WA House COG - Committee Meeting
(November 30, 2022) - WA SECTF Update

A WA SECTF panel provided the committee an explanation of how they reached their final recommendations for social equity in cannabis before describing them and taking questions.

Here are some observations from the Wednesday November 30th Washington State House Commerce and Gaming Committee (WA House COG) Committee Meeting.

My top 3 takeaways:

• A Co-Chair, member, and staff of the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF) were greeted by WA House COG Chair Shelly Kloba, who was “excited to hear” what the group would advise.
  • WA House COG previously hosted a work session on WA SECTF in November 2021.
  • Welcoming the panel with thanks “on behalf of the whole committee for the work that you have been doing over these several years,” Kloba identified the panelists (audio - 1m, video):
    • Jim Makoso, WA SECTF Co-Chair and “also Director of Lucid Lab Group”
    • Micah Sherman, “the co-owner of Raven” as well as a task force member 
    • Anzhane Slaughter, “Project Manager” for WA SECTF from the Washington State Board of Health (SBOH), to assist in facilitating the presentation
  • Makoso thanked Kloba, describing himself as the “the community co-chair of the task force in conjunction with my legislative co-chair, Senator Rebecca Saldaña.” Appreciative of the opportunity, he said he was the “owner and operator of a cannabis processor here in Washington and cannabis…research licensed holder here in Washington, as well” (audio - 1m, video).
  • Sherman acknowledged his work as a producer “licensee in the Olympia area” and as a “co-lead for a couple of our work groups” on WA SECTF (audio - <1m, video).

• WA SECTF representatives went over the task force membership, process, and recommendations ahead of releasing their final report due to legislators and the Washington State Liquor and Cannabis Board (WSLCB) the following month.
  • An initial round of recommendations were released by the task force in January, and recommendations for their final report were reviewed on October 26th.
  • Makoso began with an overview of the “task force structure” legislatively mandated in 2020 before addressing their recommendations (audio - 6m, video, presentation).
    • He showed a slide with the committee members listed, stating “the goal was to address social equity considerations in the cannabis industry in a comprehensive manner and really with…a statutory requirement to make recommendations on eight specific policy topics.” WA SECTF was composed of “a diverse group of legislators, agency representatives, community representatives, and business owners,” Makoso remarked, thankful to “all our members, former and current, for contributing their time, and their effort, and their energy.”
      • The Association of Washington Cities (AWC) had no appointee listed, though WA SECTF was mandated to include their designee on the task force. The last appointee, AWC Government Relations Advocate Sharon Swanson, only participated in the January 24th meeting. She replaced City of Seattle official Cherie MacLeod, who had represented AWC since the first meeting in 2020. 
    • “As you may or may not know, some of these topics can be quite contentious,” Makoso commented, but WA SECTF would nonetheless meet a required deadline to deliver a final report on the topics to lawmakers and leaders of relevant agencies by December 9th. He went over the process by which task force work groups were created, evaluated topics, and made suggestions which the full task force voted on after discussion and amending. Makoso felt this allowed the task force “to really think about social equity…and the impacts” the War on Drugs “had on Black and Brown communities, and to come up with recommendations…address[ing] those harms that have been caused,” offering options “to address these…harms in a more comprehensive way.” Calling their method an inclusive, “community-based approach,” he felt it provided for “people with different viewpoints to really opine on our policy topic, and some of the recommendations that we made.” Makoso reported that “dissenting opinions” were heard on many issues, and hearing from “people that maybe didn't agree with some of…the topics that we were trying to address was important in helping us really get a full…viewpoint on addressing these topics and then coming up with recommendations.”
    • Makoso recognized that “most recommendations did not receive unanimous support from our membership, and so our recommendations are really a consensus of support from our task force members.” He shared key definitions group members were encouraged to embrace while doing their work:
      • “Social Equity: Developing, strengthening, and supporting policies that distribute and prioritize resources to Black and Brown communities that have been historically marginalized. By advancing these policies, we can begin to repair the harms that have been caused in these communities.
      • Social Equity in Cannabis: The intentional inclusion of Black and Brown communities that have been disproportionately harmed by the ‘war on drugs’ into the cannabis industry in a way that creates social and economic justice.”
    • Saying the “war on drug policies specifically target[ed] communities” that often “tended to be Black and Brown communities,” Makoso explained how WA SECTF recommendations had been arranged into “four pillars”:
      • Access
      • Industry Support
      • Community Investment
      • Opportunity
  • Sherman delved deeper into their specific recommendation topics and findings, starting by pointing out the “scope of the task force involved both ongoing work that the Liquor Control Board was doing as part of the legislation that created the task force” in addition to “recommendations that are targeted towards legislative action that were requested as a part of creating the task force” (audio - 8m, video).
  • Recommendations to WSLCB:
    • “Use the Task Force’s ranking formula and indicators for disproportionately impacted areas (DIA) in conjunction with the Community Based Scoring Rubric when awarding social equity licenses.”
      • Sherman related this to the implementation of an equity program at WSLCB, saying that WA SECTF gave WSLCB officials input on a scoring rubric “to prioritize [equity license applicants] based on the principles of social equity.” He stated the formula was “fairly complicated” and “slightly different from what the LCB is moving forward with in their recently done rules,” adding that WA SECTF feedback was incorporated into social equity request legislation from WSLCB for the 2023 legislative session.
        • During the 2022 session, a bill to place prior WA SECTF recommendations in statute was sponsored, but not advanced by lawmakers.
      • Find out more about DIAs and the development of the rubric in the WA SECTF Disproportionately Impacted Communities Work Group.
    • “Re-evaluate applicant criminal history restrictions related to licensure.”
      • WSLCB leaders had “already taken action on [this recommendation] in a previous rule set,” Sherman said.
  • Recommendations to the Washington State Legislature (WA Legislature) related to access:
    • “Focus on policies to expand cannabis licensure opportunities for social equity applicants. Increase the number of current licenses and create new license types reserved for social equity applicants.”
      • Licensure should stay limited to equity applicants “for a period of time to allow those equity businesses to establish themselves prior to releasing more” through “general licensure,” Sherman told the committee.
      • Learn more about how the group decided additional licenses were warranted from the WA SECTF Licensing Work Group.
    • “Ensure that all licenses available for social equity retail licenses are not bound by county and can be used statewide in any county, contingent on local jurisdiction approval.”
      • Sherman talked about how this “would be very helpful to both the issuance, and the success of these equity retail licenses that they be able to be sited anywhere in the state upon their issuance,” as task force members believed this would “make [equity licenses] a lot more flexible and beneficial.”
      • The board created one-time “portability” of equity licenses within a county in rulemaking adopted on October 12th.
    • “Consider creating new license types accessible initially to social equity applicants exclusively.”
      • While referenced in the first recommendation, Sherman stressed the “tremendous benefit to being sort of first to market…and allowing a period of time for that to happen in this program with new license types would be beneficial to the licenses and the program.”
  • Recommendations to WA Legislature related to industry support:
    • “Expand the scope of the Technical Assistance and Mentorship Program to include financial assistance for social equity applicants.
    • Create a professional development and workforce training program to support social equity applicants.”
      • Sherman remarked that one way “we specifically support those licenses’ success [is] through technical assistance and mentorship.” He conveyed the WA SECTF suggestion that money initially invested in that program should be sustained and increased to “expand and improve those programs both with…professional development and workforce training.”
      • Read more about recommendations from the WA SECTF Technical Assistance and Mentorship Work Group.
  • Recommendations to WA Legislature related to community investment:
    • “Create a community reinvestment fund from cannabis tax revenue to support communities harmed by the ‘war on drugs’.”
      • Not wanting “attempts of social equity to be limited just to the cannabis industry,” task force members believed in “taking money from the [cannabis excise] tax revenue and putting it into remedying those harms,” said Sherman.
      • The 2022 supplemental budget featured a one-time $200 million allocation for reinvestment in community organizations, and Section 128(134) in the budget allotted $1 million dollars for fiscal year 2023 “solely for the department to develop a community reinvestment plan to guide the distribution of grants from the community reinvestment account created in section 947 of this act.” The appropriation ended with a requirement that Washington State Department of Commerce (WA Commerce) representatives draft “a preliminary report to the governor and relevant committees of the legislature by December 1, 2022” in addition to a “final report on the implementation plan…by June 30, 2023.”
        • At publication time, the WA Commerce preliminary report had not been distributed among the reports to the legislature.
      • Check out input on the topic from the WA SECTF Community Reinvestment Work Group.
  • Recommendations to WA Legislature related to opportunity:
    • “Re-evaluate regulatory oversight of cannabis production.”
      • Sherman described how WA SECTF was requested “to weigh in on” assigning the Washington State Department of Agriculture (WSDA) more of a role “in the regulation of cannabis and what kind of impacts would that have…on equity.” He said the group did “recommend that that be explored and that there are potential benefits” to licensees since WSDA was already engaged in implementing the Healthy Environment for All Act (HEAL Act) that Sherman called good for “social equity but there's also benefits to the general equity of the cannabis industry.” The task force hoped lawmakers would look into it further.
      • See the debates on this topic from the WA SECTF Production Work Group.
    • “Legalize residential cannabis cultivation.”
      • The task force members were asked “would there be an equity component to allowing home grow” of cannabis,” stated Sherman. He noted, “there was a great work group on that topic” where data was presented that indicated “a disproportionate effect on plant arrests in Washington state that is tied to race.” They’d concluded “allowing a small number of homegrown plants would have a positive benefit in that…it would reduce the number of racially disproportionate arrests for that activity,” he commented.
  • Makoso encouraged people to check out the WA SECTF website for the final report language which would also be submitted to the committee and other relevant groups by the mandated deadline of December 9th (audio - 5m, video).
    • “Our last official meeting as a task force is next week on December 7th,” he told legislators, and task force appointees would “finalize our report” before it was submitted to “the relevant parties.” Though their mandate extended through June 2023, Makoso communicated how the recommendations signified where their “official work ends.”
    • However, “the whole goal of our task force is to bring this conversation to light to put it in front of the appropriate parties that can actually move on this,” so he saw their report as “where the work begins.” Aware that “recognizing there's a problem and doing something about it are never the same,” Makoso urged lawmakers to pick up where the task force’s “spirited conversation” left off. He’d spoken with some legislators, including Kloba, cognizant of the difficulty inherent in “trying to find consensus amongst people that maybe don't agree.”
    • “This is a very important time in our history as a country, and certainly here at the state level on this topic,” Makoso said. He indicated, “I'm active in other states as well, other states are watching the work that we do around this topic, how we address social equity, how we address harms that were caused by…antiquated, some would say even racist policies at the federal level that have impacted specific communities.” He felt it was a question of “what we are going to do…to address it actively, specifically in the context of cannabis and the cannabis industry” as well as in broader “social equity policy.”
    • Makoso appreciated the invitation to talk about their recommendations, promising a final report that was “very comprehensive…and I would encourage you to read it” as he knew task force members were really looking forward to “seeing what you folks here in this committee as well as other legislators in the state do from here.”

• Chair Kloba had a question around new license types task force members had envisioned with their recommendations which would be reviewed at the group’s last meeting on Wednesday December 7th.
  • Grateful for the group’s work, Kloba concurred “that having difficult conversations is a whole entire skill set that it takes some time and effort to develop” (audio - <1m, video).
  • She asked if the recommendation for “creating new license types reserved for social equity applicants” covered “consumption lounge[s], or delivery, or things like that” (audio - 2m, video).
    • Sherman affirmed that understanding, indicating a mandate “to weigh in, both on the creation of new licenses of the existing types, as well as new types of licenses.” He said they’d had dedicated meetings on social use and delivery licensure which led to “some detailed recommendations about both of those…and how they could be done with an eye towards equity.” Sheman expounded upon “one of the things that we talked about a lot was if we want these equity licenses to exist in perpetuity, and for there to be an equitable economy that continues to exist that we actually need to structure these business types in a way that small and mid-sized businesses are viable long-term” and not “a speculative rush to get bought out in a tumultuous moment.”
  • The last WA SECTF meeting for 2022—and possibly last ever—was set for Wednesday December 7th. The agenda featured a briefing on the report, public comment, discussion of WSLCB request legislation, and an update on community reinvestment spending.
    • Take a look at a comparison of WA SECTF Recommendations and WSLCB Request Legislation.

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