WSLCB - Board Meeting
(September 25, 2024) - Summary

WSLCB staff postponed several rulemaking projects before the Board enabled cannabis businesses to accept checks then heard comments in the aftermath of the Kim Potter debacle.

Here are some observations from the Wednesday September 25th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 4 takeaways:

• WSLCB Director of Policy and External Affairs Justin Nordhorn announced the postponement of the public hearing on cannabis product samples as well as the final rules for both the Social Equity in Cannabis Program and tetrahydrocannabinol (THC) rulemaking projects.
  • Product Samples [ Rulemaking Project ]
    • Although previously scheduled to occur during the September 25th board meeting, the public hearing was rescheduled for Wednesday October 9th (audio < 1m, video - WSLCB, video - TVW).
    • Paper and Leaf General Manager Daniel Brown had traveled to provide comments in person, and urged WSLCB staff to reconsider elements of their proposed rule changes for cannabis trade samples (audio - 3m, video - WSLCB, video - TVW).
      • Brown noted that the proposed requirement for quarterly tracking of samples would be difficult for retailers to manage and could lead to inaccurate data: "Quarterly tracking is a little difficult for all the point of sale systems that I've spoke with. No one really has that set up. It would be on the store themselves, and I don't think they do that very well."
      • He expressed concern that “getting rid of the designation for the buyer to have more than a normal employee” and reducing the number of samples a licensee can receive annually could make it difficult for retailers to adequately evaluate products: "If I can only get 60 samples a year, I can't even try one sample per vendor that I carry. It's, it's dangerously low, and it's going to encourage parking lot samples. And I know that is not what you guys want."
      • Brown stated that he approved of the proposal to provide budtenders with full-sized samples, but reiterated his concern that the reduced number of samples for buyers would ultimately be harmful to the industry.
  • SB 5080 Implementation [ Rulemaking Project ]
    • Nordhorn explained that a supplemental CR-102 would be filed to re-propose rules regarding the Social Equity in Cannabis Program which incorporated public feedback on topics including the scoring rubric and title certificate holders (audio - 1m, video - WSLCB, video - TVW).
  • SB 5367 Implementation [ Rulemaking Project ]
    • The THC rulemaking CR-103 was also postponed to resolve a technical conflict with recently completed medical endorsement rules, both of which modified WAC 314-55-080. Nordhorn stated, "The original timing was to have…the THC rulemaking conclude before the cannabis medical, not the excise tax, it was the medical endorsement rules. And they got flipped,” risking a temporary change in the 5367 rules overwriting the “far more robust change” in the enacted medical endorsement rules (audio - 1m, video - WSLCB, video - TVW).

• The Board denied several petitions to amend WAC 314-55-570 to exclude social equity title certificate holders from the Social Equity in Cannabis Program because a rulemaking project related to this topic was in progress [ Rulemaking Petitions ].
  • Nordhorn summarized five petitions requesting that the Board exclude social equity title certificate holders from the program by repealing WAC 314-55-570 (1)(j) and (5) (audio - 5m, video - WSLCB, video - TVW).
    • He stated that Engrossed Second Substitute Senate Bill (E2SSB) 5080 allowed social equity applicants to locate licenses anywhere cannabis businesses were allowed (RCW 69.50.335 (1)(e)(i)), and gave title certificate holders permissive authority to apply for social equity licenses (RCW 69.50.335 (2)(b)).
    • A rulemaking project to implement SB 5080 was in progress, so the Director's Office recommended the Board deny the petitions.
  • WSLCB Board Member Jim Vollendroff moved to deny the petitions, WSLCB Board Member Ollie Garrett seconded the motion, and the petitions were denied (audio < 1m, video - WSLCB, video - TVW).

• The Board adopted final rules for payment flexibility enabling cannabis licensees to conduct business-to-business transactions using checks beginning in late October [ Rulemaking Project ].
  • WSLCB Policy and Rules Coordinator Daniel Jacobs presented the CR-103 indicating the amendment to WAC 314-55-115 stemmed from a February 2023 petition requesting that licensees be allowed to purchase cannabis from other licensees via mailed checks (audio - 6m, video - WSLCB, video - TVW).
    • Jacobs summarized the CR-101 (filed May 8, 2024), a survey of licensee opinions on the rule change, and the CR-102 (filed July 31, 2024).
  • Garrett moved to adopt the CR-103, the motion was passed, and the rules would go into effect on October 26th (audio < 1m, video - WSLCB, video - TVW).
  • Later during general public comments, Washington CannaBusiness Association (WACA) Deputy Director Brooke Davies attempted to clarify the organization’s position on the flexible payment terms rule. She stated, "Our concern is solely based on placing the burden on the person receiving the check to have to deposit that check within five days, because there are circumstances that could be out of their control," such as lost or misdirected mail (audio - 3m, video - WSLCB, video - TVW).

• General public comments focused on the hiring of Kim Potter, a former police officer who was convicted of manslaughter, to train LCB staff, with many arguing that leadership had not adequately addressed concerns about racism within the agency and inequalities within the cannabis sector.
  • UFCW 3000 Political and Legislative OrganizerAmirah Ziada expressed gratitude for the cancellation of a training led by Kim Potter but criticized WSLCB Director of Education and Enforcement Chandra Wax's response to questions about the decision (audio - 3m, video - WSLCB, video - TVW).
    • Ziada thanked the Board for recognizing the potential harm of hiring Potter: "I want to thank the board members for taking quick action to cancel that and recognize…the harm that, that could put on Black and Brown community."
    • Ziada stated Wax had been dismissive and failed to understand the gravity of the situation. She quoted Wax's response to Garrett's question about whether the decision to hire Potter would be controversial: "I do not believe this is a case of missed opportunity for us to analyze that decision prior to having it brought to our attention by the Seattle Times. And I haven't seen any evidence or conversation about that being the case."
    • Ziada characterized Wax's remarks as flippant and said they demonstrated the "mindset and the culture in the Enforcement and Education division of the LCB." She called for Wax's immediate resignation.
  • Akberet Manning alleged that the WSLCB is a racist organization and recounted his experience being denied a cannabis license in 2015 (audio - 2m, video - WSLCB, video - TVW).
    • Manning stated that she believes the WSLCB favors White applicants: "I think the LCB is [a] very racist organization, people is here to help White people, and I think that things need to be changed. Rules need to be changed to fit everybody."
    • Manning recounted that she applied for a license in 2015 and was denied. She also shared that she had witnessed other Black-owned businesses in south Seattle being raided and shut down by the WSLCB. She added that she had since observed White-owned businesses operating in the same area where the Black-owned businesses were forced to close.
  • Cannabis Alliance Executive DirectorCaitlein Ryan requested data on the medical cannabis tax exemption and called for transparency and accountability from the WSLCB regarding the decision to hire Kim Potter (audio - 3m, video - WSLCB, video - TVW).
    • Ryan asked for data to track the impact of the medical cannabis tax exemption, including: "the aggregate percentage of sales receiving the exemption, number of stores in the top 15% of those sales receiving the exemption [and] of those top 15% of stores, what percentage of their sales represent the exemptions."
    • She also asked about the number of stores participating in the exemption and whether there had been an increase in patient registrations.
    • Ryan then addressed the WSLCB's decision to hire Kim Potter, stating that the choice damaged public trust in the agency.
    • She called for an open and transparent investigation into the circumstances surrounding Potter's hiring and "clarity in, and open discussion of how, the LCB is working to ensure this type of thing can't happen again."
  • Black Pioneers in Cannabis (BPIC) Co-Founder and Gas Station LLC Owner Sekani Perkins characterized the staff decision to hire Potter as only one example of the agency's history of racism (audio - 6m, video - WSLCB, video - TVW).
    • Perkins indicated, “the recent issue with Kim Potter has only been the tip of the iceberg."
    • He then attempted to play a recording that he claimed evidenced a plan to introduce racist policies into the cannabis industry from its inception. When asked to summarize the recording, Perkins said that he would send it to the Board.
    • Later during general public comment, Christopher King claimed that the recording was of “my co-producer, Anne Continelli” who was “discussing the discussion that was had where it was made clear the 10 year plan was to bring everybody out from underneath the black market, regulate the heck out of them, and then basically, you know, strangle them, and then pass it off to Big Pharma like Merck. And who’s with Merck? [WACA Executive Director] Vicki Christophersen, isn’t that something?"
  • BPIC Co-Founder and Green Wall Street LLC Owner Sekayi Perkins condemned the WSLCB's decision to hire Potter and called for a social equity task force or oversight committee to guide the agency (audio - 4m, video - WSLCB, video - TVW).
    • Perkins expressed disappointment in the selection of Potter as a trainer and characterized the situation as indicative of systemic racism: "Myself and other members found that to be almost a slap in the face given the fact that, the obvious, obviously it's [insensitive] that our communities have been targeted by War on Drugs and systematic genocide or racism. To have somebody to point or allocate funding for us that's almost like blatantly, disrespect."
    • Perkins argued that a social equity task force could help ensure that only qualified individuals conducted trainings for social equity applicants: "I believe that to combat that, we…should start a protocol where we implement a task force or oversight committee for social equity for and by social equity applicants."
    • Perkins added that he had been disappointed by the organization Launch Industries but satisfied with the work of FMS Global Strategies despite some disagreements within the community.
  • David Rose condemned the WSLCB's decision to hire Potter, alleging that the decision was evidence of the Board's disrespect for the Black community (audio - 3m, video - WSLCB, video - TVW).
    • Rose argued that the WSLCB Board would not have hired Potter if she had killed someone who was not Black: "Can you imagine if we hire somebody who killed one of you guys like that? You know, if she killed a Jewish person, would you hire her?"
    • He went on to agree with a previous speaker who had called for the formation of a social equity oversight committee: "And also, you know, I agree with what Sekayi said, we need an oversight on the board, because you guys don't represent us in a way that we need to be represented."
    • Rose stated that the current board resembles the racism of earlier historical periods: "And I second the motion that, you know, that we need to have someone like [FMS Global Strategies President + CEO] Paula [Sardinas] up there, you know, to kind of balance this somewhat…because the oversight this is, is 1492, it looks the same."
      • Sardinas had been a leading advocate for Washington’s African American communities on cannabis equity since legislation to establish the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), HB 2870, was introduced in 2020.  Sardinas was appointed to represent the Washington State Commission on African American Affairs (CAAA) on WA SECTF, whose members then elected her co-chair along with Representative Melanie Morgan.  In May 2021 under uncertain circumstances, Sardinas resigned from the Washington State Commission on African American Affairs (CAAA) and as Co-Chair of WA SECTF.
      • The 1619 Project is “a long-form journalistic revisionist historiographical work…focused on subjects of slavery and the founding of the United States” which was launched in The New York Times Magazine “in August 2019 to commemorate the 400th anniversary of the arrival of the first enslaved Africans in the British colony of Virginia.”  However, “European enslavement of Native Americans has been documented as far back as Columbus in 1493–94.”
  • Happy Trees retailer Paul Brice stated that he had been unfairly targeted by the WSLCB because he is Black and called on the Board to provide more resources to social equity applicants (audio - 5m, video - WSLCB, video - TVW).
    • Brice described being repeatedly penalized by the WSLCB, stating that he believed the agency was attempting to drive him out of the industry: "I am the most fined, attacked pot shop in the state of Washington. And it's no doubt, because of the color of my skin."
    • He called on the WSLCB to provide more financial resources to social equity applicants so that they can be successful: "all these storefronts…for the social equity, we're trying to make these successful. You know, not enough money was given."
    • Brice expressed frustration with the social equity program, which he argued had been "watered down" by the WSLCB to benefit applicants whom the program was not designed to help.
    • He criticized the WSLCB for failing to address social equity licensees' questions and stating that the Board's stated commitment to equity rings hollow: "You guys do not want to see Black or Brown inclusion. You guys say it when you guys feel it sounds good to make it like that’s what we’re doing."
  • Christopher King criticized the WSLCB for hiring Kim Potter, who fatally shot Daunte Wright, and accused WSLCB Chair David Postman of attempting to silence critics of the agency (audio - 3m, video - WSLCB, video - TVW).
    • King accused Postman of silencing criticism of the WSLCB: "Whenever we criticize someone at this agency, when we ask a question, Mr. Postman won’t answer our questions. But when we criticize someone at the agency for doing things that we know were manifestly illegal and racist, he waits till after we're done talking, and then brow beats us later in the comments by saying, ‘How dare we criticize these hard working staff who are so thoughtful and working so hard for social equity’ and all this and all that."
    • King demanded that the agency produce public records related to the WSLCB's social equity program: "So there’s a public records request pending, and I don't want it to take like a year, like it always does with you guys, to get any documents. You understand me. I'm tired of that."
    • King concluded by calling for the replacement of the WSLCB Board with individuals who better represent the community, stating that he expected to be criticized by Postman for speaking out: "Guys, the board needs to be removed. We need people from the community on this board. We need a voice of responsibility on this board and accountability. Because you heard a number of people, even White people, just tell you there is no such thing here. And when I'm finished this time, I'm going to take my dramatic pause, and I hope that you reflect on things instead of criticizing me again, Mr. Postman, I don't need to hear from you today."
  • Black Excellence in Cannabis (BEC) President Peter Manning condemned the WSLCB's hiring of Potter, argued that WSLCB Board Member Ollie Garrett and Director Will Lukela were ineffective, and called on the Board to apologize for its history of racist policies (audio - 4m, video - WSLCB, video - TVW).
    • Manning opened his comments by stating that the WSLCB had a long history of harming Black and Brown communities: "A wise man once said, you'll know a tree by the fruit it bear. Meaning, if a tree bears bad fruit, it's a bad tree. This agency has always beared bad fruit when it pertains to Black and Brown."
    • Manning went on to argue that the decision to hire Potter, who is White, to lead a training on interacting with people of color demonstrates the WSLCB’s disrespect for Black people: “So for Chandra Wax to make a decision to hire Kim Potter that unjustly killed a Black man by the name of Duante Wright, a young man, was highly insensitive to the Black and Brown community. More so the Black community. What possibly could she teach the LCB about dealing with Black people, other than the thing that LCB is prone to deal with Black people in a certain kind of way: suspicious, unfair, and racist.”
    • He then accused Garrett and Lukela of being ineffective, stating that they represent “symbolism without substance” and criticized them for failing to prevent the WSLCB from hiring Potter.
    • Manning concluded his comments by stating that he had been fighting for racial justice in the cannabis industry for over a decade and called on the Board to apologize to Black Washingtonians for its history of racism: “I've been in this fight since 2010, 2011, about Black inclusion in this cannabis industry and the racist policies the LCB have always been there in my hairs, my crosshairs… You apologize to the gays. You apologize to the natives. Where's our, where's our apology?”
  • Emerald City Collective Gardens President and BEC Vice President Mike Asai condemned the WSLCB's decision to hire Kim Potter as a trainer and stated that the agency is a racist institution that prevents Black and Brown people from building wealth (audio - 5m, video - WSLCB, video - TVW).
    • Asai argued that the decision to hire Potter was an intentional act of disrespect towards the Black community, stating: "They've hired Kim Potter, a convicted murderer who killed a young man, unarmed Black man, 20 years old. And for what - to further disrespect us, to remind us that this system doesn't give a damn about Black life."
    • Asai accused Wax of lying about her knowledge of Potter’s background: "Chandra Wax, Chief Enforcement officer is a liar, a coward, and a racist.  She’s no friend of justice... She had the audacity to claim she didn't know who Kim Potter was, but we're not buying it. That lie is part of the playbook protecting White supremacy, one falsehood at a time.  This is how the system works!  Whites protecting Whites, always at the expense of Black and Brown lives."
    • Asai characterized the WSLCB as a racist institution that uses its power to harm Black and Brown people: “This agency is built on racism, since the 1930s. It has used its power to block Black and Brown communities from wealth and that should be, that should be ours.”
    • He concluded by demanding Wax’s immediate firing and the removal of other WSLCB employees (“Garza-lites” in reference to former Director Rick Garza) who perpetuated a “corrupt, racist system."
  • Sami Saad (audio - 4m, video - WSLCB, video - TVW)

Information Set