WSLCB - Executive Management Team
(January 10, 2024) - Summary

Leadership went over the first legislative briefing of 2024, including active bills and possible amendments, then heard about social equity applicants, education, staffing, and tribal updates.

Here are some observations from the Wednesday January 10th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 3 takeaways:

• Policy and External Affairs Director Justin Nordhorn provided a legislative update, touching on bills dealing with hemp in food, cannabis advertising, and retail theft.
  • Nordhorn was stepping in for Director of Legislative Relations Marc Webster who would provide more details at a future meeting. Nordhorn knew of “at least ten, if not more, requests for bill analysis,” and “I've seen even more on the fiscal note side of things.” He said in WSLCB there were “two distinct groups that look at those things,” and that both groups had begun to discuss the legislation. Nordhorn felt some bills were “conversation pieces” meant to bring attention to an issue, and the topics so far “span the whole scope” of what the agency regulated (audio - 2m,  Video - TVW, Video - WSLCB).
    • “we've got vapor product legislation”
    • “special permits, other license types”
    • “a number of enforcement bills that are being tracked that may not necessarily…have a direct analysis that the agency needs to do”
    • “We've been reaching out to stakeholders, having some meetings on points of interest…for them,” stated Nordhorn, and giving advice on “how they may get some of their policies going through the legislative process,” as well as how to “mitigate agency concerns in some areas.” 
  • SB 6077 - "Regulating hemp in food” (audio - 1m, Video - TVW,  Video - WSLCB)
    • Sponsored by Senator Bob Hasegawa, Nordhorn said “there was so much discussion around the THC [tetrahydrocannabinol] components…the last couple years” and SB 6077 was “predominantly focused on hemp extracts as a food ingredient within the state.” The bill would make the Washington State Department of Agriculture (WSDA) the lead on a ten-year pilot program in partnership with the Washington State Department of Health (DOH), and Nordhorn indicated it wouldn’t “change any of the definitions…from what we've had in the past, so the past legislation isn't being necessarily modified.” He noted there would be age restrictions, and the impression he had was “they're being mindful of some of those implications and so I don't think that there'd be anything…thus far that would create any type of alarm” for WSLCB.
      • SB 5367 was agency request legislation pertaining to regulation of cannabis products which was modified, then passed in May 2023. The board opened a rulemaking project that June to implement the law, though it had since faced delays. 
      • During the preceding board caucus, Postman mentioned he was concerned about new hemp bills intersecting with their work on SB 5367 (audio - 2m, Video - TVW, Video - WSLCB).
    • Board Chair David Postman brought up SB 5367, “which was hard to get done,” and that there’d been concern that subsequent bills would modify it. He agreed with Nordhorn that as drafted, SB 6077 “really creates a separate avenue for products that are below detectable level…we're still going to enforce everything that the legislature” approved in SB 5367. Nordhorn concurred, adding, “it doesn't change any of those authorities,” but he did want to hear from Enforcement and Education staff regarding Section 6, which authorized WSDA to “contract out some enforcement components,” which WSLCB had been barred from doing under a 2019 law legalizing hemp production. “Because we…are an extension of [the] Department of Health and Department of Revenue that might be something our enforcement partners may want to be looking at,” Nordhorn told the group (audio - 1m, Video - TVW, Video - WSLCB).
    • In a comment to Cannabis Observer on LinkedIn, member of the former Washington State Hemp in Food Task Force and Industrial Hemp Association of Washington (IHEMPAWA) Executive Director Bonny Jo Peterson claimed SB 6077 “as currently written [was] horrible and will Not be supported by the [IHEMPAWA] or the majority of the hemp industry as it does not fix the any amount of detectable THC or allow for in-process hemp extracts.” She later implied a separate bill on the topic might be introduced. 
  • Board Member Ollie Garrett brought up cannabis advertising—which staff had drafted a request bill for in the fall of 2023 before being advised by the governor’s office to instead try to amend an existing advertising bill—who was curious if there had been conversations on “is it time for a change or not?” (audio - 3m,  Video - TVW,  Video - WSLCB).
    • Nordhorn explained that they had looked into that, including in a trio of webinars in August 2023, but that agency leaders decided to try and amend SB 5363 which had been introduced in 2023 instead. He remarked that they’d worked with industry representatives on “proposing some amendments…around moving some of the advertising oversight from the State to the local governments, particularly dealing with trade name signs, so size and just general trade name issues, where we would still keep…general advertising oversight, particularly around content.”
    • Nordhorn expected “some concerns from the public health and prevention industry around some of that,” feeling there was “still more work…to be done” as some “language may be a little bit challenging in our enforcement area.” Sponsoring Senator Drew MacEwan “was on board with amendments and so we're trying to utilize that vehicle to make those changes,” Nordhorn said.
  • During his update, Director of Communications Brian Smith reported that media inquiries on cannabis retail thefts had been “ongoing.” He explained, “TV stations like to follow up with us on that” and contact WSLCB “every single time that there's a smash and grab and I've explained to them all that we've tried to do to help…but I don't always want to be the face of retail theft.” He felt “typically at this time of the year…there will be proposals in the legislature that may never go anywhere but these sound really good to a reporter...I anticipate in these early weeks of the legislature that we're going to hear more going forward” (audio - 6m,  Video - TVW, Video - WSLCB)
    • During remarks to members of the Washington CannaBusiness Association (WACA) in December 2023, Senator Karen Keiser focused on cannabis thefts involving the “stealing of cars and then driving them through the front doors.” She promised a capital budget appropriation to the Washington State Department of Commerce (WA Commerce) for “street level retailers to install bollards” in front of their stores.
      • On January 11th, Senator Jim McCune introduced SB 6133, “Deterring robberies from cannabis retail establishments,” and Keiser joined as a co-sponsor shortly thereafter.
    • Additionally, officials established the Washington State Organized Retail Crime Task Force, scheduled to next meet January 23rd.

• Licensing staff made mention of the social equity program, relaying the status of applicants, outreach strategies, and promising more expansive updates before the end of January, plus a legal challenge to the program appeared unlikely to continue.
  • Staff last discussed the program during the December 2023 EMT.
  • Director of Licensing and Regulation Becky Smith said “we are going to be doing an update to the board towards the end of January” with more details on “where they are in the process of getting licensed.” She continued to hear how securing funding was a “struggle,” but more applicants were “actually finding locations” for stores as well (audio - 2m, Video - TVW, Video - WSLCB)
    • “We're also going to update you on…outreach” for SB 5080, a 2023 law the board had opened rulemaking on to modify and expand the program. Smith said, “our new team has some new strategies” they had been partnering with Communications staff on. She mentioned updates on disproportionately impacted area (DIA) maps, “where we are…with our RFP [request for proposals],” and rulemaking would be included at the next briefing.
      • Another RFP at WA Commerce from late October 2023 pertained to issuing grants for equity applicants. WA Commerce staff hosted a webinar on it that November, as well as presenting to a legislative committee in December 2023, though without directly addressing the timeline for offering applicants technical assistance grants - which weren’t anticipated to be available before the summer of 2024.
  • Brian Smith mentioned that a legal challenge against social equity licensing programs brought in several states by company Peridot Tree, Inc., a Washington Corporation formed in 2023, appeared unlikely to be upheld by a federal judge who refused to stop WSLCB issuance of equity licenses because the plaintiff was, “unlikely to succeed on the merits because the Dormant Commerce Clause does not protect a right to participate in an interstate market that Congress has declared illegal.”

• Nordhorn shared other Policy and External Affairs updates on consumer education changes, Research Unit staffing, the process for rulemaking petitions, and tribal relations.
  • Nordhorn commented that Public Health Education Liaison Kristen Haley had taken over the cannabis consumer education updates, including a survey of consumer opinion available until January 14th which they’d received 140 responses to so far. Haley had been working with Nordhorn’s team on revisions to WSLCB educational offerings, but “there's a ton of text…great information, but it needs to have more of a graphic look to be able to explain some of the things that we're trying to educate people on.” He felt the data, developed in conjunction with the Public Education Work Group, was “not quite ready for prime time.” He assured the group it would be published, “but we're not jumping on right away just because I think there's a better way to be able to explain what we're doing” (audio - 2m, Video - TVW, Video - WSLCB)
    • Nordhorn mentioned efforts by Haley and other officials “looking at strategies around promoting the Healthy Youth Survey participation.”
    • He also called attention to a National Institute on Alcohol Abuse and Alcoholism research study from November 2023 authored by Julia Dilley, Affiliate Instructor in Epidemiology at the University of Washington (UW), as well as Multnomah County Health Department and Oregon Department of Human Services Division of Public Health Program Design and Evaluation Services Principal Investigator. Nordhorn stated there would be a “State-specific summary report for findings within our state on the data collected from the young adults that we've helped recruit for those studies, behind the scenes previews of findings, and those types of things before…they come out in the publication so that we can prepare for some of that.”
  • Nordhorn mentioned that Sarah Okey, the Operations Research Specialist who had been Acting Research Manager since the departure of then-Manager Kathy Hoffman in December 2023, would officially take on the Research Unit Manager role. He also reported that the only other remaining staffer in that unit, Research Analyst Stephen Ziegler, was “moving over to the FDA [US Food and Drug Administration] which is a great opportunity for him….it's been on his radar for a while,” but “the federal government moves a lot slower than state government so I can't say for sure how long that's been in play.” Nordhorn anticipated having agency job listings for both roles posted in the near future (audio - 1m, Video - TVW, Video - WSLCB).
    • Okey had already taken over as agency chair of the WSLCB Cannabinoid Science Work Group.
  • Nordhorn went over staff work on “process maps” for rulemaking, including an internal session focused on rulemaking petitions. He summed up the session as “eye-opening for folks on how complicated some of these processes” mandated in RCW 34.05.330 and WAC 82-05 were, “I didn't realize that those were requirements that we had to adhere to in the statutory framework, and why some of these timelines are so challenging and structured, and really the rulemaking is fairly unique.” He suggested other agencies only had to have a petition response signed off by a Director, whereas WSLCB had to work with the agency meeting schedule to have a formal staff presentation and board vote (audio - 4m, Video - TVW, Video - WSLCB).
    • Postman joked that “it’s our fault” the agency had a longer timeline for responding to petitions. He added that after significant work by staff, a rulemaking petition “comes to us at a certain point not always with a lot of time still on the clock for us to have…substantive changes.” Nordhorn agreed petitions had “a 60 day timeline” not just for WSLCB to acknowledge receiving it, but for the board to vote on any staff recommendations. Logistical “nuances” meant “if the board meeting happens to be on day 61, then we have to back it up by two weeks,” leaving only “45 days to complete that work and get in front of the board,” he explained.
    • “By trying to create some visuals and some broader understanding…we're going to be able to have some…really good conversations with stakeholders” about why the rulemaking outreach process worked the way it did, argued Nordhorn. This would help “make it easier when we want to make a change to introduce some of those concepts, particularly countermeasures,” Nordhorn said, but not “introduce too many things” because the point was to “make this easier to understand” the petition process.
    • Policy and Rules Manager Cassidy West outlined her approach to rulemaking petitions for the board in October 2023.
  • In a short mention of tribal relations, Nordhorn suggested staff were “making progress on all open negotiations that we have” after some “had stalled a little bit…but we've actually picked up conversations and that's been very positive in the last couple months” (audio - 1m, Video - TVW, Video - WSLCB).
    • Board members approved minor changes to a tribal compact between the State and the Samish Indian Nation in December 2023.

Information Set