WSLCB - Board Meeting
(July 6, 2022) - Social Equity

Social Equity Cannabis Licenses Delayed - Washington - Illinois - Connecticut - Arizona
[ Event Details ]

Members approved a rule change normalizing use of the word ‘cannabis’ and heard criticism of the hold on the social equity rulemaking project leading to a lengthy explanation for the pause.

Here are some observations from the Wednesday July 6th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

  • Three public commenters highlighted continued delays in social equity rulemaking as they had expected formal action would resume at the meeting.
    • The Social Equity Rulemaking Project was withdrawn on May 11th, less than a month after the CR-102 was approved, after opening the project on April 13th. The withdrawal was intended to give staff more time to fine tune the proposal, WSLCB officials subsequently claimed.
    • At a Washington CannaBusiness Association (WACA) spring meeting on June 15th, Postman and offered his insights on the project’s pause and Mike Asai, Emerald City Collective Gardens (ECCG) Co-Founder, asked Policy and Rules Manager Kathy Hoffman for an estimated timeframe for proposed rules to become public. At that time, she expected to present the board with an opportunity to refile the CR-102 on July 6th.
      • Days later, at the June 21st board caucus, Hoffman forecast a revised CR-102 could be ready for “either the first or second board meeting in July.”
    • Peter Manning, Black Excellence in Cannabis (BEC) member (audio - 3m, video)
      • Manning had anticipated “that we were going to have the rules for the social equity,” saying “for two years I fought to make this happen” and that “to this day, right now, we still have less than one percent of Black or Brown [people] in the cannabis industry.” He further felt that in conversations about hemp products and regulating cannabinoids, “Black people are still not included in any of this type of conversation.”
      • Finding progress on equity among license holders to be stalled, he called on the board to "stop with the procrastination" because too many current licensees “are getting a stronger and stronger foothold in this industry that are not Black or Brown, that’s going to put us at a greater disadvantage." Manning asserted that “study time is over" because "it seems sad that every time something is done wrong to us as a people there’s got to be a study session" instead of a collective push for “solution to our problems.” He didn’t want “to point any finger at any particular groups” but noted there had been “White groups" in the legal cannabis sector “since its onset.” They had been generating wealth while BEC members didn’t “have any capital, we spen[t] money out of our own pockets to come up here and tell you guys that we are fighting for Black and Brown inclusion.”
      • Manning said "today is a day that we should be celebrating" agency progress on social equity and he hoped the board would offer a “path for the Black and Brown inclusion.” Instead, “I haven’t heard one word mention of it here,” so he asked the board to “get going, let's make something happen, please."
      • Manning previously offered public comment on equity licensure to the board on June 8th and on June 22nd, and attended the WACA Spring Meeting.
    • Mike Asai (audio - 5m, video)
      • Like Manning, Asai had anticipated learning about progress on the rulemaking project, noting it had been “two years” since the agency had an equity retail licensing program approved by lawmakers, and six years since his collective had closed. He found the process unjust because ECCG had secured a city business license, “paid taxes, did all the right things.” Asai remarked his medical dispensary had been “ahead of the curve” in testing their cannabis “for pesticides, we tested for molds…over ten years ago.”
      • “It pains me to state this today, because I had high hopes for” WA SECTF, said Asai, but he’d come to believe there were “several members not for social equity at all” as well as “manipulation from the task force members and other groups claiming to be for social equity.” Alleging these parties had “other intentions for themselves, and not the community as a whole” he blamed these groups for “causing delays and giving LCB recommendations not equal to concerns brought forth in the beginning of the social equity task force meetings." Asai credited Board Member Ollie Garrett, the WSLCB appointee, as having “been wonderful throughout this social equity process." 
      • Asai suggested that community members wanted “a percentage of the social equity licenses to go towards the Black and the Brown community” with former dispensary owners like himself “who were Black and Brown…they should be top of the list.” Next, retail title certificate holders “that are Black or Brown, they should be second,” he argued, followed by “your general social equity applicant.” 
      • Referencing February 2020 testimony by Director Rick Garza who said Initiative 502 “missed an opportunity to incorporate a focus on social equity, the history of cannabis prohibition shows abundant evidence there was disproportionate harm in communities of color,” Asai requested the board “do the right thing for the community.”
    • Ahmed King, BEC Executive Secretary (audio - 4m, video)
      • Echoing the prior speakers in his disappointment that there’d been no action on the equity rulemaking project, King commented that “Black people in this country” had been “disproportionately impacted by many social injustices" and that if “less than one percent” of licensees were African American, then “the farther back…we fall behind.”
      • King introduced “Papa John” as “an elder, he is a father" who had “an impeccable resume” which included “no criminal record” at age 83. He had applied for a cannabis license and “over a mishap, I guess, with paperwork or whatever, his license and store was pulled back.” With all the changes “that should be on the table…why is it taking so long for someone like him to get his dispensary back?” Manning’s comment about there always being “a study" before rectifying an injustice resonated with King, who suggested that the board should “honor someone like Papa John, honor someone who was a pillar in the community” and only wanted to build something that he could pass to his “children, and his children’s children.”
      • Hoping agency leaders would be “solution-based” in their approach to equity concerns, King noted that taking more time put social equity licensees further behind an established retail market, something that could be “quantified…in real money” lost by would-be licensees, “the same way everything else is quantified when it comes to a study of us.” In his estimation, “some people within this political organization really don’t care” about cannabis sector equity, and he called on the board to act immediately.
    • Christopher King and Kevin Shelton signed in to speak but were unavailable when called upon. King and Shelton had previously shared concerns about bias in licensing and cannabis equity, most recently on June 22nd and April 27th, respectively.
    • Michael Check signed up to speak in person, but chose not to when called on.
  • Board Chair David Postman talked about “the timing” of social equity work and rulemaking by agency staff, indicating the delay enabled agency officials to “make it better" (audio - 9m, video).
    • Postman established that he “didn't have this date…in my head” as a deadline for social equity rulemaking, and promised when the project was presented for approval nobody would “be surprised.”
    • His view of how the board had arrived at this point in developing equity policy was that there’d been a “rule package to address this, and we were ready to approve it, and I thought it was pretty good.” Had the board done so, Postman’s belief was that the rule “would be final” by this point, and agency representatives “would be ahead of where we are today” in preparing for an equity retail application window.
    • The reason this hadn’t occurred, he told attendees, was because “people within the LCB continued to talk to people outside the LCB, including some of the…people who we hear from” in the community, and continued to review what “other states are doing.” The consensus had been that staff wanted to “take another look for one reason: ‘cause we didn’t have the highest level of confidence that it would achieve what we want it to,” which was to “get these licenses in the hands of the people…who deserve them.” He felt the board members and commenters “agree on that goal.”
    • Insisting the pause in the project was not another study, Postman stated that the board knew there’d been “a lot of time” vetting the proposal with staff, external stakeholders, and legislators. WSLCB leaders "certainly talked to lawyers about it" in order to find "something that's legally sustainable." Any delay in the rulemaking project was driven by "self-reflection" and "self-critique," he said, and members wanted to “be darn sure before we take this out” that the board had done “everything we can do.”
    • Referring to the WSLCB response to the WA SECTF recommended scoring rubric published in January, Postman called it a “list of things applicants would get points for” and indicated staff had deliberated over “what’s on it, what’s not on it, what could we add to it, what’ll lawyers think” as well as the impacts on “the people who are waiting for this.” He promised they were “close" to an outcome and, while "we're not studying it," he described how regulators continued "thinking, we’re debating, we’re discussing, we’re crafting, we’re trying to figure out how you say it exactly." Postman felt that overall criticism of the slowness to pursue equitable licensing in cannabis was valid, but he didn’t perceive the holdup was due to “fighting and not working together, in fact” some of the discussions agency representatives were engaged with “came from some of you who have talked to us on a regular basis…and we’re looking at those things, really hard.”
    • Postman forecast the return of the rulemaking project “very soon” and that officials had considered hosting a special meeting for the board to hear from “an expert on the constitutionality of some of these clauses” who could “review” their proposal. He shared the attitude of the board to get “our part of this done by the end of the month” though approval to restart the project could come “the first week in August.” In all, Postman guessed their work was “a month behind where we thought we were going to be six months ago” and that the application window was likely to open in “the fall…maybe late fall, maybe winter.”
    • Summing up the delay as reflective of an effort to “make it better," Postman commented that there was a need to demonstrate to lawmakers that there could be a “meaningful, legally sustainable, equitable program, because that’s what we want to do.” With a goal to make a process that can "sustain legal challenge or maybe avoid legal challenge," he emphasized, “we need it to work.” Postman knew that staff had talked about the hold on the project “in bits and pieces,” and hoped his clarification was comprehensive and understandable.

Information Set