WA SECTF - Work Group - TA and Mentorship - Public Meeting
(May 11, 2021) - Introductions, Scope, and Responsibilities

WA SECTF - Work Group - TA and Mentorship (May 11, 2021) - Screenshot

After work group members identified themselves and staff went over scope and responsibilities, questions were raised about who could contract as a social equity mentor and how to qualify for grants.

Here are some observations from the Tuesday May 11th Washington State Legislative Task Force on Social Equity in Cannabis Technical Assistance and Mentorship Work Group (WA SECTF - Work Group - TA and Mentorship) public meeting.

My top 3 takeaways:

  • Lead staffer Christy Curwick Hoff provided a presentation on the responsibilities and scope of the task force and work group (audio - 13m).
    • Hoff’s presentation was similar to those she provided for task force members in October 2020, the Disproportionately Impacted Communities work group on February 25th, and the Licensing work group on April 21st
    • Hoff reviewed the 2020 law which established WA SECTF, the social equity technical assistance competitive grant program, and the social equity retail license application program to be administered by WSLCB. Then, she addressed the law signed on May 3rd expanding the task force membership, the task force timeline, and recommendation topics required from members.
    • She noted social equity retail applicants were eligible for “37 open allotments.” “In addition to new applicants” for social equity licenses, the grant program would be available to any licensee that received a license “issued after June 30th, 2020,” Hoff noted. She said the forms of assistance the grants could be used for were “outlined in the statutes,” and recent changes would take effect July 25th.
    • The revised law also allowed for Commerce officials “to develop a roster of mentors” that Commerce representatives “can contract with to provide mentorship and support to social equity applicants,” Hoff explained. Such mentors would have “to be at least 51% minority or women-owned businesses,” she added. The grant program had been provided an annual budget of “$1.1 million...a recurring appropriation that’ll make it into Commerce’s maintenance budget.”
    • Responsibilities of the work group highlighted in the presentation included:
      • “Advise Department of Commerce on the Social Equity Technical Assistance Grant Program,” were “recommendations that this work group is going to be leading on,” Hoff said.
      • “Other recommendations to help social equity applicants succeed?” Other recommendations “would go to the Department of Commerce, specifically, if Commerce has the authority to do those things” she posited, “or those might be recommendations that would need to go to the legislature” to be enacted.
      • “Whether to create a workforce training opportunities for underserved communities to increase employment opportunities in the cannabis industry” was “one of the new recommendations” passed on May 3rd and “one we’ll weave into the work plan for this work group, probably next year.”
    • Providing recommendations for Commerce staff was the “top priority” in Hoff’s estimation, as that department would likely not initiate the program before receiving input. She then said the grant program and social equity licensing program “really go hand-in-hand” and suggested that the work group should try to align its planned “timeframe” to coincide with the Disproportionately Impacted Communities work group guidance to WSLCB. The final recommendations to lawmakers and relevant state agencies was mandated for no later than “December of 2022,” though Hoff remarked that “we don’t have to wait till the end to submit our recommendations.” She was clear that the work group would be providing input on which task force members could base their required recommendations, but work group members would not be making final decisions on the recommendations.
  • Work group members as well as members of the public asked several questions and provided comments on the responsibilities of the group.
    • Rivera asked about the mentor roster, curious whether it could be composed of “individuals or businesses” and also if “the individuals on that roster have to be, over half identified woman or BIPOC,” (Black, Indigenous, People of Color). Nielsen replied that the question was still being considered by Commerce staff and she didn’t “have a firm answer on that.” Hoff pointed out that the wording in the law stated the department “may” establish the roster, and “quite frankly that the language in [HB] 1443 is a little bit confusing” (audio - 4m).
      • Hoff read from the session law, where section 1(4) allowed Commerce officials to “contract to establish a roster of mentors who are available to support and advise social equity applicants and current licensees who meet the social equity applicant criteria under RCW 69.50.335. Contractors under this section must:
        • (a) Have knowledge and experience demonstrating their ability to effectively advise eligible applicants and licensees in navigating the state's licensing and regulatory framework or on producing and processing cannabis;
        • (b) Be a business that is at least 51% minority or woman-owned; and
        • (c) Meet department reporting and invoicing requirements.
      • Hoff had been told by Washington State Senate (WA Senate) “caucus staff who worked on that language” that the intention was “basically like a master contract that Commerce will be developing and there’ll be a number of vendors on this contract who are individuals or businesses” with “the necessary skills or abilities to provide mentorship to new social equity licensees in the cannabis industry.” She referred to Hollingsworth and Berkley as hypothetical mentors, saying “folks like that would be able to get on this contract and then Commerce would be able to pay them directly to provide mentorship” for social equity licensees. Hoff repeated that this was her “understanding that that’s the intent of this provision...although when you read it, it reads a little bit differently.”
      • Rivera said her concern was “through an equity lens, making sure those that have monopolized the cannabis industry aren’t unfairly represented...in this mentorship program.” Slaughter stated that by requiring a mentoring business be majority “minority or women owned” the statute would attempt to “eliminate that concern.”
    • Fairley asked about mentoring exceptions, focusing on “the possibility of just finding the best of the best” in the cannabis sector as he thought it was “a disservice to some of these applicants...not to say we won’t be picking the best of the best for this program, but we may miss out on some other folks that are business owners that are, you know, even more prominent in the cannabis industry” (audio - 4m).
      • Hoff reiterated that to make it on to the roster a business needed to “be at least 51% minority owned or women owned.” She didn’t see a workaround that would allow Commerce to make exceptions, even with a recommendation from WA SECTF members, absent change to statutory language by the legislature. Hollingsworth said social equity licensees weren’t limited to the mentor roster and “nothing’s preventing all these great businesses from helping these social equity applicants, maybe we can think of other ways we can incentivize their participation without, you know, inducing legislative action.” Hoff suggested it could be possible for an applicant to use technical assistance grant money for training or support, whereas with the mentorship roster applicants were “not getting dollars, they’re getting mentorship that Commerce...will be paying the mentors directly for.” 
    • Andre Felton, a former license applicant, noted that equity applicants might qualify if they or their family member had “a criminal conviction.” He wanted to know “once that person meets the barrier for the social equity cannabis” program would “they also be denied by the state who has a point system that would decline their ability to have a license?” Furthermore, he wondered “does this have to be a cannabis-related offense...or just criminal offense in general?” (audio - 6m
      • Slaughter noted that applicants would be eligible due to “any drug offense” on an applicant or their family member’s criminal record and that WSLCB Board members had undertaken a rulemaking project on criminal history checks of applicants. She explained that in “other work groups we are...planning on recommending a point system for this program itself” for the licensing process at WSLCB to use “a new scoring rhetoric or criteria to base out their selection process.”
      • Hoff chimed in to say Felton’s question about what criminal convictions would make a person eligible as a social equity applicant was “one of the new areas that the task force has been specifically directed to issue recommendations about.” She expressed uncertainty about whether an existing work group would develop those recommendations, “maybe as a task force as a whole, or maybe we’ll be creating a new work group in the future to take this on.” Hoff’s understanding was that the agency’s licensing process didn’t deny people for cannabis possession offenses, but could consider “violence or other, other issues,” but she admitted uncertainty.
    • Paul Brice, Happy Trees cannabis retail Owner, offered to be a mentor and shared some of his background as someone with a “double felony charge in 1997” in addition to having run a medical cannabis dispensary in 2010 in the Tacoma area. His retail license was in Cle Elum, an “all-White community in a business that barely, barely makes anything, but I believe in this.” Brice had hoped that participating in the legal cannabis sector “would make me whole” as he had been “a pioneer” who had been covered by Forbes and others. “More than a couple decades of my life,” he said, “and I’m the least to benefit from this, with the most knowledge for this.” He explained that he’d missed the April 21st Licensing work group meeting due to the birth of his child, and wanted to know if there was any way he could still become a member of that work group or the task force. Brice was also curious if a place on WA SECTF was “any conflict of interest to wanting to have multiple licenses?” He was confident he was “the number one most targeted pot shop in the state of Washington” by WSLCB enforcement and attributed it to racial prejudice. His ambition was for the social equity program and mentorship roster to be “the way of hoping to see justice without lawsuits” (audio - 5m). 
      • Brice returned to the topic of mentorship saying that applicants would be entering a “competitive, hostile territory” with large retailers that “have a different way of doing business.” He said that established retail chains could “manifest orders and just pass them down through their stores so they don’t have no loss” while his store operated on “a very small ten to 15% margin” and applicants as well as staff in the approval process needed to be aware of the existing retailers around applicants.
      • Paula Sardinas, President and CEO of FMS Global Strategies who had resigned from the Washington State Commission on African American Affairs (CAAA) and as Co-Chair of WA SECTF, talked about the assistance grant as a tool for general training and support for applicants “with zero experience running a business” let alone in a sector as regulated as cannabis. She argued that an existing license holder like Brice would want to use assistance grant money in a different way “than someone who has no industry experience that might get a license because of their impact from the war on drugs” (audio - 7m).
      • Later in the meeting, Slaughter commented that WA SECTF staff were coordinating with WSLCB and Commerce representatives “to figure out a way that there won’t be a conflict of interest.” She said it was possible state officials would decide to issue “a statement or promise that there will not be a conflict” between participating in WA SECTF events and joining the mentor roster. Nielsen promised to bring the topic back to Commerce leadership.
      • A WSLCB spreadsheet of final orders for license violations between May 2013 and April 2021 showed Happy Trees received a $2,500 monetary penalty for an advertising violation in April 2019.  
    • Brionne Corbray, a former dispensary owner, inquired about the best way to be included as a social equity applicant, saying his family and business had been directly impacted by enforcement of cannabis prohibition. “Because the way the state works, they’re not- it’s hard to trust them after they’ve done something like that to you,” he said (audio - 5m). 
      • Slaughter replied that “attending these meetings, seriously, by having your voices heard is gonna give the direct impact...a say in these recommendations process.” She compared the work group’s guidance as “a recipe” for Commerce staff “so that they don’t have to do the, the heavy lifting and the thinking on their own.” WA SECTF members should be voting to recommend “the most equitable way to...issue these grants,” she said, commenting that WSLCB could choose to organize “an outreach, sort of, campaign to get the right target audience to apply.”
      • Corbray shared his story as part of the 2020 documentary, “Black Dreams, Green Nightmares: The Modern Day Lynching of A Black Man.”
    • Peter Manning, a member of Black Excellence in Cannabis (BEC), said the group had started in 2014 after he and others had “noticed that there was a problem with no Black people, or Brown people, inside the cannabis industry in the state.” BEC started under a different name, and had been "fighting since 2015" for a more diverse and inclusive licensee base, he stated. Manning believed the work of BEC members was the reason WA SECTF had been established, and as “a professional weed grower” he had worked “for the inclusion of Black people from day one.” He suggested the law creating the task force and social equity program happened when "Paula Sardinas got on deck with us and made that happen" and that BEC leaders “should get a little bit more respect from the Black community” for their “involvement in this” (audio - 5m). 
    • Aaron Barfield, BEC Co-Founder, asked about the mentorship program and whether there would be “criteria or goals set...is there going to be any kind of metrics for tracking the success of this program?” Berkely responded that the roster was “in its infancy stage” but those questions could be part of the final recommendations. Hollingsworth agreed on the need to evaluate outcomes from mentors and Slaughter opined on several methods that could be used in evaluating grant applications and the work group’s role in offering members of WA SECTF guidance. Hoff found the statute clear on who qualified for grants, adding that since “one of the things that folks can use their grant for would be to help them develop their social equity plan which is something that you have to have when you submit your application. So that implies to me that potentially somebody could be a successful recipient of a grant before they get a license” (audio - 7m). 
    • Sardinas argued it was “technically not correct” that mentors had to be cannabis licensees following the last change to statute by passage of HB 1443, which she said allowed for Commerce officials to “contract with folks that have specific experience.” She described “two tracks for technical assistance” (audio - 2m):
      • “There’s a track for people that are in the process and have a license” and already had a social equity plan, she said. “There’s a law that prohibits the gift of public funds so we have to figure out how to provide that assistance,” Sardinas stated, calling it “very technical work.”
      • The other track was “for people to provide the education, which means that you may be applying for a technical assistance grant” and so “someone that knows the business that can work with folks to help them go through either the regulatory framework or the licensing framework so that they can then get a license.”
    • A man named Dom wanted to know how the amounts of money given out in assistance grants would be determined. Sardinas stated that guidance would be in the wheelhouse of the work group, that there was “no statutory amount” though there were “some caps that Commerce would have to impose.” A point of reference she used was business microloans which were, “somewhere between $50[,000] and $25,000” but speculated that with a “risk-assessment model you might need a two-times or a three-times multiple for cannabis.” A choice would need to be made of whether “you take that dollar amount and you divide it by the number of licenses and that’s your max grant, or do you say ‘ok, to be equitable, to try to help the greatest number of people for the greatest good we’re going to cap grants at $50,000,’” she observed (audio - 3m).
    • The council then heard a presentation on Lessons Learned from Other State Social Equity Programs before concluding. The next meeting of WA SECTF was scheduled for May 25th and the next TA and Mentorship work group meeting was planned for June 8th.

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