WSLCB - Board Meeting
(December 8, 2021) - Summary

WSLCB - Quality Control Testing and Product Requirements - SBEIS - Summary of Rule Changes for Flower Producers
[ Event Details ]

The board approved filing proposed cannabis testing rule changes, hosted a public hearing on regulation of cannabinoids, and responded to several public comments.

Here are some observations from the Wednesday December 8th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

  • Policy and Rules staff brought forward proposed rule changes on Quality Control (QC) Testing and Product Requirements for approval by the board in addition to mentioning social equity-related rulemaking and future plans.
    • QC Testing and Product Requirements (Rulemaking Project, audio - 8m, video)
      • Policy and Rules Coordinator Jeff Kildahl previously reviewed the proposal at the December 7th caucus meeting. He elaborated on the years-long effort by agency officials, the last event having been a listen and learn session on October 20th, adding that “comments continued to be offered through November 2021.” Kildahl then explained how the changes would impact licensed producers and processors by modifying testing standards in WACs 314-55-101, 314-55-102, and 314-55-1025.
        • Added a requirement for those licensees “to test all marijuana products produced and sold” for pesticides
        • Empowered “the board to conduct randomized or investigation-driven testing for heavy metals” 
        • Revised “sample collection and storage procedures”
        • Raised the “maximum amount of marijuana flower that may be represented by a single [Initiative-]502 panel of tests.”
        • Revised “the number of one gram flower samples required for testing”
        • Removed “the ability of certified labs to return unused portions of samples to licensees”
        • “Revised guidance to labs on when to reject or fail a sample”
        • Updated “lab testing requirements and procedures” and elaborated on “information regarding testing levels for water activity, potency analysis, foreign matter inspection, microbial screening, mycotoxin screening, and residual solvent screening”
        • Changed “rule language regarding product re-testing, remediation of failed lots, the expiration of certificates of analysis, and referencing of samples, and updated reporting requirements for lab proficiency testing”
      • Given board approval of the CR-102, Kildahl outlined the remaining timeline:
        • February 2nd, 2022: public hearing
        • March 2nd: CR-103 for rule adoption “assuming that no substantive changes are made”
        • April 2nd: effective date
    • Board Chair David Postman offered gratitude to staff for their work. Finding it a dubious distinction to be “the last state to require pesticide testing,” he was “really glad we’re gonna take care of it now.” Postman noted the topic had first been raised in 2018 by “medical marijuana patients and consumers and some licensees came to the agency asking for this.” Postman hoped accredited cannabis testing labs were “watching, see that this is coming...I expect this will be approved” (audio - 2m, video). 
    • Board Member Ollie Garrett moved to approve the CR-102 and, as Board Member Russ Hauge was absent, the proposal passed with Postman’s vote (audio - 1m, video). 
    • Social Equity (Rulemaking Project, audio - 1m, video)
      • Policy and Rules Manager Kathy Hoffman addressed the nascent project and expressed her expectation that draft conceptual rules would be “ready by early January so we can host a listen and learn.” She described how the rulemaking project was an effort to “stay in step with” the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF).
    • Hoffman looked ahead to 2022, saying “significant” rulemaking projects would position WSLCB staff to “be able to respond to rulemaking that emerges from the coming legislative session.” Other issues she told the board would be addressed included “cannabis packaging and labeling, and advertising as well” (audio - 1m, video).
      • Pre-Filed Bills for the session began being published on Monday December 6th, such bills allow for legislators to “prefile bills for introduction in the month before session begins,” to be “officially introduced the first day of the session.”
      • The first cannabis-related pre-filed bill for 2022 was SB 5517, “Concerning employment of individuals who lawfully consume cannabis.”
  • A public hearing on the tetrahydrocannabinol (THC) rulemaking project received one comment suggesting a substantive change to the proposed rules.
    • Hoffman introduced the CR-102 hearing with a “procedural history” on agency action and public input “on the conversion of [cannabidiol] CBD, hemp, or both to delta-8[-tetrahydrocannabinol] and delta-9-THC, and other compounds, and cannabinoids not currently identified in statute or rule” (Rulemaking Project, audio - 3m, video).
      • She reviewed WSLCB activities since the issuance of a policy statement on April 28th which preceded a “relatively narrow” CR-101 on May 12th. 
      • After learning more about the topic, “and in response to the rapidly changing landscape around THC compounds,” Hoffman reported that staff requested that the board refile an expanded CR-101 on July 7th.
      • Draft rule text was discussed at a listen and learn forum on September 9th, Hoffman indicated, and proposed rules were presented on October 13th.
      • Hoffman argued that the changes would create “a framework for the board to evaluate additives, solvents, ingredients, or compounds used in the production of marijuana products” following “a similar structure, in rule, exclusive to marijuana vapor products.” She noted the CR-102 changes went “beyond those narrow constraints" and were allowed under agency rulemaking authority in RCW 69.50.342(1)(m). While not permitted “to ban a specific substance outright,” she indicated that the board could follow a procedure to “prohibit the use of a substance that it may identify as a risk to public safety...or youth access.”
      • She added that there was draft request legislation on the topic under development for the 2022 legislative session to “hopefully expand that authority.”
    • Postman considered the rulemaking and request bill “a package deal" developed in response to the use of converted cannabinoids in legal cannabis items. “We feel we need both of those done in order to have the regulatory authority system we need” for a “fast-changing and dynamic part of the industry,” he said. Affirming “we can only do what the legislature’s already granted us general authority for,” Postman stated the pending request legislation was a necessity (audio - 1m, video). 
    • Shawn DeNae Wagenseller, Washington Bud Company Co-Owner and  Washington Sun and Craft Growers Association (WSCA) Board member, told the board WSCA was “led 100% by licensees” and sought to “protect the interests of sun and craft cannabis growers through the development of rule and law that supports an economically and environmentally sustainable cannabis industry.” She said WSCA members felt the proposed rules represented “a fine set of rulemaking” and approved of how it “moved forward so swiftly,” agreeing that WSLCB needed broader authority over new “compounds that are being made” (audio - 4m, video).
      • Wagenseller called attention to the proposed wording for WAC 314-55-560(3)(a), which read “The board may prohibit the use of any additive, solvent, ingredient or compound in the production of marijuana products that may pose a risk to public health or youth access” based upon:
        • “(i) Verifiable case report data;
        • (ii) Other local, state and federal agency findings, reports, etc.;
        • (iii) A product or substance that is the subject of a recall under WAC 314-55-225;
        • (iv) Any other information sourced and confirmed from reliable
        • entities.“
      • She requested changing “‘the board may prohibit the use’ to ‘the board must prohibit the use’,” feeling that if “there is any question that a compound, an additive, a solvent, an ingredient, may pose a risk to public health, then we believe the board must prohibit its use until there’s no ambiguity of its safety.”
      • Postman replied that he “appreciat[ed] the comments.”
  • The retirement of Board Member Russ Hauge, the launch of the Cannabis Central Reporting System (CCRS), and agency progress on social equity in the cannabis sector were all mentioned during public comments - and elicited responses from the board.
    • Wagenseller spoke briefly on behalf of WSCA members to offer her “sincerest thanks to Russ Hauge for his service on this board,” although he wasn’t present. She applauded his “diligence on tracking down the delta-8 issue,” feeling agency leaders “wouldn’t be as far ahead as we are on that topic” without Hauge’s leadership. Visibly verklempt, Wagenseller said, “it makes me cry to think that he’s leaving” after supporting “small cannabis farmers.” She hoped that the successor to his position “has just as much passion and diligence for rule and law” (audio - 1m, video). 
      • Postman thanked Wagenseller on his colleague’s behalf (“I know Russ will appreciate it”) and assured her they’d convey her gratitude to Hauge (audio - <1m, video). 
    • Chris Bradley, Noble Farms CEO, explained that he was seeking clarification around the CCRS, which began replacing the cannabis traceability system on December 6th. He became a cannabis licensee following “30 years of corporate life” and endeavored to learn more about the industry, acknowledging he was already appreciative of policy history and the “social equity context.” Bradley felt regulators and those in the cannabis sector should see cannabis reform as a “social experiment that we all have a responsibility to try to make successful” (audio - 5m, video). 
      • Bradley noted the "extensive obligations" for licensee compliance could be expensive and onerous, “but they made sense to me.” After almost a decade since voters approved I-502, he felt the industry had “continued to evolve” and that some compliance areas should also change. “We’re no longer questionable criminals,” Bradley argued, believing the plant was “the second most valuable cash crop behind the apple industry.”
      • In thinking about “how to drive efficiencies into the protocols and the data acquisition,” Bradley said “system integrators in the industry” were already “overburdened with compliance requirements and compliance variations" between states. These barriers had a direct impact on “the investment and development of functionality that’s necessary to provide a more efficient and sophisticated software structure to allow us to be more competitive in a tough, tough environment,” he remarked.
      • Calling the CCRS a rapid move “towards a very simplistic system,” he had concerns about meeting “our public safety obligations without” rational “identification of a universal ID implementation.”
      • Bradley added that he would send written comments to the board, and hoped that “someone will respond.” Postman assured him staff would reach out (audio - <1m, video).
      • Bradley previously offered remarks during a May 2020 listen and learn forum on the voluntary compliance program created by SB 5318 in 2019.
    • Gregory Foster, Cannabis Observer Founder, first offered “heartfelt best wishes to board member Russ Hauge,” being appreciative of “his candor and willingness to bring up difficult subjects in public” and “instinctive defense of the most vulnerable among us...we’ll miss him.” Turning his attention to the CCRS, Foster noted that in Postman’s first board caucus as chair on March 16th, staff “presented a roadmap for traceability” that built on the findings of the agency Traceability 2.0 Work Group which Foster participated in. He said staff at that time concluded “that a leap to a different traceability regime couldn’t be accomplished without an interim step to an agency-run reporting system: the CCRS” (audio - 5m, video, written comments) 
      • Foster said a reporting system wasn’t publicly mentioned by WSLCB officials again until Chief Financial Officer Jim Morgan “briefed the board on the CCRS communications plan” on August 11th “without any notice, engagement with, nor input from the cannabis sector. The transition to CCRS was broadcast to your stakeholders in late August, which granted the cannabis sector about four months to prepare.”
      • Foster mentioned that during the switch to traceability vendor MJ Freeway/Akerna in 2017---which “failed to launch” on time---a temporary contingency reporting system had been deployed by the agency, and as “the shortcomings of MJ Freeway became apparent...engagements with your stakeholders helped convince agency staff to freeze development” to maintain “comparative stability.” He told the board that following the promotion of George Williams to Chief Information Officer (CIO), “agency staff have not had the benefit---and challenge---of structured input from stakeholders.” The CCRS communications plan consisted of “broadcast announcements and one-way webinars responding to selected stakeholder questions sent in advance,” Foster alleged, and “the ccrs@lcb.wa.gov email address is handled by the public relations professionals in your Communications division.”
      • While the CCRS had “been envisioned as an interim step,” Foster understood it may be “a final solution.” He asked for more cooperation on “the issues that you and your staff are hearing more and more about.” He advised that Garrett, in considering the future of the Cannabis Advisory Council, think about “a role for members to play in relation to CCRS and/or creation of a technical subcommittee.” Foster further suggested the “internal LCB CCRS Steering Committee could voluntarily offer more transparency into its deliberations, or establish a public working group.”
      • Foster concluded, “if the regulated community is going to have to use the CCRS for the foreseeable future, we must have a means to dialogue with one another in a way that is not prohibitively expensive and exhausting for agency staff...and honors the perspective of licensees who want to operate in compliance without traceability remaining a burden and undue expense.” Lauding the move to a reporting-only model, he believed “cannabis should not be further stigmatized by architectures of real-time surveillance” and asked board members to “hold true to that path together” with the regulated community.
    • David Busby, OpenTHC and WeedTraQR CEO, told the board that the rollout of CCRS “was not the wild success that the LCB claims it was.” He said the end date for MJ Freeway had been repeatedly changed, “a typical pattern for the agency to drop a huge information bomb at the last minute with no possible chance for feedback” (audio - 5m, video).
      • Busby stated that “dozens of bugs” remained in CCRS for weeks without fixes and, even when sending video of the problem, “it was apparently too difficult for agency staff to find.” He shared that the Internet Engineering Task Force had released a standard in 2005 defining comma-separated value (CSV) files, yet he believed WSLCB representatives were “actively ignoring” it and instructing licensees and integrators to “do the thing the wrong way.”
      • Busby felt there was “no effort” from WSLCB staff to address “easy fixes,” asserting that “some of these bugs seem almost designed to give the agency plausible deniability” against future data problems. He further found officials had been defensive, interpreting “technical observations” as “personal attacks” as a way to end discussions without troubleshooting the problems. The responses from the agency didn’t center on solving problems, Busby insisted, but instead on deferral of fixes. “We need to have more certainty in these digital systems,” he added.
      • Other “non-technical” issues were also waiting to be solved, Busby commented, “observed by multiple licensees regardless of software platform.” This included access to CCRS, he said, and “how to complete the manifest webform when using a transportation carrier.” Busby asked for “documentation for these ad hoc workarounds.”
      • His last request was for “clear statements on what a licensee’s contracted agent, their software provider, is allowed to perform on their behalf.” Busby mentioned that some providers had “implemented robust automation solutions,” while “others are claiming that the LCB has stated that is not permitted.” He’d only heard staff say the CCRS “webform manifest was not designed for bulk uploads” and, without automation, “the LCB is making it much more difficult for the licensee to enter data accurately and consistent with their CCRS file uploads.”
    • Peter Manning, Black Excellence in Cannabis (BEC) member, offered his concerns over WA SECTF “and the way it’s going now.” It had been more than two years since passage of HB 2870 created the task force, but he saw “no Black-owned stores” and believed public engagement at WSLCB board meetings was largely “White people com[ing] in and they talk about the issues that they’re having.” Manning felt social equity stakeholders should be invited to talk about topics of concern to them, and he wanted more “color, Black and Brown” at WSLCB events (audio - 4m, video).
      • Claiming that WA SECTF leadership “is not working,” Manning felt some groups were “speaking for the Black community” without a legitimate claim. BEC had been established in 2015, Manning noted, and he’d worked with Garrett and other board members previously. He asked, “can we just make something happen for us as a people?”
      • Since former task force co-chair Paula Sardinas resigned from the task force, Manning said “things have went really bad” and asked the board to contact the group “to see what the problem is.” Even as the WSLCB was “not the proper place to bring this up,” continuing disparities in the cannabis sector provoked him to want the state to “deal with” the problem faster. Manning asked for “the same opportunities that everyone else has,” and for WSLCB leaders to “step in and to look into something” before the industry further “transformed into something that’s totally different.”
      • The ​​December 14th WA SECTF meeting was cancelled. At publication time, the group last met on November 16th.
    • Following the general comment period, board members responded to several of the themes mentioned.
      • Retirement of Russ Hauge (audio - 2m, video). Postman thanked speakers for their warm wishes for Hauge, adding “we also will miss him.” Calling Hauge a “champion” of small business and the “evolution of the 502 system,” Postman said he’d been a “leader in the effort to look at education and consultation before enforcement and prosecution.” Hauge also dove “into the delta-8 question," Postman observed, and felt he’d been “incredibly successful...in helping the agency view this in a certain way.”
      • CCRS (audio - 1m, video). Postman asserted that agency staff were “committed to the transparency that we heard about” and promised to “engage with folks to see if there’s something more that can be done.” He also believed that staff were capable of filtering “some people’s frustration, or even anger” to focus on troubleshooting problems in the system.
      • Social Equity. Garrett, the WSLCB representative appointed to the task force, made clear that the body hadn’t “as a whole" provided any recommendations for the agency to act upon, but she and WSLCB staff were present for every meeting and had an internal work group on social equity at the agency as well. She said agency staff were looking for “things that we can be doing now, or be prepared to do,” contingent on the need for legislative guidance or authorization (audio - 2m, video).
        • Postman emphasized that WSLCB leaders were “not just sitting and waiting." He highlighted more rulemaking coming up in addition to criminal history rule changes adopted on September 1st. Postman said every division at the “agency is really engaged in this" and would act not just on WA SECTF recommendations, but also address “what else can be done...there’s an actual eagerness to do those things.” Postman added that he and the entire board were committed to “make it happen,” explaining that he’d spoken with the WA SECTF chair, Representative Melanie Morgan, a day earlier. He seconded Garrett’s remarks on staff participation in the task force and “won’t even ask people to be patient,” but insisted that things were progressing “as quickly as possible” (audio - 2m, video). 

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