WSLCB - Board Caucus
(August 11, 2020) - Summary

16 of 29 federally-recognized tribes in Washington had established cannabis compacts with the State as the WSLCB reviewed revisions to its government-to-government consultation policy.

Here are some observations from the Tuesday August 11th Washington State Liquor and Cannabis Board (WSLCB) Board Caucus.

My top 3 takeaways:

  • Outgoing WSLCB Policy Analyst and Tribal Liaison Brett Cain led a session reviewing updates to the “Government-to-Government Consultation, Coordination, and Planning Policy” developed to guide agency interactions with sovereign tribal governments.
    • Cain told board members that agency staff worked to “modernize the policy” with tribes ”throughout the last year” (audio - 13m).
    • Board Chair Jane Rushford asked Hauge for his perspective on the policy updates.
      • Hauge viewed the changed policy as memorializing “a really fundamental obligation we have” as a government institution working with sovereign tribal nations. He said an understanding emerged that the prior version of the document "didn't reflect what the current state of affairs was" and had become “basically perfunctory.” Hauge said that the policy was “not a dispute resolution process" but rather one WSLCB should implement "at the very beginning of any action that we take that might impact" any of the tribes in Washington.
      • Hauge stressed that the updates weren’t intended to “impact any of the existing compacts or agreements that we have with any of the tribes” nor any dispute resolution processes. The revisions would put “everyone on notice, including ourselves, that we have to be mindful of the actions that we take” to actively include “our tribal partners.”
    • Rushford asked what changes had been requested by tribal leaders: “were there any changes that are significant to the draft that we have?” 
      • Hauge remarked that several commenters “misunderstood” the purpose of the document, confusing it with formal rules governing the TAC. Some tribes were concerned that the policy would alter their compact or liquor memorandum of agreement (MOA), particularly around dispute resolution. “To respond to that we took out pretty much all reference to dispute resolution, hoping that this will be...a clearer statement of our obligation to reach out.” 
      • Cain added that several tribes wanted “to see some specific acknowledgement in the document that the licensing decisions that the agency takes around or even in tribal reservations, in Indian country, presumptively effects those tribes and that we need to recognize, formally recognize, that the decisions that we make as an agency regarding non-tribally owned or even tribal member owned businesses” required WSLCB to “work with and engage with tribes prior to making those decisions."
    • Rushford lauded Cain and Hauge’s work, observing that the Board “so greatly appreciate and respect our government-to-government relationships.” Board Member Ollie Garrett thanked Cain for his time at WSLCB, with Rushford adding that he’d been “a wonderful partner and an outstanding professional in so many ways.”
  • An emphasis on avoiding disruptions to established dispute resolution processes encoded in cannabis compacts may have been related to a long-running---and recently settled---disagreement with the Suquamish Tribe over the collection and return of tax revenue.
    • On May 22nd, a revision and extension of the Suquamish cannabis compact was approved by the Tribe and the State. At that time, Cain said the revised compact included “clarification under the State taxes section of the document and an extension of the effective date of the compact to February 1st, 2030” (audio - 1m).
    • Cannabis Observer requested and received the revised compact as an addendum to a Confidential Settlement Agreement between the Suquamish Tribe, the State of Washington, and the WSLCB. The agreement was the culmination of a dispute resolution process that began in December 2016 when the Tribe filed “a notice of dispute and the Parties unsuccessfully attempted twice to mediate the dispute, and the Tribe then exercised its right to enter into binding arbitration proceedings.” In October 2019, “the Arbitrator issued an Interim Ruling and Award in the Tribe’s favor.” Section 5 of the Agreement describing the conditions for “Mutual Release” indicates the dispute arose “out of the Tribe’s claim that it is entitled to the state taxes collected by state licensees from retail consumers in transactions outside of Indian country where the Tribe had previously processed or produced the marijuana and sold it to the state licensee.”
    • Section 4 of the Agreement defines conditions for a significant settlement payment: “In exchange for withdrawing the arbitration and vacating the arbitrator’s Interim Award and other consideration as provided for in this Agreement, the State shall pay the Tribe a total of three million dollars ($3,000,000), plus interest as may be required herein.” According to the agreement, the first half million dollar payment was made on May 27th, less than a week after the revised compact was signed by the Board, Director Rick Garza, and Governor Jay Inslee.
  • At publication time, the State had signed cannabis compacts with 16 of 29 federally-recognized tribes in Washington.

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