WSLCB - Board Meeting
(December 4, 2024) - Summary

Proposed social equity program changes garnered a mix of support and criticism during their hearing, plus almost all public comments reflected doubt WSLCB would improve the situation.

Here are some observations from the Wednesday December 4th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 3 takeaways:

• Acting Policy and Rules Manager Daniel Jacobs described changes to the proposed rules for implementing Senate Bill 5080 in a public hearing where commenters voiced concerns about the cannabis social equity program and a proposed change to license mobility, continued after the hearing in general public comments.
  • Started in June 2023, Jacobs previously detailed the revised rule text updating the equity application process and scoring rubric on October 23rd. The agency announced an apparently successful vendor to score completed applications, Alta Point Consulting, the following day.
  • Jacobs introduced and summarized the supplemental CR-102, which included changes to the proposed rules based on feedback from a prior public hearing on September 11th (audio - 4m, video - WSLCB, video - TVW).
    • One significant change involved creating "a separate registration window for retailers versus non-retailers,” which was suggested to “allow individuals who don't get selected for a retail license to potentially apply for a producer/processor license,” said Jacobs.
    • Another change involved modifications to the scoring rubric used to prioritize applicants, where Jacobs relayed their proposal to increase applicant points for living in a Disproportionately Impacted Area (DIA) and decreasing points for having a criminal history conviction. He stated the changes were also “increasing the amount of points related to household income and increasing the amount of points related to prior dispensary ownership.”
    • Jacobs indicated another change involved clarifying that those “who applied pursuant to House Bill 2870 can't move license locations until January 1st, 2026." While it had been 90 days “after the application window closed, but after receiving stakeholder feedback, we pushed that out.”
    • The final point he mentioned related to retail title certificate holders—those who had been given a license by WSLCB, but were barred from opening due to local government bans or moratoriums—where officials chose to “maintain prior board policy, which says title certificate holders can apply for reinstatement of their initial title certificate in the same county that they were initially issued in, but they're allowed to separately apply to” for retail stores which had not yet been licensed.
  • Starting off the public comments on the rulemaking project, Black Excellence in Cannabis (BEC) President Peter Manning expressed support for changes to the scoring rubric, stating his members were "pleased with the rubric the way it stands," and then noting staff “decided to change it for whatever reason, and we pushed back on it…and you changed it back,” leaving him wondering if this counted as “a victory, or do I consider this a stall tactic” (audio - 4m, video - WSLCB, video - TVW).
    • Rueing that he’d “been doing this for almost 10 years,” Manning was of the opinion that the "system was broken to begin with," and that WSLCB should be doing more to help African Americans get into the cannabis industry.
    • Manning also mentioned a lawsuit filed against the agency by BEC Vice President Mike Asai related to his prior dispensary, Emerald City Collective Gardens, where he alleged "Whites were given preferential treatment over that of Blacks and Browns when Whites had no qualifications” to receive cannabis licenses aimed at adding medical dispensaries into the licensed adult-use market. Manning concluded there’d been “families affected and it’s sad that a regulatory agency that's supposed to represent the entire State of Washington and all the people overlook the people that they most impacted and profited off of doing the war on drugs.”
  • BEC Vice President Mike Asai echoed Manning’s support for the scoring rubric, as well as his broader concerns about the trajectory of the equity program (audio - 3m, video - WSLCB, video - TVW).
    • Asai raised concerns about the proposed rule that allowed title certificate holders to reinstate their license while also being able to apply separately as a social equity applicant. He called this "truly unfair" and “double dipping,” because "me and others, as a social equity applicant, I can only apply once." He promised BEC members “will be working to get rid of that in law” during the 2025 legislative session, adding “it's not in law in 5080, that social equity…applicants can only apply once.”
    • Asai also questioned the process for ensuring that priority was given to former dispensary and former collective garden owners when awarding social equity licenses.
    • Asai indicated there’d been “growers that got in under this last round, people that had a collective garden,” but he believed the intention had been to help “former dispensary owners. So I'm not sure how the third party vendor is going to look at that…what is the process to ensure that we are prioritizing former dispensary owners?”
    • The last point Asai made was “you're giving credit for those who applied for 2870 but didn't get across the finish line,” but “what about those who applied in 2015 under Senate Bill 5052? I put applications in that had a priority one, two or three, but did not get across the finish line.” He asked that returning SB 5052 applicants get “some credit for that” during the application process.
  • During general public comments two speakers offered input specific to the CR-102.
    • Equity applicant Casey Calhoun expressed concerns about the proposed changes to license mobility (audio - 2m, video - WSLCB, video - TVW).
      • Calhoun challenged "LCBs repeated stance on license mobility when the statute language regarding license mobility for all social equity licensees is clear, concise, and is not ambiguous." He regarded the proposal as offering “broader location opportunities under specific conditions…involving an expanded timeline of more than a year from now, and creates an additional scoring requirement, which in fact does not offer broader location opportunities, but in fact restricts location opportunities.” Calhoun viewed this as "clearly in conflict with the majority of stakeholder feedback," as well as the recommendations of the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF).
      • Calhoun argued that "nowhere in 5080 is there language for two different license mobility structures, grandfathering provisions, or savings clauses,” and board members “should not implement a rule in conflict with statute."
    • Applicant David Rose expressed similar concerns about changes to license mobility (audio - 3m, video - WSLCB, video - TVW).
      • Rose urged the WSLCB to "reconsider this decision and prioritize the needs of social equity applicants," arguing the rules "directly threatened my mobility to provide for my family and secure a future for myself."
      • Rose was considering doing “media outreach to ensure our voice is heard…I've heard a lot of things about being fair about this program,” yet he believed a “lot of people ha[ve] been hurt by this program.”
      • Rose also recognized that even if license mobility were allowed, equity applicants faced other challenges, such as “counties that won't let us in anyways." He was concerned “if you guys set us out for another year” before allowing mobility, “a lot of us will not make it.”

• Public comments reflected skepticism that agency staff would increase equity in the cannabis sector, though there were calls for patience from a former social equity task force leader.
  • Christopher King (audio - 4m, video - WSLCB, video - TVW)
    • King said with the departure of former Board Chair David Postman, “we need to renew the four minutes” in public speaking time since members of the public were raising “complex issues” about the social equity program. He also raised concerns that agency leaders had "increasingly, over all these years, have failed programs for social equity.”
    • King next called on Board Member Ollie Garrett to resign, stating that she had "a history of being obfuscatory.” Based on conversations with Black cannabis entrepreneurs, he’d found others who felt mistreated by Garrett, like an African American woman who’d worked alongside Garrett at Tabor 100 and said seeing Garrett's "face was extremely triggering." King suggested when he’d been asking about “what happened to certified mailings, or asking Emerald Haze, Black Excellence in Cannabis files, asking for those got you called out for demonizing Ollie Garrett." He insisted Garrett had known about the “deep seated problems with the agency in terms of racism,” stating they’d been made clear in a 2016 letter to Garrett from Manning.
  • Peter Manning, BEC President (audio - 3m, video - WSLCB, video - TVW)
    • Manning had additional comments on how he “rarely” agreed with King, but seconded his claim that Garrett ignored Manning’s letter about racial disparities in the cannabis industry. She’d "brushed that to the side," and Manning expressed his hope that Garrett would not continue as acting board chair, “if we overlook the past as Ollie wanted…we wouldn’t even have social equity now.”
    • Manning further argued that the WSLCB had “never done anything proactively” to address the harm that the cannabis industry inflicted on Black and Brown communities, insisting there were no Black-owned cannabis retailers in King County. “Social Equity licenses went out [near] the beginning of this year,” Manning remarked, and “everyone has reached out to the…LCB, and asked for help in making Seattle lax, or get lax in some of their zoning,” but the agency was “mute” on local control. 
  • Mike Asai, BEC VP and ECCG Founder (audio - 3m, video - WSLCB, video - TVW)
    • Asai brought up the Washington State Department of Commerce (WA Commerce), stating that officials there were changing requirements for distributing social equity funds. He called on WSLCB leaders to talk with their counterparts who had been “moving the goal post again right now, saying that you can't get extra funding that was supposed to be awarded to you, until you spend the money.” He insisted that some applicants were “broke, so they need money to open up,” summing up the financial expectations on applicants was “unfair.”
  • Paula Sardinas, FMS Global Strategies Founder and former WA SECTF Co-Chair (audio - 3m, video - WSLCB, video - TVW)
    • Sardinas spoke about her group’s work on cannabis social equity in Washington State. She noted she had been a “commissioner with the Washington [State] Commission on African American Affairs that worked with the LCB to bring forward the cannabis social equity policy" and subsequent legislation modifying the program like SB 5080.
    • Sardinas offered that the "intent" of Senate Bill 5052 had been to "make sure that we had 556 licenses under 5052 [including] 38 licenses that were never issued or revoked, and to have those licenses go out to folks in the community that were considered to be underserved." She mentioned outreach work WA SECTF and WSLCB had done to improve the program, and that “we have transformed the agency and made sure that [they were doing] education and not just over policing” following a critical 2019 third party assessment.
      • Learn more from independent analysis of differing state and local equity programs:
        • Cannaspire - A Comprehensive Guide to Cannabis Social Equity Programs
        • Flowhub - The Complete Guide to Social Equity Programs for Dispensaries
        • Cannabis Business Advisors - States with cannabis diversity and social equity programs
        • Minority Cannabis Business Association - National Cannabis Equity Report
        • American Journal of Public Health - Cannabis Equity Initiatives: Progress, Problems, and Potentials
    • Sardinas wrapped up by saying "Washington was one of the fourth or fifth states to create a program,” and that while more work was needed, she "absolutely support[ed] the mobility and having people be able to move their licenses."
      • In September 2020, Sardinas and title certificate holder Angel Swanson lobbied WSLCB to allow certificate holders to relocate their licenses. Sardinas also advocated that December to permit title certificate holders to be included in the equity program.
  • Sami Saad (audio - 3m, video - WSLCB, video - TVW)
    • Saad spoke about his experience as a Black Muslim “pioneer” in the Washington medical cannabis industry who had been denied a license in the regulated market while White cannabis entrepreneurs were approved.
    • Saad also expressed frustration with the WSLCB handling of social equity, accusing them of failing to support applicants even as officials allowed current license holders to move their licenses. He also asked that Seattle be an exception to the mobility allowance to keep licenses from around the state from relocating there.

• Legislators on the Washington State House Regulated Substances and Gaming Committee (WA House RSG) were set to receive an update on the program on Tuesday December 10th.
  • During the November 13th Executive Management Team meeting, Director of Legislative Affairs Marc Webster brought up preparations for the presentation including conferring with colleagues at the WA Commerce and the Washington State Office of Equity (WA Equity).
  • The agenda indicated that the WSLCB panel included Garrett, Director of Policy and External Affairs Justin Nordhorn, and Director of Licensing Rebecca Smith. Other panelists included:
    • Patrick Stickney, WA Equity Senior Policy and Legislative Affairs Director
    • Omar Santana-Gomez, WA Equity Policy and Legislative Affairs Director
    • Alison Beason, WA Commerce Life Science and Global Health Sector Lead, who testified before the committee along with WSLCB in December 2023.

Information Set