, members Garrett and Vollendroff. I'm Linda Thompson, Cannabis Manager in Licensing and will provide an update on the applications. So, all applications have been assigned to a Licensing Specialist Senior as of September 28th. At that time, all applicants were notified of who they would be working with and their contact information. As of today, 94% of applicants have completed their initial interview. Some have already submitted initial documents for review and have scheduled, or had a second interview. One application is completed and was sent to final approval on Monday, which is the final stage of the process. The Licensing Specialist Seniors have received the same kind of questions that we received at the webinar. The most frequently asked questions are about the grants, how to access them, and when they will be available. Additionally, applicants have asked about making changes to their entity structure like Aaron mentioned, which isn't allowed until one year after licensure per rule. So, thank you for the opportunity to provide an update today, and are there any questions that I may answer?

How many Licensing Specialists are there? Like how many are, like, I'm trying to get a sense of the caseload that they've taken on here.

So, there's only three dedicated Licensing Specialists that are processing the Social Equity applications.

Okay. Yeah, so they've got- I can't do the math, but more than 10 a piece.

Oh, yes.

Yeah, that's a lot of work.

They have at least, that's 17 a piece. Yeah.

Yeah. Okay,

Linda, I just had a quick question. So of the, so 94% have been contacted. That's great, the other six percent. What's the- Why haven't they been? Cause, is it just capacity, or is it lack of an ability to contact? What's that six percent?

So there's, there's three left. So, so there's one that scheduled an interview in November. They selected like November second or whatnot.

Okay,

And then the two others are deciding on a date and time. So, so it's not a lack of contact. They're just trying to figure out when they would like to schedule.

Great. Thank you.

You're welcome.

Linda, or, what- Why do you think we're getting the questions about the ownership transfer? What, what's the underlying issue there, do you think? Is that like hoping for financing that maybe isn't solid today, or mistakes during the application? They would have done it different?

I think Linda could probably answer to that in more detail. But, but yes, those are definitely factors that we've come across. Linda, would you like to go into more of that?

Yeah, you know, I don't know if it would be, you know, be financing or whatnot because they can, you know, can of course get fine- financers, financiers, but they just want to change, like, the structure like maybe changing it from, you know, sole prop to something else, right? So, you know, I don't know. I know that, you know, we've said in the beginning that, you know, there was no, no changes whatsoever. So yeah, I- I really don't know but they just- Besides wanting to change who the players are, you know?

Right. I think that too, with small business, I mean sometimes, you know, your arrangement can change and given the time frames that we've had for people to apply and, you know, different changes along the way while going through that process. Sometimes that could just give rise to "hey, here's a new opportunity," a new person that can come on board. So, they're asking about that to try to, you know, have the opportunity to bring their business to fruition, if you will. So those are some of the, the thoughts that we have, and even some comments that we we've seen with some of those who participated in the webinar, as well.

Okay.

But the structures still has to s- stay the same of whoever it is of under Social Equity, the 51% and ownership, and all.

Yeah, so even- so after a year of licensure when they are, are able to make changes. It's- they still have to meet the criteria to be considered a Social Equity applicant to be added. For up to five years.

Okay, that's what I thought. Okay.

Great, any other questions? Okay, great. Thank you both, good update, appreciate it.

Thank you.

You're welcome.

Very welcome. Thank you.

Okay, we'll move to a bit of cannabis related rulemaking and Daniel Jacobs, the Policy and Rules Coordinator, is going to take us into medical cannabis endorsements. Mr. Jacobs.

Thank you Chair Postman, and good morning board members Garrett, Vollendroff, LCB staff, and members of the public. This morning, I'm going to be requesting approval for the filing of a CR-101 pre proposal statement of inquiry to begin the rulemaking process regarding medical cannabis endorsements. If approved today, there will be a public comment period open until December 9th, which is a Saturday. So, really you can get comments in until Monday morning.

In January, John Kingsbury submitted a petition for rulemaking seeking revisions to two regulations; WAC 314-55-020 and 314-55-080; regarding medical cannabis endorsements for cannabis retailers. The petition specifically requested that a revocation mechanism be added to rule to allow the LCB to revoke an endorsement for retailers' failure to meet the regulatory requirements for holding the endorsement. Upon review, WAC 314-55-080 section 6 already provides the LCB with the authority to rescind an endorsement for failure, for failure to meet the various requirements for holding the endorsement. However, the board voted at the end of March to accept the rulemaking petition as an opportunity to update the rules on medical cannabis endorsements as needed. For example, under the current rules, theoretically as as soon an endorsement holder fails to meet one of their requirements which include having an employee certified as a medical cannabis consultant on staff, having a representative assortment of cannabis products necessary to meet the needs of patients, or being able to issue ID cards to medical cannabis patients, the endorsement holder's immediately non-compliant and therefore no longer eligible to hold the endorsement. LCB staff have identified this and believe it may be prudent to create a clear period to cure, where the endorsement holder has a certain amount of time to remedy the non-compliance before the endorsement becomes subject to rescission. This is just one example of rule updates that may be appropriate.

If approved today, as I mentioned, the public comment period will last until Saturday, December 9th with proposed rule language posted on the website ideally in early January which would put stakeholder engagement sessions in mid-January, and the CR-102 with proposed rule language tentatively filed January 31st. This would put the public hearing tentatively on March 13th, and assuming all goes well, rules finalized by the end of March to have them in effect, in effect by the end of April.

Lastly, I just want to mention that two of LCB's other divisions, Licensing and Enforcement and Education, are currently engaged in mapping out an across agency and collaborative effort with our partners at Department of Health on refining the process and procedures for cooperative engagement on oversight of medical cannabis endorsement holders. We share regulatory authority over these endorsement holders with the Department of Health, and with LCB regulating the licensees themselves while DOH regulates the medical cannabis, and the certification of the Consultants, as well as the ID cards. Um this process, or this continued collaborative effort is going to be continuing simultaneously with the rulemaking process and there may be some overlap that ends up reducing the need for rulemaking depending on the results of both. But these two efforts are to going be going on at the same time as a way for the agency to look at medical cannabis endorsement holders from different angles. I'm more than happy to answer any questions at this point, but I am requesting approval for the CR-101 for medical cannabis endorsements.

And thank you, Mr. Jacobs

One, just as we always say, but you know, approval of a 101 doesn't mean that we end up doing rules. It gives us this formal structure around looking at it. What you do, I think we should end up with some rules here. I think it's, this is an opportunity that some of us been waiting for to try to improve the system. I'm very interested in, and somewhat concerned, with the last thing you were saying about, you know, the internal work that's going on just in the sense of making sure that you and those divisions are staying in close contact during this period to see if, you know, as you said maybe what comes of it reduces the need for rulemaking, but it also could increase the need for rule making depending on where we go and what that looks like. And I just want to make sure that when we get, get to that the end of this part of the, the process that we have a unified approach where the internal policies and the rulemaking are fully informed by each other. Do you know what I mean?

Yes, certainly, and I'm- I mean, I think some of the same folks that are engaged in sort of leading the collaborative effort with Department of Health. Those are the same folks that are going to be involved in the rulemaking. So-

Okay.

And that's been and that's been something that was flagged to us even to the rules division or the rules unit. Even when we started talking about filing this 101. So the two processes are gonna be you know, and I think inextricably tied together. And so yeah, I, I think agree that it's, it's not gonna be where we're gonna do this in such a way so that the left hand and the right hand are doing the same thing, right?

Yeah. Yeah, and then hopefully by the end of the year then, together, we've got some substantive approach here to take a step forward on medical cannabis is my hope, so.

Yes.

Okay.

Other questions?

I have a question. I too believe we should move forward. I had a question about the ID cards and the scope of, this is actually where I'm going, like, do we know how many medical cannabis users there actually are and who this impacts, and, and I know that looks like that's a DOH responsibility in terms of the ID cards. So, I'll stop there and then I might have a follow-up question depending on the answer.

Sure, so I'm, like you mentioned- So because the ID cards and the issuance of those ID cards that is DOH's sort of regulatory bucket. However, we are, it does affect us because our rule requires that licensees and endorsement holder have the capacity to produce cards. So part of the work with DOH is, from my understanding, going to involve DOH looking at if they suddenly see that an endorsement holder hasn't issued any ID cards in several months or some period of time, they're going to reach out and be like, hey, that's- Is there something wrong with your machine, or is, is- are you, are patients just not getting cards? They're gonna look into that. Um, so my understanding is that we don't have those numbers, but if, like I mentioned, if a store or if a endorsement holder suddenly stops issuing cards that's something that's gonna get flagged to us, and that we're gonna work together on because, because it's in our requirements, too.

If, if an individual- oh, go ahead.

For you know, I don't have the numbers up top my head. I have heard a couple of things, one, some concern that it's hard to get an accurate number. But I also think it is fair to say we have a relatively low number of people on our registry, particularly compared to how some other states might handle it, and I think that you raise a good question. We should all know that before we start even into this process too much further. So we really know the universe that we're dealing with.

So, my follow-up question is once an individual is issued an ID card. Is that a ID card in which they have, like forever, or is, do they expire if somebody doesn't use it? In a period of time, how does that process work?

One year?

Yep, annual renewals.

Annual renewals?

Yeah it's only one year, annual.

That's fantastic. Well, I'm still, one, I appreciate the work that's happening with E&E and Licensing. I think that can't do anything but be helpful if in fact we are coordinating with the rulemaking process, but I think we should move ahead as well.

Right.

Any other questions? So yes, if not, then we'll take a motion to approve this CR-101 for medical cannabis endorsements.

I move that we approve the CR-101 for medical cannabis endorsement.

And second?

I second that.

Thank you, great, and that is approved. Thanks, Mr. Jacobs. Good luck with that one.

All right. Thanks so much.

And then the last thing I'll say that because we have this sort of mixing of the internal discussions and, and now the 101. I just hope that the board, too, is able to stay engaged in that conversation and, and has eyes on what what this is gonna look like as it goes through it's iterative stages. So look forward to those talks actually.

Okay, we're to general public comment. We don't have anybody signed up in the room. So it's just our our virtual participants today. Everybody has up to four minutes to speak, as always. I request that people limit comments as much as possible to LCB business. Certainly refrain from personal attacks or going off topic. Somebody wanders too far, I, I will nudge you back on to topic. Ask people in the rooms to be, in our room and everywhere else, to be respectful of those speaking and vice versa, and everything is recorded, it'll be online later today. You get four minutes, when you have 30 seconds left Dustin will interrupt to give you that heads up and then we ask you to finish within that four minutes.

And the first person we have signed up today online is Christopher King.

Good morning, Chair this is Dustin, Christopher King registered to speak but is not online today.

Okay.

Then the other one is Peter Manning.

Good morning Chair, this is Dustin, again Mr. Manning was having some technical issues earlier. He has called into the meeting, but without being on the actual Teams platform we can't enable any microphones.

Oh, he can't participate just by telephone, okay. It's unfortunate then. Okay.

Well, those are the only two signed up. Any chance Christopher King just joined in the last 30 seconds? Before we close the meeting.

No, okay. Yeah, people who signed up and are unable to connect can submit written comments, of course, and we'll make sure that gets to board and staff.

Mr. King is on now? Hey Mr. King, I, I hear you've joined us. You can go ahead.

Okay. Great, I believe I'm on now. Just a of couple things real quick. Now we are gonna play Q&A for little a bit, Mr. Postman, because you made an affirmative statement the other day, a couple meetings ago that "these people aren't journalists," were you referring to me?

Actually, I wasn't. I wasn't talking to you, or about you.

So therefore, I would infer then that you were talking about maybe Anne Continelli or Luc. Those guys, I think, are journalists too, but I'll leave them to argue that point, but just want to make sure that you weren't talking about me because it was like a broad sweeping comment you made and, and you know, yes so that was an issue there. Yeah, okay. Okay, so one quick second here. Okay.

Because I mean you, you know who Jeff Burnside is, right? Because you were a journalist here until- You know who Jeff Burnside is, right? Yeah, he's won Emmys and stuff like that. Okay, you know that Jeff and I work together, right? Okay. So, so this would be clear if he's a journalist, I'm a journalist too, you know? And I was also the first journalist, I showed this graphic the last time. I was the first person to be recognized by the Supreme Judicial Court the year I moved here. I was investigating a case back in Massachusetts, and I was the first non-commercial entity to be recognized by the Supreme Judicial Court as a journalist. So therefore, I am a journalist, I always have been, always will be. So anyway, next point.

I'm curious now as to what happens, you know, why is there a negative connotation being bandied about for me asking for Director Lukela's resume, you know? I've- as I told you before I took time out of my vacation at Martha's Vineyard because I had heard that he was responsible, potentially, for launching what is the a loan program for, you know, affected people in Colorado and I thought like well, that's a great thing. You know, I'm gonna celebrate that. So I, I don't- There's no negative connotation about Director Lukela. I just to want see his CV and, and maybe help celebrate him with you. So, I'm trying to get it, and I'm getting all this flack as if I'm doing something wrong, and that's unacceptable. He's a public official. We should see his CV, we should know his accomplishments, and we be should secure in them, in knowing that he's taking this agency forward because we haven't seen him yet. He's like an unknown quantity, and I'm trying to help you promote him. So don't give me a hard time when I ask for a CV, just give me his CV. How about that? Is there a problem with that? Because you gave me a blank sheet, you gave me everything was redacted. Remember? So I don't understand why I'm supposed be to the heavy now. Can you explain that?

No, I won't engage with you on it.

Yeah, what's that, your follow up? Okay, good. Great. Thank you. I don't want to have to sue you over it, and you know I will.

So, the other thing. Next, Kevin Shelton he got knocked out of the, this this process right now, the Ponder process and all that, and he was told that he failed, I guess, two of the three of the, the rubrics or whatever, something two of the criteria, but if you read the letter Mr. Postman, and Ms. Garrett, and everybody there, Vollendroff. If you read the letter that he got of the notice of intent to withdraw him, it's not clear how he didn't. It's not clear what he needs to do to be in compliance, or how he failed, and there's an email chain that I sent you guys. Where-

Has Peter Manning been able to join? Okay, he has. Mr. Manning then, why don't you go ahead.

Hey, good afternoon.

Good morning.

Good morning Chair Postman, and Ollie, Board Member Ollie Garrett and Vollendroff. Good morning. Hey, it's good to see you down there, Ollie. Hey, I have a couple things I'd like to express. This is not a complaint, and you know, I, I recently got some communication that we were being labeled as complainers. But I'd like everyone to, that, that is in attendance to understand that had Black Excellence in Cannabis and people like myself not brought to the attention of the public at large that there was a problem with social equity in Washington when it comes to cannabis. It wouldn't- I don't think we'd have 2870 nor would we have 5080.

I think that, we can't - I don't want to be looked at as a complainer. What I want to do is be looked at as a problem, a person that seeks out a problem with the situation and tries to correct it, especially if the people that I represent are being harmed. And I, you know, like, the contrast between 5052 which Whites benefited off of, that process was completed in 180 days. Social equity came out, and it's taking over 1460 days and we still don't have completion of that program, and the reason I'm saying that is because I read the WAC rule, WAC 315-55-570 the preliminary letter of approval means, an approval letter is issued to the Social Equity program applicant for the purpose of securing the Grant from the Department of Commerce, and the location, and other necessities to complete the licensing process.

Stated further down on page four of the WAC rules, preliminary letter approval, once the Social Equity applicant receives this letter, he will be processed and, that will be processed and identified as described in this section eligible for Social Equity applicants will be issued a preliminary letter of approval. Meaning, if they get the permanent- if they get to congratulation letter, they should be able to directly go over to the Department of Commerce and get grant money. We have people currently out there now because there's this, there's a disconnect between the funding to being available to those people that receive Social Equity applications and the Department of Commerce. Now, we have the predators out there preying on people, and this is why there's an uptick in ownership, they're seeking if they can sell because you gave them, you gave them the opportunity to open up the store. At the same time the grant money should have been available there. We had more than three years to work that out with the Department of Commerce, and I just think that that should be mentioned. I would like to see that looked into.

And you know, and you know this is another thing I have to say that I was- I go back sometimes and I, I watch old videos of our interaction that, on the LCB website, and I ran across an instance where David Postman, or Chair Postman I should say, was communicating with a Native American out of Spokane and she was, in essence, threatening to sue the LCB. David Postman, Mr. Postman, Chair Postman suggested to her that "hey we don't need to go there. Let's try to work this out through mediation." It's just, it's just like there's a difference vibe when it comes to dealing with Black folks because we bring legitimacy-

Peter, you have 30 seconds.

-to the LCB, and we're never offered any type of mediation. We're always, we always have to go to litigation, and you guys know what I'm talking about. To get us to the point when we say something. We're not dumb. We're not stupid. If we're, if we're pointing out facts, why does it take the court to come in inside with us and say "hey, they are right. You guys need to make these changes?" I would like to, to form and bridge a gap with the LCB from the Black and Brown community to-

Peter, that's your time.

Thank you.

Alright, that's everybody we had signed up to talk.

One last thing. I don't want to put you on the spot member Vollendroff, but I know you were just at the Prevention Summit and wondered if you could just give us a quick report on what happened and one about who was honored there.

Of course, happy to. So we have- We're in Spokane. The Summit is still going on. I've stepped away to attend the board meeting.

We had a great showing of LCB staff at the Washington State Prevention Summit. We had four staff from the E&E section. We had several staff from Licensing participate virtually. And we had a couple of honorees here this session. Mary Segawa, who is our prevention specialist, was recognized with the Lifetime Achievement Award last night at a banquet, and the agency itself, the Liquor and Cannabis Board was a nominated and recognized as a state agency who has done exemplary work in the area of prevention. Specifically called out was our agency request legislation this last session. So, it's been great and it's been a great opportunity. I was just leaving a session in which policy was discussed, and I share with the room of individuals an opportunity just like we saw where people can come and sign up and interact with the board related to policies. So, it's been great and it's nice to see that we were well represented, including our director Will who drove over and participated and was here last night. He's actually headed now back over to be in Tacoma today for the Equity Summit, all over the place. But thank you for giving us some time, Chair Postman, to give an update on this. It's really important that we are well represented here.

Yeah, that's great. I'm glad you're able to be there and, and the director, and pass all of our congratulations on to Mary, of course, that's terrific, so-

We've got some great photos to share at a later date.

Okay, good. All right, we'll do that.

All right, then. I think we are done for the day, and we will adjourn the board meeting for October 25th, and we'll see you at caucus next week.