WA House COG - Committee Meeting
(January 8, 2018) - HB 2334 - Public Hearing

In its initial public hearing, legislation to set requirements for CBD additives from outside the 502 system received mostly negative comments from those concerned it could hurt farmers and patients.

Here are some observations from the Monday January 8th, 2018 Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• HB 2334 (“Regulating the use of cannabinoid additives in marijuana products”) received a public hearing on the first day of the short 2018 legislative session.
  • The bill was prefiled by WA House COG Chair David Sawyer in December 2017 and had been assigned to the committee he led earlier that morning.
  • WA House COG Counsel Thamas Osborn told members that cannabinoids “encompass a wide variety of organic compounds derived from the cannabis plant” and that cannabidiol (CBD) was “believed to have potential health benefits, it is the active ingredient in most medical marijuana products.” He said that “in its purest form CBD does not contain tetrahydrocannabinol, known as THC, which is the cannabis-derived psychoactive compound that causes euphoric effects” (audio - 4m, video).
    • Though “properly purified” CBD isolate would still contain THC, “the percentage of THC is generally small. It does not reach levels typically found in regulated recreational marijuana products,” said Osborn. He emphasized that under state law, substances with less than 0.3% THC were “not considered to be controlled substances.”
    • Osborn commented that CBD had been “used as an additive by licensed marijuana processors in order to enhance the CBD content of medical marijuana products.” He said that while many processors had “the technical ability to produce CBD concentrates, it is common for such processors to purchase them from sources operating outside the marijuana market regulated” by the Washington State Liquor and Cannabis Board (WSLCB) and the Washington State Department of Health (DOH). Osborn alleged that the majority of CBD used by processors came “from hemp and are imported from foreign countries engaged in hemp production” entering the United States “in the form of hemp oil.” CBD from Initiative-502 cannabis was already used by licensees to increase the cannabinoid content “of their medicinal products,” he added, “but my understanding is that’s generally not how it’s derived.”
    • Whether CBD was imported or sourced domestically from outside the 502 market, it wasn’t required to be tested “for toxins and other impurities” and Osborn claimed that medical cannabis items with “imported CBD additives may contain toxic substances that are undetected.”
      • In order to be labeled and sold as a compliant medical product, cannabis flower or trim was required to be tested for heavy metals “at the time of harvest or when placed into lots,” while for “products intended for retail sale as concentrates, extracts, or for use as an intermediate product, screening is required only after extraction.” At the time, section (1)(iii) also stated that an “imported cannabinoid must be screened prior to addition to any marijuana product.”
    • Osborn then briefed the committee using the House Bill Analysis, which described the general provisions of the original bill:
      • “Authorizes licensed marijuana producers and processors to use cannabidiol products (CBD products) obtained from sources other than state licensed producer/processors, provided such products are laboratory tested, approved by the Liquor and Cannabis Board (LCB), and meet other specified requirements.
      • Requires that all CBD products used by licensed producers and processors meet legal standards for product safety and purity.
      • Creates a definition of "CBD product" that Osborn commented was “any product containing or consisting of cannabidiol.”
      • Provides the LCB with rule making authority regarding the use of CBD products by licensed marijuana producers and processors.”
  • Sawyer introduced his proposal, saying “the general concern I’ve heard from industry and other folks [was] that when people move into our 502 system and attempt to buy products” that additives were “being pushed into” those items without required testing. Stating “we don’t test for metals...we don’t test for pesticides,” he predicted the bill would be further amended to “be a little bit more clear on putting it directly into our authority of LCB, the purpose of this bill is that when people go into our 502 system everything is tested and everybody can be assured that it's safe” (audio - 1m, video).
    • Weeks after the hearing, Sawyer would be restricted from contact with his staff following allegations of workplace harassment. He would be suspended as WA House COG chair in May 2018 before an independent investigation recommended he be permanently removed from that role. Sawyer would lose the Democratic primary in August 2018, and was fined after leaving the legislature for an ethics violation related to the harassment claims. 

• The first two speakers testified in favor of the bill, suggesting it was about product safety and consistency.
  • Kristi Weeks, DOH Government Relations Director (audio - 1m, video)
    • Weeks observed that cannabinoids “added into our current products” had been “often ordered online from Europe and China, there’s no regulatory function, there’s no oversight and they often do contain pesticides and heavy metals” which regulators shouldn’t “want in our products.” She asserted that testing requirements developed by DOH staff for compliant products should be required of CBD additives “so that all of our marijuana products are safer and cleaner.”
      • Learn more from the 2019 Hemp Annual Report on China by the U.S. Department of Agriculture (USDA) Foreign Agricultural Service.
    • Weeks left DOH in April 2018 to serve as Director of Legal Services for Washington’s Lottery.
  • Brooke Davies, Cannabis Organization of Retail Establishments (CORE) Director of Operations (audio - 1m, video)
    • Supporting the bill, Davies called CBD a “growing part of our industry, especially in the health and wellness sector of the market.” She agreed that imported CBD wasn’t tested and should still “meet legal standards” in order to be “sold, eventually, within the 502 scheme.”
    • CORE has since become defunct and at time of publication Davies was serving as the Washington CannaBusiness Association (WACA) Deputy Director and Associate Lobbyist in addition to her lobbying work.

• Six individuals testified against the legislation, faulting state regulators for prior hemp and cannabis rules, and voicing concern the bill would put CBD on the list of controlled substances. 
  • John Worthington (audio - 2m, video)
    • Worthington suggested WSLCB representatives “cannot be trusted...to conduct open and transparent rulemaking” required by the bill in subsection (1)(c). He pointed to Results Washington, an initiative to “Improve state government by approaching complex issues through collaboration, performance management, and continuous improvement,” alleging WSLCB officials had established a “separate rulemaking process that the public didn’t see” for cannabis policy making. Worthington believed the agency had used “A3 papers” in alignment with an executive order mandating that “they’re required to collaborate with all these other agencies.” He said a former board member described this as “a separate process to gather information” and asserted that it was necessary due to agreements between WSLCB and the federal government, which prohibited cannabis. This kept “working copy” drafts of agency rulemaking secret “under the attorney-client privilege” with counsel from the Washington State Office of the Attorney General (WA OAG), Worthington argued. He continued by saying that when a citizen “goes to see what they made their rules from you will get a final copy” instead. Considering this process “repugnant to the rulemaking” system, he said the result was moving “a lot of money to diversion” and WSLCB leaders “hired a bunch of cops...on top of” federal Justice Assistance Grants, the High Intensity Drug Trafficking Areas (HIDTA) program, “and the counterdrug program, and everything else.”
      • Learn more about the problem solving method used by Results Washington staff in a “Lean Business Practice” called the “PDCA cycle,” and the function A3 reporting serves in guiding the method. A3 was also covered in an October 2020 presentation “What’s the Real Problem? Learn Root Cause Analysis to Solve Organizational Problems.”
      • See Results Washington reports for WSLCB:
        • 2016 Strategic Lean Progress Report on Contract Workload
        • 2016 Strategic Lean Progress Report on Customer Status on Procurements 
        • 2016 Strategic Lean Progress Report on In Person Marijuana Tax Payments
        • 2017 Strategic Lean Progress Report on Procurement Process - Blanket Approvals
        • 2017 Strategic Lean Progress Report on Procurement Process - Customer Status
        • 2017 Strategic Lean Progress Report on Procurement Process - Expectations
        • WSLCB leadership response letter to the August 2018 Washington State Auditor performance audit on “Improving Cannabis Risk Management Tools Using Business Transaction Data.”
        • 2019 Strategic Lean Project Report on Special Occasions License Application Process
        • 2020 Performance Audit Action Item and Status - Improving Cannabis Risk Management Tools Using Business Transaction Data
  • Steve Sarich, Washington State Hemp Commission (audio - 2m, video)
    • Sarich noted Washington State Department of Agriculture (WSDA) staff were no longer issuing hemp pilot licenses, which he found to be proof of “incredibly ham-handed overregulation” of the crop which had allegedly “killed the hemp industry here in the state.”
      • The 2018 Farm Bill federally legalized hemp plants with 0.3% THC or less, and Washington lawmakers legalized hemp production in February 2019. The WSDA hemp program was subsequently restarted and staff hosted several webinars on the program in March and April 2021.
    • “Today, over 99% of the multi-billion dollar CBD market is divided up between the...nutraceutical market, the food supplement market, the cosmetics and beauty product market, and this bill will wipe out the availability of CBD in these valuable markets here in this state,” Sarich said. He stated the recreational CBD market in the state was “nothing, just nothing, but you’re going to take it away from people who really need it.”
    • Sarich testified that CBD was “the most valuable product produced by the hemp plant” and that “70% of the hemp crops being grown” in Kentucky, Colorado, and Oregon “are CBD crops.” He viewed HB 2334 as lawmakers saying “we should take [CBD] away from the hemp farmers” which he anticipated would be devastating.
    • “This is being done for the pay-for-play system,” he said, “for GW Pharmaceutical” and Greenwich Biosciences. Sarich shared a letter he alleged showed the companies advocating for restrictions on CBD “all over the country right now.”
      • GW Pharmaceuticals received federal approval for Epidiolex, which the company termed “the First [U.S. Food and Drug Administration]-approved Plant-derived Cannabinoid Medicine” in June 2018. In March 2019, Greenwich Biosciences Director for U.S. Federal Policy and Advocacy Deborah Walter offered testimony “to help inform the [U.S. Department of Agriculture]’s implementation of an industrial hemp program.”
    • Sawyer indicated that use of CBD as an additive was already occurring in the legal market, and that importation of “unregulated, untested” hemp was a current market situation. “You can’t stop products coming in from China,” Sarich replied, but he believed CBD used in Washington products was “coming out of Colorado and Kentucky, they’re not coming out of China...no one buys anything out of China.” He said there were “24 pages” of pesticides allowed for use on cannabis, concluding “I don’t want that on my CBD” (audio - 1m, video).
      • Pesticides allowed for use in cannabis production are listed under ‘marijuana’ in the crop search function of the Pesticide Information Center OnLine (PICOL) Database operated by Washington State University (WSU). At publication time, the “Quick Search” for “I-502/I-692 (WA only)” showed 383 registered products.
    • Sarich founded CannaBiogen Research in October 2018.
  • Poppy Sidhu, Medical cannabis patient (audio - 2m, video)
    • Saying that “naturally-occurring, non-psychoactive” CBD in hemp was “not a controlled substance and is not on any federal schedule,” Sidhu asserted CBD was also “removed from our state Controlled Substances Act.” She cited the World Health Organization (WHO) as finding “no evidence of public health problems associated with the use of pure CBD.” Sindu described CBD as “generally well tolerated with a good safety profile” with no health problems attributed to it, and potential for the treatment of epilepsy and “many other medical applications” including the “treatment of drug addiction.” She found CBD to be “one of the safest products on the market” and “certainly safer than almost any pharmaceutical product sold in the United States.” Sidhu commented that the legal recreational cannabis system was “under fire” from federal authorities and, were HB 2334 to become law, it would “limit all production and sales of CBD to the marijuana industry.” In the event the adult-use market was outlawed, she asked “where will the patients of this state get their CBD...once other sources are outlawed?”
      • Read the Critical Review Report on CBD released by WHO officials in June 2018.
      • See an August 2019 academic paper covering Cannabidiol (CBD) use in psychiatric disorders: A systematic review.
    • Sawyer observed that “we’re not attempting to stop CBD, we’re saying, ‘we need to make sure it’s tested.’” He wanted consumers to “have a safe product” noting “the [CBD] that we have tested” was “not coming back very clean” (audio - 1m, video).
  • Dana Luce, G.O.A.T. Laboratories Owner (audio - 2m, video)
    • Luce reported CBD was being imported, with “a lot more coming out of Oregon” where “steam extractions” were being done to refine material. He added there wasn’t “pesticide inspection in your recreational cannabis, unless it’s sold to the medical market.”
    • Luce said WSDA and WSLCB staff had released a bulletin on legal cannabis pesticides several days prior which found “Five Products Contain Undisclosed Pesticides.” He noted licensees were only required to disclose pesticides used by putting “a disclaimer on your product when you sell it.” He noted this bulletin was “not a recall” and the situation could endanger consumers.
    • Luce added that a competing lab had been “recently suspended” by regulators “for not doing the E. coli or salmonella testing” yet the products they tested weren’t recalled. Luce couldn’t see how giving WSLCB staff power over CBD additive regulation would improve the situation.
      • In December 2020, WSLCB officials suspended Praxis Laboratory following evidence of falsified cannabis test results for over 1,200 samples. The lab shut down following an investigation that revealed tampering with cannabis test results, potentially as far back as 2018. Praxis Laboratory leaders withdrew their appeal of the suspension in May 2021.
  • Stephen Rowland (audio - 2m, video)
    • Rowland believed that the bill as written added “the term ‘CBD product’ to the state controlled substances list” which he found unwarranted and echoed Sidhu’s comments on the benign nature of the compound. Though he agreed imported CBD should be tested, WSLCB “doesn’t need to do that.” He said WSDA officials had “eliminated CBD production” and that their hemp program had lost its funding, meaning the state hemp market was “pretty much dead.” 
    • Rowland added the compound was no longer considered a performance enhancing drug by the World Anti-Doping Agency (WADA).
      • On July 2nd, officials for the U.S. Anti-Doping Agency (USADA) announced that runner Sha’Carri Richardson would be sanctioned for testing positive for THC in the U.S. Olympic Team Trials on June 19th. Richardson accepted the suspension, noting she had used cannabis for personal reasons rather than as an athletic boost. USADA considers THC a “substance of abuse,” and some advocates argue enhanced athletic performance is not one of the benefits of cannabis.
      • Find out more from WADA cannabinoid resources.
    • Sawyer stated that the intent of his bill was “not trying to bring hemp back into controlled substances” but only to ensure CBD in the adult use market was “clean.” He promised to look at re-drafting the proposal to see that it wouldn’t rejoin the state list of controlled substances “if that’s what it does” (audio - <1m, video).
  • Pamela Bosch, Highland Hemp House (audio - 3m, video)
    • Speaking for several “cannabis and hemp” advocates she knew, Bosch talked about her experience constructing a house made from hemp in Bellingham, Washington. She said in working with local officials, WSDA representatives, and the Washington Farm Bureau, she’d realized farmers “have a tremendous economic opportunity with growing hemp.”
    • Bosch worried that having “any part of this plant labeled as a controlled substance” would be “really detrimental to income, to environment, to health.” Expecting CBD to “be handled through the marijuana growers” would be a “mistaken move,” she said, stating that other countries had moved to regulate the compound and “treat the whole plant as a beneficial plant because it has nutrition, it has energy, it has health benefit[s].” Bosch hoped the public would get “a voice in this process” so that the “public good is represented, not those economic interests” that were “narrow” and “destructive.”

Information Set