WSLCB - Board Caucus
(March 10, 2020) - Summary

[ Event Details ]

The Board cancelled the March 18th Board Meeting, rescheduled the Quality Control public hearing, and learned about the surprising fate of the agency’s social equity legislation.

Here are some observations from the Tuesday March 10th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

  • The March 18th Board Meeting was cancelled, and the public hearing on quality control rules was rescheduled to April 1st.
    • Board Chair Jane Rushford reported that WSLCB had received guidance from “the Governor’s office and Department of Health (DOH)” asking agencies to consider “cancelling or adjusting non-essential in-person employee meetings or gatherings of ten or more individuals for the time being” due to Washington’s outbreak of the novel coronavirus, or COVID-19. In light of this, Rushford asked for opinions on cancelling the next board meeting, scheduled for March 18th  (audio - 9m).
      • The agency discussed their initial COVID-19 preparations on March 3rd.
      • Rushford explained that a public hearing on the Quality Control (QC) Testing and Product Requirements rulemaking project (WSR 20-03-176) had been slated for their board meeting. The proposed QC rules were approved by the board on January 22nd. Rushford felt that “given the complexity...and some of the varying opinions” the Board expected “to have people here” for the hearing. Postponing meant that the agency would “need to revise the CR-102” and reschedule the public hearing until “April 1st or 15th.” If the Board voted for the move then WSLCB Policy and Rules Coordinator Kathy Hoffman would notify the Office of the Code Reviser (OCR) of “a hearing continuance” while the agency notified stakeholders through existing channels.
      • Board Members Ollie Garrett and Russ Hauge were in agreement about an “uncertainty factor” around a potential increase in illnesses. Hauge said the WSLCB should proceed with an “abundance of caution approach” and cancel the meeting in part “because there’s no testing” to tell “how far it’s been spread”. Rushford agreed with their assessment “especially since this is starting to move south” and wanted neither staff nor guests exposed unnecessarily.
      • Rushford mentioned other possibilities like teleconferencing or her reading written comments that had been submitted into the record. She said Hoffman was comfortable with postponement until April.
    • Board members settled on April 1st, with Hauge terming it a “soft date” as he and Garrett were open to a further continuance if the “atmosphere of confusion” around the virus had not lessened over the next three weeks. The Board then voted to cancel the meeting and have Hoffman “make the appropriate adjustments in our notice requirements for the rulemaking.”
    • Hauge had planned to hold a meeting of the Washington State Sentencing Guidelines Commission (SGC), which he chaired, at WSLCB’s Olympia headquarters on March 13th but viewed it as “inappropriate” to hold a potentially large gathering when the agency whose facility would be utilized wasn’t holding such meetings. He decided to change SGC’s meeting to be “remote only.” Rushford added that staff rescheduled a listen and learn session on the agency’s Voluntary Compliance Program (VCP) program for the same reason, opting to utilize Zoom Video Communications instead. She expected it would “go less than perfectly, but it's a way to preserve some of the momentum” in WSLCB rulemaking.
  • The Board learned the latest developments on the agency’s social equity request legislation as it approached final passage.

On Monday March 9th during floor activity, HB 2870 was rewritten and amended once more before being returned from the Senate.

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  • The legislation was moved to 2nd reading, the final chance to amend bills before a vote on passage by the entire body. Majority Deputy Leader Rebecca Saldaña made a motion to not adopt WA Senate LBRC’s striking amendment, hearing no objections to the move, Lieutenant Governor and Senate President Cyrus Habib said the move was “so ordered” (audio - <1m, video).
  • Saldaña instead proposed Amendment 1353 which would strike the version of the bill which passed the House on February 16th for language with the following effects (described on the last page of the amendment):
    • “Makes technical and clarifying revisions” to the program.
    • Specifies that “the act is not intended to increase the total number of authorized marijuana retail outlets.”
    • “Removes one condition that allowed the [WSLCB] to deny an application by a social equity applicant if additional marijuana retailer licenses were not needed to meet the social equity goals in that city, town, or county.”
    • Added members to the Marijuana Social Equity Task Force, one from the Department of Commerce, “and one member who represents a labor organization in the marijuana industry.”
    • Removes nonpartisan legislative staff from “the role of providing staff to the task force. Staff support is provided by the Health Equity Council of the Governor's Interagency Council on Health Disparities; unless Engrossed Second Substitute House Bill No. 1783 is enacted by June 30, 2020, then responsibility for providing staff is transferred to the Office of Equity upon its request.”
    • The task force will “make recommendations regarding the factors the board must consider in distributing the licenses currently available” including any “retailer licenses that were not previously issued by the board but could have been issued without exceeding the limit on the statewide number of marijuana retailer licenses” with task force members “encouraged to submit individual recommendations, as soon as possible, to facilitate the board's early work to implement the recommendations. The task force expires June 30, 2022.”
    • WSLCB’s “authorization to adopt rules to implement the recommendations of the task force is restricted.” Any increase in the limit on the number of retail stores “must be approved by the legislature.”
    • Includes a “null and void clause.”
  • Before approving Saldaña’s amendment, Senator Curtis King proposed several changes on behalf of the minority Republican caucus. First, Amendment 1356 would stipulate that the “annual fee for issuance, reissuance, or renewal for any marijuana retailer license under the social equity provisions must be equal [to] the current marijuana license fee.” King said his amendment indicated that “these new people that we’re going to choose” for cannabis retail licenses “need to pay...that same amount so that we have an equal basis and we’re treating everybody equally.” (audio - 1m, video) Saldaña deemed the amendment acceptable, adding that in trying to help communities of color who had suffered disproportionate enforcement of cannabis prohibition by “addressing pathways and understanding barriers” the state should still be getting licenses “back in the community” even if that meant “no discounts” for new applicants. She felt it was more important that “people are prepared and supported to be able to access” the bill’s technical assistance grants (audio - 1m, video). King’s amendment 1356 was adopted into Amendment 1353 by voice vote.
  • King’s next change, Amendment 1357, would remove the new requirement for a labor organization to be represented on HB 2870’s task force. He said “labor at this point is not really...needed in the part of the analysis of what we’re trying to accomplish here” and may not “be pertinent to what we’re trying to accomplish.” King suggested a labor organization’s presence was a way to begin requiring policies like “labor peace agreements” in cannabis businesses, a concept which had received a public hearing in January. Calling the bill as amended “fair,” he felt the task force focus should remain on “a system that will allow these businesses, these minority businesses to be selected and then give them the best chance they have to succeed” in the cannabis industry (audio - 3m, video). Senate President Pro Tempore Karen Keiser commented that senators should oppose the change as it would do away with “the one voice at this task force that would represent working people” calling it “unfortunate we would lose that perspective and input” as it would leave the task force with three cannabis employers but no employees (audio - 1m, video). Senator Maureen Walsh expressed “strong support” in endorsing King’s amendment because she hadn’t seen cannabis employees “clamoring to unionize their industry” making the addition of a labor member to the task force “another layer of bureaucracy we’re trying to throw on top of this group of individuals.” She then called attention to Keiser’s “issues with the marijuana retailers” including her “family members that have been involved with” the cannabis industry and reiterated that labor should have no involvement in the task force (audio - 2m, video). The amendment failed a voice vote and was not adopted.
    • Habib responded to Walsh to ask that “members discuss their own family” when commenting on the Senate floor instead of referencing other members’ families “in the best spirit of collegiality” (audio - <1m, video). Keiser followed up, touching on her son’s participation in the cannabis industry and her motives for sponsoring SB 6033 to address robberies of cannabis retailers, but remained opposed to removing the labor representative from HB 2870’s task force (audio - 1m, video).
  • King’s third proposed change to the bill, Amendment 1358, moved the task force reporting deadline to December 31st, 2020 and would require “the report to be submitted to the legislature for approval” before WSLCB could take action on their recommendations. King noted “we are giving this task force a lot of authority” and suspected “some of the things that may come out of this task force” could be “substantive legislation." He argued it was better to give the legislature a chance to consider and approve any changes beforehand rather than give the task force “carte blanche authority” (audio - 2m, video). Saldaña was opposed to King’s revision as she’d heard from prospective licensees who “do not want delay because they've already felt that they’ve been shut out.” She restated that HB 2870 would not increase the “number of new licenses” and WSLCB was prepared to act to review and approve “new businesses benefiting our communities and benefiting our tax base more quickly.” Saldaña was against anything that “delays justice and delays opportunity” (audio - 2m, video). The amendment failed a voice vote and was not adopted.
  • The Senate then considered passage of the amended floor striking amendment and as Habib was uncertain of the results of a pitched voice vote, instead asked senators to stand to indicate their position. Following the count, amendment 1353 was adopted to revise the bill (audio - 1m, video).
  • HB 2870 was next moved to 3rd Reading, the final stage for comments from members before a vote on passage of the bill. Saldaña spoke first for the majority caucus, again emphasizing that the legislation was “a wise and a prudent step forward, we are not adding new licenses” under the bill but would be “creating equitable opportunity” within the currently approved number of stores (audio - 2m, video).
  • King gave remarks on behalf of the minority, saying that "one of my frustrations is that this last striker was brought to us this morning, just kind of from out of nowhere." He told his colleagues that “the legislature is really giving up some of their authority here" and the task force as composed would be less “focused on trying to get those licenses into the hands of minority businesses in a fair and equitable way.” The addition of new task force members left King “very concerned that this may be used as trying to set the precedent of how we move forward and that this group may look at substantive changes to our law” (audio - 2m, video).
  • HB 2870 was passed by a roll call vote of senators resulting in 28 yeas, 20 nays, and one member excused (audio - 3m, video).

In the early afternoon on Tuesday March 10th, the House voted to accept the Senate’s changes to HB 2870 while honoring the bill’s primary sponsor, Majority Caucus Chair Eric Pettigrew, one of the House’s few African American members who planned to retire from the Legislature at the end of the 2020 session. Deputy Speaker Pro Tempore John Lovick, the first African American to serve in that role in Washington’s history, brought the bill up for concurrence.

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  • “I’m actually very honored that you’re presiding at the time that I’m introducing my last bill in my 18 years here in the legislature,” Pettigrew told Lovick, adding he was “even more proud that it is a bill that reflects social equity” an issue that had been his “mantra for my entire career.” He believed the legislation represented “a fitting end as far as my last piece of legislation.” He reviewed the Senate’s changes for colleagues saying they “improved the bill” and urged their support (audio - 1m, video).
  • Assistant Minority Floor Leader Drew MacEwen reported that “a number of people, however, on this side still have a lot of issues with some of the underlying items in the bill.” He called it “painful” to speak against the bill given the work of Pettigrew and others since “I understand where he’s coming from.” But the minority caucus believed there were “things in here that we think could have still been done a little bit better” and would oppose the bill. “But I just want to congratulate the gentleman on all the good work that he’s done here through these years here and it’s been an honor to work with him on these issues,” MacEwen said (audio - 1m, video).
  • The House voted to concur with the Senate changes by a vote of 57 yeas, 40 nays, and one excused. Once signed by the Speaker of the House and President of the Senate it will be delivered to Governor Jay Inslee for his signature or veto (audio - 1m, video).