WSLCB - Executive Management Team
(April 13, 2022) - Social Equity

WSLCB Resources for Social Equity Applicants
[ Event Details ]

Legislative, licensing, communications, and director updates contributed to the discussion amongst WSLCB leadership about activity towards social equity in cannabis.

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

My top 3 takeaways:

  • Director of Legislative Relations Chris Thompson mentioned HB 1827, a bill to set up a recurring community reinvestment fund, to indicate that while the legislation wasn’t passed by lawmakers, parts of the bill were “addressed through the budget.”
    • Thompson relayed that the original bill dealt with the subject of “disproportionate impacts from the war on drugs” by providing economic reinvestment in areas damaged through drug prohibition policies (audio - 1m, video).
    • Board Chair David Postman asked how the community reinvestment money allocated in the supplemental operating budget, SB 5693, could be spent by state officials. Thompson explained that “the money was sent over to [the Washington State Office of Financial Management] OFM to make available” through the Washington State Department of Commerce (WA Commerce). That agency, he said, received $1 million in the budget “for developing plans for that” and his impression was that OFM staff would attempt to “utilize existing programs currently until that plan comes together” (audio - 2m, video).
    • Board Member Ollie Garrett asked whether HB 1827 had a different description for the “use of those funds” than the budget. Thompson replied that the budget had been "a little bit less detailed" but the "broad outlines…are the same." One difference was that the budget wasn’t “permanent law,” but rather effective through June 2023. He speculated that “there will be a desire" by lawmakers to return to the subject and pass legislation with a “more permanent statutory structure for this,” but it could also continue to be promulgated through the budget (audio - 2m, video).
      • A visual comparison between the final bill text of HB 1827 and the budget proviso in SB 5693 as passed by the legislature showed several key differences:
        • HB 1827 section 2(1) stated "Expenditures from the account may only be made by the department of commerce," whereas SB 5693 section 947(2) stated expenditures “from the account may be used by the department..."
        • The four focal areas for reinvestment were identical, but SB 5693 added an example in section 947(2)(c): "Community-based violence intervention and prevention services, which may include after-school programs focused on providing education and mentorship to youths..."
        • SB 5693 had no provisions for multiple phases of grant making, starting with existing WA Commerce programs as in HB 1827.  Instead, WA Commerce was budgeted $1 million in fiscal year (FY) 2023 for staff to develop the community reinvestment plan in consultation with the Washington State Office of Equity and "relevant task forces and work groups."
        • In SB 5693, a WA Commerce preliminary report was due December 1st, followed by a final report on June 30th, 2023, the end of FY 2023. HB 1827 included a report on phase 1 spending and the community reinvestment plan which would have been submitted to state lawmakers in December 2023.
        • The total for reinvestment in SB 5693, $200 million, was $75 million higher than envisioned under HB 1827. Along with this boost, more leeway was built in for WA Commerce officials to fund existing programs under a tighter timeline.
    • Postman inquired as to whether there’d be an “opportunity for social equity license applicants to get some assistance through this program” if they were granted a license. Thompson was unsure, feeling it was “a question for Department of Commerce, but I will say there is a requirement for” that agency to do “consultation” on their plan with groups that included the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), where Garrett represented WSLCB. He suggested she could make recommendations to WA SECTF for them to pass on to Commerce representatives, whom he’d heard were interested “in economic development especially.” Economic development of social equity businesses “might be a fit,” Thompson said, but stressed it wasn’t the decision of the board or WSLCB staff. Postman pointed out that the department was also building the mentor roster as part of the social equity technical assistance grant program. Thompson called attention to how the grant program and community reinvestment were “motivated by…the same set of conditions and history” around the uneven application of drug prohibition policies in Washington and nationwide (audio - 4m, video).
    • Thompson went on to speak about SB 5693, noting that social equity grant funding was “almost double” the previous amount, going from $1.6 million annually to $3 million. He said there was a “more modest increase” in money for “a roster of mentors” which would be available for “technical assistance” to equity licensees. The WSLCB budget featured $500,000 “to contract with a third-party” to prioritize applications, Thompson added, along with money for the agency systems modernization project (SMP) and implementation of HB 1859 concerning cannabis laboratory quality standards. He concluded by noting $290,000 for academy training through the Criminal Justice Training Commission for limited-authority law enforcement agencies included WSLCB (audio - 2m, video).
  • Director of Licensing and Regulation Becky Smith talked about staff work on a “draft system” for accepting applications for social equity licenses (expecting it would “be ready to go this fall”) and mentioned local bans/moratoriums.
    • Smith began her briefing by remarking that her division had coordinated with the information technology (IT) department and the Washington State Department of Revenue Business Licensing Service (BLS) on the revised process. She told the group that job postings for a senior Licensing Specialist to conduct investigations for WSLCB and a Social Equity Case Manager had been published and were part of her goal for an autumn application window (audio - 2m, video).
    • Postman asked what the case manager would do. Smith described how the manager would be “building and monitoring, like, relationships with the community members, the social equity applicants, licensees, the task force, local governments, going out there with stakeholders and doing education about what the program’s about.” She considered the role to be an “ombudsman” for her division’s investigators and equity applicants, even other state agencies, throughout an applicant’s licensing process as well as after they received a license (audio - 1m, video).
    • Smith brought up her presentation with Garrett about the equity program to the Seattle City Council Finance and Housing Committee on April 6th. Her impression was that the meeting was “well attended” and had been informative for the members. She stated that the third-party company the agency would contract with to prioritize applications would be decided through a request for proposals (RFP) to be published at the end of the month (audio - 1m, video).
    • Postman was curious when applications could be accepted by the agency, mindful that the board needed to adopt the results of the rulemaking project on the topic. Smith responded that staff were aiming for September and hoped to have a contractor pre-trained on the application process before opening an application window. She added that her office and the Policy and Rules staff would help prospective applicants on what they’d need to prepare ahead of applying. Postman mentioned that a challenge applicants would likely face was “how do you find a place where you can open one of these stores.” Smith commented that some of those rules were likely to change, including no longer needing a location in order to apply. Still, Postman stressed that an equity license was not “a guarantee you'll have a place to open” (audio - 2m, video).
    • Garrett followed up, wanting more details on the process for identifying a business location by equity applicants. Smith said they’d no longer have to list a set address for their business when applying, and would have “no time limit” to get a location once licensed. Applicants could also move anywhere within a county, “so eight people could go into the city of Seattle, or none at all” while control of siting businesses remained in the hands of local authorities (audio - 2m, video).
    • Next, Garrett wanted to understand if there’d been “miscommunication” in previous licensing windows over the requirement to have a secured business address versus having entered a lease. Smith wasn’t certain “how it happened…I can just tell that that wasn’t the case.” She said there’d been instances where landlords promised multiple applicants space if their application was successful, but others saw an address requirement and “jumped to that assumption, that they had to have a lease.” Smith found this fact underscored the need for preemptive education on the equity application system (audio - 2m, video).
    • Smith mentioned that staff had “a reach out from Okanogan County," where officials had “recently put a moratorium on all new producers and expansions” as they reviewed existing licensed producers. The officials wanted to ensure “their list matched our list, and then for those folks who aren’t operating with a license, they’re going to go in and take action.” She stated that the Education and Enforcement division would be assisting the county in action against any “illicit grows” (audio - 2m, video).
    • Smith’s final update was that a second cannabis research license had been approved by her staff and other agencies, “a huge process.” She further noted improvement in the packaging process at WSLCB where several forms were combined into “a one-pager” rather than several documents. Postman thanked her staff for doing “a lot of heavy lifting” (audio - 1m, video).
      • At a WA SECTF work group meeting on February 10th, Jim Makoso, Flowe Technology CEO, Lucid Lab Group Director, and task force appointee, reported having obtained a processor license “primarily just to do research” and that he was in the “final stages of getting our research license just to make a statement of how difficult it is to get a license to do research.” He was eager to partner with academic researchers and companies “interested in some of the data that we’re starting to create.” Makoso subsequently confirmed he'd been granted a research license.
  • Director of Communications Brian Smith and the director’s office mentioned social equity and anti-racism efforts at WSLCB as well as retail robberies and the 2021 Healthy Youth Survey (HYS).
    • Smith indicated there continued to be a high volume of media contacts about retail robberies, along with additional inquiries around “synthetically-derived cannabinoids" and the equity program at WSLCB (audio - 4m, video).
    • Deputy Director Toni Hood described how the agency would implement Executive Order 22-04 on a Washington State Pro-Equity Anti-Racism (PEAR) Plan and Playbook. She said the order outlined an expectation for the agency to develop “a PEAR team” which would have an EMT member, staff, “external stakeholders,” and be led by Diversity, Equity, and Inclusion Manager Jim Weatherly. Hood planned to finalize a “team roster by the end of the month” who would report to WSLCB leadership on the creation of a PEAR plan. She indicated that they expected to receive “templates and other guidance” from the Office of Equity soon (audio - 4m, video). 
      • Referencing the SMP, Hood said an “organizational change management firm,” Liberum, had been hired and would begin the following week. An RFP would be published in the near future and the next step would be approval for release of initial project funding by the Washington State Office of the Chief Information Officer (WA OCIO).
    • Garza stated his intention to have Weatherly come to future EMT meetings to provide the board with “information of the work that we’re doing as an agency” on equity and inclusion. Postman welcomed the addition. Garza then mentioned the Seattle Times article, encouraging the board to review it. He suggested Public Health Education Liaison Mary Segawa may want to brief them on the “bizarre” 2021 HYS survey results which suggested “almost a 50% drop in drug use” compared to the prior survey, but overdose “deaths among youth skyrocketing,” largely attributable to the opioid Fentanyl (audio - 2m, video).

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