WSLCB - Board Meeting
(April 24, 2024) - Social Equity

Following a thorough review of social equity program applicant status, staff added new details to an equity rulemaking project and heard from citizens concerned with its rollout.

Here are some observations from the Wednesday April 24th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Board members received updates on the social equity program from Licensing staffers, mentioning applicant reimbursements, revisions to the scoring rubric, and inactive applicants among other issues (presentation).
  • Licensing Compliance and Adjudications Manager Nicola Reid introduced the topic. She established how officials working on the program would “share current outreach with applicants and how the process is going for the 40” remaining retail applicants. Reid said they would also explain “where we're at with the social equity reimbursement plan, specific outreach that is being planned” addressing the Washington State Department of Commerce (WA Commerce) program outreach vendor, Launch Industries, as well as “going over the proposed changes of the rubric” to score future applicants (audio - 1m, video - WSLCB, video - TVW).
    • Staff previously updated on the program in September and October 2023, and on January 31st.
  • Applicant Statistics (audio - 3m, video - WSLCB, video - TVW)
    • Licensing Cannabis Manager Linda Thompson noted the status of 40 applicants who had successfully qualified for a license allotment in the fall of 2023. All had initial interviews by WSLCB staff, and 33 had submitted documentation after that. Of the 40:
      • 2 licenses issued
      • 3 applicants with secured locations
      • 35 without reported location or financing progress
    • Thompson further acknowledged five retail title certificate holders who qualified under the social equity program, of which one had been licensed, another had secured a location, and three weren’t licensed.
    • Board Chair David Postman wanted to know about applicants who hadn’t submitted documentation following an initial interview. Thompson said for “whatever reason,” seven applicants hadn’t responded following their interview, but there was “constant communication” from the “licensing specialist and the social equity team as well” (audio - 1m, video - WSLCB, video - TVW).
  • Social Equity Plan Reimbursements (audio - 3m, video - WSLCB, video - TVW)
    • Social Equity Program Specialist Kelly Hancock went over the reimbursements to licensees who submitted social equity plans authorized through SB 5080 in 2023. She told board members that 76 plans had resulted in fee reimbursement and 34 were sent back for correction, of which 21 had been returned.
    • Hancock relayed that of the returned equity plans:
      • 59% of licensees had hired or planned to hire individuals with prior cannabis incarceration
      • 13% participated in area food drives
      • 5% participated in a community project
        • “Although it's the smallest percentage, it sees the most variety,” indicated Hancock, “things like community gardens, charity, donations, art mural projects, and partnering with local and national organizations with a focus on social equity.”
      • 23% participated in more than one area
    • Postman inquired about how much existing businesses had been reimbursed. Reid answered it was the price of a license renewal, $1,381 at time of publication (audio - <1m, video - WSLCB, video - TVW).
  • Launch Industries (audio - 2m, video - WSLCB, video - TVW)
    • Social Equity Case Manager Sarah Davis provided that the WA Commerce contractor was “in the process of launching their first two programs. The first round of grant applications is available for our first 45 applicants to apply for…happening now from April 1 to April 30.” She said there were information sessions and an application available online, and that Launch staff were “very responsive by call or text for applicants, and those interested that have had questions.”
    • According to Davis, equity applicants submitting successful grant applications for technical assistance before April 30th were “expected to receive the first grants by June 15…after that, they'll be launching their second round of grants.”
  • Scoring Rubric Revision (audio - 6m, video - WSLCB, video - TVW)
    • Social Equity Manager Aaron Washington shared that staff had completed draft revisions to the scoring rubric used by third party vendor Ponder Diversity Group to determine which applicants qualify for the equity program. He stressed that the changes he’d discuss hadn’t been “finalized,” and the public had 30 days to weigh in on the proposal.
      • The rubric was developed as part of the original program under HB 2870, but revisions had been required through SB 5080.
    • Washington remarked that 73 applicants had given staff feedback on revising the rubric, and the internal team drafting updates included not just the equity team, but staff from across the agency.
    • Based on input from applicants and staff, Washington said the following changes were proposed for each category of the rubric:
      • Category 1/1a “be combined as one question for an applicant to demonstrate they have lived in the disproportionately impacted area. A maximum of 40 points can be obtained for this proposed change.”
      • Category 2/2a “be combined, as well as category 3 and 3a each with the removal of the language ‘cannabis’ from an applicant for an applicant or an applicant's family member to simply show having a drug charge.” This was due to it being “difficult, if not impossible to find documents” distinguishing the two.
      • Category 4 “did not receive any proposed changes to the current language. However, the point allocation is proposed for change” by removing mention of home confinement as it was “not allowed for any drug charge…a maximum of 30 points can be obtained for this proposed change, which would be an increase from the current allocation.”
      • Category 5 and 6 on lost employment or housing due to a cannabis conviction were “proposed to be deleted. Applicants expressed [that] documentation was either hard or that they could not get documentation at all, to support the category.” Similarly, Category 7 “did not receive any changes to the current language. However…clarifying documentation by…affidavit and W-2s are difficult to substantiate. A maximum of 15 points can be obtained for this category.”
      • Category 8 was “proposed to base the criteria on applicants who owned a dispensary. This proposal would remove the language of ‘operated.’ We noted that more dispensaries were common in lower income areas and we look forward to community input about this proposed change.”
      • Category 9 was proposed to “remove the language of ‘retailer’ and ‘marijuana’ from the current rubric to reflect a state cannabis license in general, [and] a maximum of 15 points is proposed for this category, which would be an increase from the current points.”
      • One new category was proposed for applicants “who applied under HB 2870, the category considers issuing 15 points to those who met the qualifications but did not score high enough to be prioritized as an approved applicant.”
    • Washington concluded, “we encourage the public to take note.””
  • Board Member Ollie Garrett lauded the teams’ “work and effort” in combining public input with what was required in law. While she found it “disappointing to hear” there hadn’t been more applicant participation, “I'm hoping once we put this out now…that we will get a response from a broader group” (audio - 2m, video - WSLCB, video - TVW). Garrett also urged people with feedback to check out WSLCB online updates and share their thoughts via LicensingSocialEquity@lcb.wa.gov (audio - 1m, video - WSLCB, video - TVW).
  • Postman brought up his satisfaction with the rubric improvements, and “we just really encourage the public to weigh in…if they have insights, or people who are looking at the next round, or people who have experience in the industry, whatever it is could be helpful for us” (audio - 1m, video - WSLCB, video - TVW).

• New outreach details for the SB 5080 Implementation timeline were shared by Policy and Rules Manager Cassidy West, including pushing forward a CR-102 with proposed changes (audio - 1m, video - WSLCB, video - TVW, Rulemaking Project)
  • West discussed the project during the previous day’s board caucus, in particular an extended timeline and developing questions to ask during public engagements for it. She forecast that a CR-102 would be presented to the board in July, a timeline longer than the one she presented on March 26th, when she predicted outreach events would be completed by May.
  • In the meeting, West informed board members there would be outreach events related to the project “throughout” May on the rubric and eligibility documentation, and another in June on the full draft rules. Agency staff would complete draft rules in time for the June 19th board meeting, she insisted.

• Two members of the public decried the pace of State action on the equity program compared to demands from other interest groups as well as continuing concerns with “corruption” and how the program was being administered by state agencies.
  • Christopher King (audio - 4m, video - WSLCB, video - TVW)
    • Top of mind for King was how members of the LGBTQ+ community, with whom he considered himself allied, were getting faster action by agency leaders. “When they have a problem, things get addressed promptly,” he insisted, comparing treatment of social equity applicants who’d been “waiting for years.” King also wasn’t impressed by potential changes to the scoring rubric.
    • “I've got emails to Jim Buchanan [of the Washington State African American Cannabis Association] back in the day,” King said, mentioning his view that former licensee Kevin Shelton and others were “wrongfully taken...I'm talking about a distinct identifiable class of people here.” He stated that he was one of many people “telling it to you for years…and now all of a sudden it comes up out of the blue, 12, what 11 years later?” 
    • King compared WSLCB negatively to the State’s namesake, as “6% of the population voted when George Washington became President…you embody all of that, you know, all of that oppression, that corruption, that racism, that hegemony. That's what you do.” He went “right back to Kaleafa” and documentation including a letter from WSLCB counsel Assistant Attorney General Kim O’Neil which claimed officials had “met with two FBI agents who are carrying on a year long investigation of Mr. [William] Widmer and the various financial transactions, and the various financial transactions he's been involved in would turn your hair white.” King claimed that while this individual should face federal charges, “that never happened. But my nickel Kevin Shelton got kicked out.”
    • Amazed at the work it had taken advocates to make WA Commerce officials “and you guys to admit that there was more money out there,” King also disputed “the Dennis Turner narrative, You keep trotting him out” as the first equity retail store to open, Cloud9 in Arlington, who King previously criticized as liable for hundreds of thousands of dollars from previous business ventures. “And meanwhile, you got all these guys up there having turf wars,” he said, “these little break ins and these vandalism, it's just turf wars. And yet it's ironic, because for all these years” communities of color had done “hard time for the little marijuana turf wars. And now you turn the whole thing upside down on its head. It's insane.”
  • Peter Manning, Black Excellence in Cannabis (BEC) President (audio - 5m, video - WSLCB, video - TVW)
    • Appreciative that “things are moving forward" with equity grants, Manning remained concerned since the Launch Industries website information was publicly available: “if you are a social equity applicant, and you had a bid you were putting in, everyone is allowed to see that. I don't think that's fair.” He suggested there were “privacy issues, your competition and…for the newcomers to come in, there's a lot of predatory people out there that currently own the industry.” Manning thought the publicly disclosed information “should probably be corrected.”
    • Regarding the scoring rubric, Manning asked that individual applicants "effected on a greater scale" by one of the eligibility criteria be prioritized over a business “with ten of those people that equals the same thing.” He also felt applicants in the program weren’t promptly notified about a “For Us, By Us program…I would like to know why that was.” Manning also alleged the program staff weren’t responding to inquiries.
    • Manning spoke approvingly of a news story that quoted Garrett and Turner, “Garrett did say that the program was a failure from her eyes, from what I read and my perception of what I read.” He wanted more consideration for community input, and the revised rubric “wasn’t going to do it.” He promised to continue mobilizing community members, since in 2015 “Black people and Brown people, even though they were qualified, were cut out, while as White people that didn't have any of the qualifications were given those stores.” He blamed these store owners for “currently doing turf wars, burning each other signs, placing bombs out front of the locations, having other kids ram in stores to cut back on the competitor’s business, having various…places raided and robbed of their product.” Manning speculated “maybe it's because we restarted this program with corruption. So, maybe we should be looking at what's going on with this industry.”
    • Postman asked that anyone taking issue with WA Commerce management of the grants program should speak to that agency’s staff. “We're just trying to keep these conversations here focused on what else we can do,” he remarked, “those are not our projects, not our programs.” Postman indicated “we're really going to try to streamline” future meetings so public comments were “only talking about things that LCB has anything to do with” (audio - <1m, video - WSLCB, video - TVW).

Information Set