WSLCB - Executive Management Team
(October 13, 2021) - Agency Policy Work Group

Staff described the impact the internal Agency Policy Work Group was having on policy and interpretive statements, agency request legislation, and rulemaking at WSLCB.

Here are some observations from the Wednesday October 13th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 3 takeaways:

• Policy and Rules Manager Kathy Hoffman discussed the Agency Policy Work Group, which provides internal analysis on WSLCB leadership priorities like transitioning away from board interim policies and fostering "socially equitable conditions" (audio - 10m, video, presentation). 
  • Hoffman began the conversation with a history of the work group which began in February 2020 shortly before the coronavirus pandemic led to remote working and temporary allowance guidance for licensees.
    • The group had daily meetings at this time “to discuss agency response to requests for assistance,” she said, tracking decisions in a “COVID-19 spreadsheet.” Temporary allowances were studied by Enforcement and Licensing staff “from May to October of 2020,” with Hoffman and Assistant Attorney General Bruce Turcott doing “statutory and regulatory authority analysis to determine whether” WSLCB officials had the power “to move those allowances forward.”
    • Using a “COVID-19 workbook,” Hoffman described how allowances had been ranked based on request frequency. A “sub-group” reviewed each allowance “but we needed tools to do that analysis,” she stated, which led to the development of several policy documents:
      • WSLCB Policy Analytical Framework
      • Using Evaluation to Inform WSLCB’s Policy Process
      • WSLCB Policy Process - Based on the U.S. Centers for Disease Control and Prevention (CDC) policy process of:
        • I. Problem Identification
        • II. Policy Analysis
        • III. Strategy and Policy Development
        • IV. Policy Enactment
        • V. Policy Implementation
        • “And then evaluating the policy as it moves forward along with continuous stakeholder engagement throughout.”
    • These documents guided both “initial allowance analysis” and established a “foundation for the policy and interpretive statement program and our agency policy work,” said Hoffman. This process also informed agency request legislation in 2021; a 2021 Draft Policy Agenda and Policy Development Strategic Plan; and the Agency Policy Work Group itself, which used a “think tank approach,” she added.
  • Hoffman reported that the work group “issued three interpretive statements” as well as “five policy statements.” Topics she noted had been analyzed included:
    • “Alcohol service by fast food chains”
    • “Failure limits on marijuana infused edibles”
    • “Delta-8/Delta-9[-tetrahydrocannabinol] THC and beyond”
    • “Multiple policy implications that come up as a result of many rule petitions that we receive”
    • “Joints for Jabs”
  • The work group was in the process of drafting policy statements to replace board interim policies (BIPs), Hoffman remarked, noting that one BIP on cannabidiol (CBD) additives exempted them from being reported in traceability even though there was a “rule that says that licensees must do that.”
  • Hoffman said the work group would help “grow the capacity” of the rules team, “increase stakeholder participation in the policy review process,” and “continue to honor our think…tank model in new ways.” They would also look at prioritizing creation of "socially equitable conditions," she remarked, using metrics such as:
    • “Diversity, equity, and inclusion” (DEI)
    • “The lens of public health”
    • “Prevention”
    • “Different divisions” at WSLCB
    • “Reach out to local government if necessary”
  • In the future, the “big steps” predicted by Hoffman were “beginning to accept external requests” and “expand[ing] the scope of draft policy review.” Though the work group had limited its engagement to other state agencies, she talked about greater inclusion of “local government” or public advisory bodies like the WSLCB Cannabis Advisory Council (CAC).

• Director of Policy and External Affairs Justin Nordhorn briefed on how the Agency Policy Work Group had impacted WSLCB policy and rulemaking processes, expounding upon ways external recommendations from stakeholders could influence agency perspectives (audio - 10m, video). 
  • Nordhorn discussed the impact the work group had when listening to ideas from industry members and providing “external reviews for those requests for those interpretive/policy statements.” He mentioned that an external request had come into the work group and they were weighing whether it should be an interpretive or a policy statement, or even a rulemaking or legislative change.
    • Norhorn observed that interpretive statements were more about an agency “position” on existing law or rule, while policy statements tended to generate more stakeholder outreach.
    • Using the Quality Control (QC) Testing and Product Requirements rulemaking project as an example, Nordhorn said work group members would benefit from feedback from a listen and learn forum scheduled for the following week to help analyze the “very complicated area” of rule.
    • Other issues he expected to come before the group included the “[HB] 1480 ruleset for implementation” as well as an “adjudications request from staff and the board on how we can handle electronic filings” which would impact the agency and licensees.
    • Nordhorn mentioned “a very large project" that involved “the full vetting of [WAC] 314” would likely take years to eventually “restructure” the rules to “clean up” and regroup topics. He anticipated this would lead to “modifications, some rule repeals” and other revisions.
    • Nordhorn also predicted that in “the near future” that packaging and labeling for cannabis and the hiring of additional Policy and Rules Coordinators would also receive input from the work group.
  • As for the rulemaking requests agency staff had been receiving, Nordhorn said development of a “prioritization matrix that can be visible” to staff for scoring them was underway. Such scoring might prioritize legislative mandates over other requests, he mentioned, and would evaluate “risk impacts, how far outreaching is this…does it impact a breadth of licensees or is this just…an isolated area?” 
    • Nordhorn noted the intent was to analyze those issues against the agency's strategic plan and board priorities. He told board members that information gathering for rulemaking projects required significant staff time and hoped there was recognition of “the complexity of some of these areas” as people requested rulemaking. He indicated “exploratory conversations” might take place between licensees or their representatives and work group members to “learn from one another” without resulting in compliance directives from WSLCB officials.
    • Nordhorn said the development of metrics was a continuing issue along with “how to assess the results” of actions or statements. He reported what they’d developed so far would be included in the 2021 annual report for the agency to “create that broader understanding” about their policy development and analysis. While some materials produced by the Agency Policy Work Group were long and “very technical,” Nordhorn expected in a decade, “when other folks are in these positions and they look back,” the motives and intent of the board and WSLCB leaders would be “documented in a very broad and in-depth manner.”
  • Board Chair David Postman asked if the “majority of the rulemaking that the agency does is legislatively mandated” (audio - 3m, video).
    • Nordhorn thought that it varied “year-to-year,” but he’d seen “a lot of internal requests” for rule changes. Suspecting that “the bulk is actually from outside of the legislative process,” he explained that a routine question staff asked was “can this be done by rule,” in which case staff would look to have the board take action rather than approach legislators to change the law.
    • Hoffman clarified that when staff considered the rulemaking process, they were mindful “about doing that right before the legislative session because we need to be queued, we need to have rules coordinators ready to go” in the event legislation mandated rulemaking. She further said the Policy Development Strategic Plan would be used to “make an assessment of where a particular project might fall.”
  • Postman stated that the Agency Policy Work Group hosted “really valuable…debates and discussions” for agency leaders, and the analysis the group produced was “understandable” and contained “valuable information.” Hoffman replied that it was a conscious choice to “memorialize agency thinking at that moment in time” (audio - 2m, video). 

• Director Rick Garza provided brief commentary on the Agency Policy Work Group’s role in centralizing decision making by agency leaders on topics such as temporary allowances for licensees or consistent enforcement practices (audio - 2m, video). 
  • Garza lauded the presentations of Hoffman and Nordhorn. Hearkening back to the beginning of the pandemic in March 2020 when the group was established, he recalled they “had to figure out how to accommodate the many, many requests that came” into the agency.
  • He explained that “a central place where [WSLCB leaders] make decisions” had been a request of stakeholders, staff, and the Hillard Heintze independent review of agency enforcement practices in December 2019. Even as the board had the final say, Garza relayed the impression of many that various offices within the agency were making decisions “without talking to one another.” The work group was changing that impression, he believed, and the “comprehensive” program outlined by Hoffman and Nordhorn was eliminating the complaint he’d heard that rules were “arbitrary and capricious.” Garza credited “direct communication” through events like the listen and learn forums for making a difference.

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