WSLCB - Board Caucus
(February 15, 2022) - Legislative Affairs Update

HB 1668 - Misinformation
[ Event Details ]

Director of Legislative Relations Chris Thompson described the status of cannabis-related bills, and the potential that cannabinoid request legislation would fail in part due to “misinformation.”

Here are some observations from the Tuesday February 15th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 4 takeaways:

  • HB 1668, the request bill intended to increase agency authority to regulate cannabinoids, was discussed at length by board members and staff who described “hostile” amendments and disinformation sown along its path to becoming law.
    • On the cusp of the house of origin cutoff later that day, Thompson admitted to "saving the best for last": the WSLCB cannabinoid regulation bill recommended by WA House APP on February 7th and pulled by the chamber on February 11th - but “sitting on the [WA House] floor calendar” since then (audio - 3m, video).
      • Although 30 proposals were listed, he explained that the bill “has 15 amendments on it” as most had “two versions,” one for the substitute bill and another for the second substitute. Thompson found a “couple of ‘em” were “potentially friendly amendments” that the agency could agree to, but "most of them [were] not, most of them are hostile amendments that present any number of problems."
      • Thompson promised staff were working “to determine...is there a will" among WA House leadership to take up a “substantive bill in the face of these amendments and try and get it out of the house by five o’clock today.” He noted lawmakers could take up “one last bill at just before five” and continue debate as long “as it takes.”
      • His impression was that “there's some pretty hard feelings" in the chamber about “filibustering legislation last night” by the minority Republican Caucus, which would “color how they think of any bill that might burn a lot of floor time today.”
    • Postman was grateful for the lobbying of Thompson and HB 1668 sponsor Representative Shelly Kloba, but evinced disappointment that the bill hadn’t already been taken up on the floor (audio - 3m, video).
      • Given amendments from legislators “not trying to perfect the bill,” progress would be “problematic,” he said. Postman noted “law enforcement supports this bill, public health supports this bill, huge chunks of the industry that we regulate support this bill. Is that not going to help?”
      • “What’s at stake, really,” Postman alleged, was the ability of regulators to stop “infiltration…of these derivatives outside of the regulated” cannabis sector, something they’d heard was necessary “from every corner of the industry…really, since the day I got here.” He then bluntly asked, “how can that die?" 
      • Board Member Ollie Garrett asked what the board could do to improve the bill’s odds for advancement. Thompson said it was a “big question” and staff were “looking into whether there is,” but it remained “a question of will" by lawmakers. WA House leaders could get the bill through, he believed, but only at the expense of other bills.
    • Postman brought up a “misinformation campaign” against the bill, saying legislators were hearing about “a drop in cannabis revenues” as proof that regulators “weren’t doing their job” (audio - 5m, video).
      • He asserted that the “numbers just are not right…they take a small snapshot, in some cases it’s just wrong, some cases it’s exaggerated.” He said a “small dip in revenues that we’re seeing” was only in relation to the year before, when there was “an extraordinary spike, brought on by both the pandemic” and “people having extra spending money.” He emphasized the sector was “25% above where we were two years ago.”
        • Legislators received an email opposing HB 1668 from Brooke Davies, Washington CannaBusiness Association (WACA) Deputy Director, which declared an 8% decline in Washington cannabis sales year-over-year (YOY) based on information collected by Headset, a cannabis data analysis firm. The information included five high-level statistics for 11 of 13 states with adult use cannabis sales, excluding Maine and Alaska.
      • Garrett asked about their response and Postman replied that Thompson had forwarded some information “to the chair.” After speaking with Chief Financial Officer (CFO) Jim Morgan, he believed “what [lawmakers were] told is just not true” and the “underlying analysis” built from the cited data “is false.” He remarked that the Washington State Economic and Revenue Forecast Council (WA ERFC) “predicted a dip” in their November 2021 revenue review of cannabis taxes (see page 18) and “we’re ahead of that forecast.” Postman said he’d heard from Morgan that January cannabis revenue was “1.4% less than they were last year. But last year they were up 20% over the year before.” He suggested the state’s market was also being compared to California, with an adult-use cannabis market he termed “brand new” and in a stage where revenue was “go[ing] from nothing to huge.”
      • Postman also said that “statistics show that we have a more diverse set of products available…than in some of these other states.” He alleged “bigger businesses…want to dominate” and he expected their representatives would argue that a diversity of products from many companies was “a bad thing.” He was confident that the sector had been managed by WSLCB as voters, lawmakers, and the Governor’s office intended, allowing for a range of cannabis business sizes and structures. His sense that this was being used as “a sign that we need to stop this regulatory move is obviously bothering me,” Postman observed. Thompson concurred that there was “a lot of misinformation out there right now.”
      • Another email opposing HB 1668 was sent by Rebecca Burghardi, Northwest Cannabis Solutions Vice President of Compliance and Packaging and WACA Board of Trustees President, which presented several arguments against the bill:
        • “[L]eaves the definition of ‘impairing’ to be extremely broad and makes minor cannabinoids seem more harmful than they are… It dismisses the fact that most consumers seeking out minor cannabinoids…are not looking to get high, rather they are attempting to aid sleep, relieve PTSD, enhance their mood, etc.”
        • “It would take a minimum of 18 months for the LCB to complete the rulemaking, a timeline that we know could be extended.”
        • Would allegedly place the state market “behind the rest of the country, pigeonholing WA to be at a disadvantage when federal legalization and interstate commerce inevitably pass.”
    • Garrett wanted legislators to hear “everything that you’re saying, right now” and have their perspective reach “the top of the thinking process to wherever this bill is sitting” (audio - 7m, video).
      • Thompson said it was a matter of responding to misinformation like that identified by Postman, in addition to “a claim that it takes us 18 months to do any rules, that’s flat false.” Incorrect information was “being twisted further to spin this narrative” against the legislation, he argued.
      • “Avenues open to us at this point in the process are extremely limited," Thompson admitted. Representatives were either “on the floor” or caucusing in private “basically all day,” he said, making texting their only option for engaging legislators. Kloba was “a champion on this" and had been “very responsive to us,” he commented, but it was “much more difficult” for anyone to influence the leadership in the chamber.
      • Thompson explained that they had reached out to stakeholders and “they are sending messages to key members.” This effort included medical cannabis patients, law enforcement, public health, “industry that supports us…and nobody knows whether any of it is going to make any difference.”
      • Postman agreed with Thompson but said, “we’re really close, there was growing support” and legislators needed to be told when arguments against the legislation were “demonstrably false.” He was grateful to Morgan for tracking and responding to concerns in more detail, but wanted legislators to understand that “if this bill doesn’t pass, what we lose is the ability to stop the public health crisis growing with these unregulated products…everybody agrees with us about that." Postman sounded shocked that elected officials would fail to act because of “what is essentially an internecine battle in the industry over hemp-derived [tetrahydrocannabinol], and let these stores keep selling this phony stuff,” calling the situation “really outrageous.”
      • As staff were “staring into the abyss," Thompson said he could draft a message for all WA House members to make clear “if this bill dies, here’s what we’re looking at…if this bill, as we’ve requested it, passes…here’s what we…can see as the consequences of that.” Garrett wholeheartedly agreed, wanting to reach out to lawmakers since “sometimes, the last thing a person hears is what sticks the most." Postman insisted that “we’ve been doing it,” crediting Thompson and other staff, but agreed to a last attempt at offering comment on the proposal. He was grateful to the stakeholders who had stayed engaged, advising that while “not everybody in this industry gives us that courtesy, let’s include the cannabis trade associations…and make sure they see our message today, too…we're not saying anything secret."
    • Thompson added that WSLCB officials had provided “our take on all 15 of those amendments” and remained hopeful that, “at some level, the policy still matters, and it isn’t just optics, and how this feels, and which lobbyist is for it, or against it.” He felt the “self-interest underlying” misinformation on the legislation “is really hard to combat,” citing the adage that “a falsehood is halfway around the world before the truth has got boots on.” In the end, Thompson felt staff could only “do what we can do” to provide honest information to policymakers - “and that’s it”  (audio - 1m, video).
    • Postman closed the discussion by pointing out that “some of these amendments…designed to drag this down…cannabis lobbyists are involved in,” but WSLCB leadership operated “in the public realm" and their staff knew “what we’re up against.” He thanked Thompson, and promised to send notes on his final communication to representatives about HB 1668 (audio - 1m, video).
  • The house of origin deadline passed later that day without representatives taking up debate on HB 1668, leaving few avenues for the statutory changes requested by agency leaders.

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