WSLCB - Board Meeting
(September 27, 2023) - Summary

2023-09-27 - WSLCB - Board Meeting - Summary - Takeaways
[ Event Details ]

An update on retail social equity licensing preceded public comments that ranged from praise of the process to accusations of corruption and conflicts of interest.

Here are some observations from the Wednesday September 27th Washington State Liquor and Cannabis Board (WSLCB) Board Meeting.

My top 2 takeaways:

  • Staff brought board members up to speed on social equity retail license applications and responded to questions on scoring, available retail allotments, and the process by which 40 applicants advanced to provisional licensing.
    • Social Equity Program Manager Aaron Washington presented on the scoring and prioritization of applicants on September 13th, promising all successful applicants would be notified over the following two weeks. His presentation preceded comments of support and concern from citizens and a state lawmaker.
    • On Wednesday, Compliance and Adjudications Manager Nicola Reid explained that Washington was “speaking at a prior engagement.” After receiving completed applications from Ponder Diversity Group (PDG)—the firm responsible for reviewing and scoring applications for prioritization—she said “the double blind lottery has occurred, and the sealed results were delivered to the agency.” Now that all applicants had been sent a letter notifying them of their status, she planned to give an overview of “how many applications came in per jurisdiction, and what the highest scoring applicant was within that jurisdiction, and what the lowest scoring applicant was” (audio - 3m, Video - WSLCB, Video - TVW).
      • Sharing a chart with the number of retail allotments, applicants, and the highest and lowest scores, Reid stated “for King County, there [were] 125 applications for eight allotments. The highest score was 310, with the lowest score being 55…Please note that the lowest score isn't the lowest score who got through, but just out of the 125 applicants that did apply.” She also pointed out Snohomish County, where “there was 42 applications and that was for seven locations, with the highest score being 305, and the lowest score being 50.” Reid promised the data could be shared following the meeting.
        • At time of publication, the presentation hadn’t been added to the agency website, but a screenshot of the chart was saved.
      • Board Chair David Postman asked about the scoring for successful applications. Reid stipulated that applicants who’d been awarded allotments were “all pretty close to the highest score” in a county (audio - 1m, Video - WSLCB, Video - TVW).
    • Reid acknowledged three countries—Skamania, San Juan, Garfield—had no applicants, while Klickitat had only two applicants for four retail allotments (audio - 1m, Video - WSLCB, Video - TVW).
    • Postman requested Reid lay out the “mechanics” of the double blind lottery process used when there were more applicants than allotments (audio - 2m, Video - WSLCB, Video - TVW).
      • Reid explained that “each applicant was assigned a random identifying number by [PDG]. That random identifying number was then sent to [third party firm Kraght Snell] who we contracted to do the double blind lottery.” Kraght Snell used an approach she compared to “spinning the numbers, so…identifying numbers go to the lottery. They then assign another identifying number to each identifying number, then those numbers are randomized.” Using “fake numbers,” Reid suggested the company checked their system to “make sure that they're continuing to get…random scores when they do the lottery process. And so they go through a two-step verification with that. They then have the second set of random scores that are drawn, and they put them in order of how they were drawn.”
      • Postman reiterated that those doing the lottery never saw applicant names or businesses, just numbers. Reid added that “all the work is done with someone else who works there watching over the individual, and then the results were brought to us in a sealed envelope that had to be cut open, and the person who did the lottery had to witness us open the envelope, and then also notify the drawn applicants that they were drawn.”
    • Turning to application withdrawals, Reid told the board (audio - 1m, Video - WSLCB, Video - TVW):
      • “161 [were withdrawn] due to the applicant not meeting minimum social equity qualifications”
      • “254 withdrawn due to their rubric score not being high enough to proceed within the county that they had applied for”
      • “30 due to the applicant not starting the application process” despite repeated calls and emails to offer support
      • “Two were withdrawing recently due to not being the successful applicant in the double-blind lottery”
      • “Ten [retail] title certificate holders qualify to move within their county. One of these qualifiers did hold two title certificates.”
        • Postman sought confirmation that two title certificates were held by the same person (audio - <1m, Video - TVW).
    • Reid laid out title certificate locales, stating there were “two in Benton County, one in Clark County, one in Lewis County…two in Pierce County… and four in Snohomish County.” She said lotteries had been held “for one location in Snohomish County, and two locations in Clark County.” Reid affirmed that all successful applicants and lottery winners had been sent a preliminary letter of approval, and “all applicants have been notified of their application status per Ponder Diversity Group’s review” (audio - 2m, Video - WSLCB, Video - TVW).
      • Postman clarified that applicants were “eligible,” but not yet “license holders.” Reid said those who had been approved could now engage in the formal licensing process, adding “there is no timeline on finding a location and financing; or things of that nature; but of course due to availability within counties…the quicker you are able to secure a location or financing… could be a better approach if you're able to”  (audio - 1m, Video - WSLCB, Video - TVW).
    • Reid addressed how those challenging their application status were “given an initial appeal process which includes the email address and how to appeal” (audio - 2m,  Video - WSLCB, Video - TVW).
      • She indicated staff would “draft an official statement of intent to withdraw that will be emailed to the applicant and it will include all the information found during Ponder Diversity Group’s application review and supporting documents…If an applicant would still like to proceed with their appeal…they can just respond to the email and let the adjudications coordinator know that they would like to proceed.” Their application and supporting materials would be sent to WA OAG “Office of Administrative Hearings and then assigned to an Assistant Attorney General.”
      • Applicants were free to hire counsel but not required to, added Reid. Separate from appeals, some applicants had voiced interest in “obtaining their application file. We would be happy to get those out. The requests do need to go through public records, and they can be emailed at publicrecords@lcb.wa.gov." Reid relayed that staff were “looking at ways to make the scores more readily available so that you're not having to do a public records request and we'll be discussing this further today.”
      • Postman commented that since board members rule on appeals, anyone in that process should refrain from speaking to them about the matter. Otherwise, a board member might have to recuse themselves from that appeal, he observed (audio - 2m, Video - WSLCB, Video - TVW).
  • General public comments centered on the social equity applicant process and results, with several suggesting bias from WSLCB leaders and staff had already influenced results.
    • Luc Carlin (audio - 3m, Video - WSLCB, Video - TVW)
      • Carlin let board members know he was doing a “documentary series on this overall process, this ten year process.” A Seattle native, he was familiar with the state’s legalization process and “happened to go into cannabis reporting.”
      • Bringing up the subject of “conflict of interest,” Carlin alleged Garrett’s company PMT Solutions, which collected debt, targeted “debt specifically from cannabis companies. Or is that true? I want to confirm that.” He wondered “what do you guys think about that in terms of, is that really a good look, like it seems like a pretty big conflict of interest, right?”
        • Postman told him public comments were “not a Q&A session with the board…if you have things as you just said you don't know…that they're true, I'd rather you didn't share until you could figure that out.”
      • “I'm not trying to throw any shots to you, Ollie, at all,” Carlin insisted, even as he felt “this system here's a little bit…there's conflict of interest all across the board.” Acknowledging the difficulty in regulating an emergent industry, he praised the rollout of the social equity program, wishing success “but you guys do have a chance to…potentially make this shining example of what social equity could be which I hope to see,” and not “virtue signal, just show the rest of the country that we're not the only state that hasn't done social equity.”
    • Sekayi Perkins, Green Wall Street Owner (audio - 2m, Video - WSLCB, Video - TVW)
      • Co-Founder of the former Green Thumb Collective, Perkins said the progress on equity applications was a “milestone for the people of the great State of Washington." He thanked board members Postman and Garrett, agency and PDG staff, as well as FMS Global Strategies CEO Paula Sardinas, “for their expeditiously magnanimous duty in which was accomplished under [a] dire state of affairs.”
    • Sekani Perkins, Green Thumb Collective Co-Founder (audio - 4m, Video - WSLCB, Video - TVW, written comments)
      • Reflecting on a "long, tedious process that created an atmosphere of anxiety on both ends," Perkins thanked “all respective parties involved” and praised WSLCB “integrity, patience, transparency, and social responsibility throughout the duration” of the program. He believed the equity program had been “thoroughly developed with the conscientious effort of providing justice for the BIPOC community as well as the countless casualties that have been impacted by the War on Drugs.” Perkins said “individuals who were fortunate enough to get approved for their licenses reflect the liberal, progressive, and diverse society we have in the state of Washington.”
      • Praising the work of staff at PDG and his mentorship from FMS Global Strategies, Perkins had been reluctant to engage in the application process, but had come to consider it an “overall success.” Even for those who “may have not made it which…includes me,” he urged patience for WSLCB as “everything is a process.”
      • Both Sekani and Sekayi Perkins spoke at the Seattle City Council Finance and Housing Committee hearing on a city-level cannabis equity program in August 2022, and addressed board members that December.
    • Christopher King (audio - 5m, Video - WSLCB, Video - TVW)
      • King congratulated those who were advancing in the equity program. He then brought up "rather forceful” comments by “my adversary” Mike Asai, Founder of Emerald City Collective Gardens (ECCG), on September 21st to the Seattle City Council, and in particular Councilmember Kshama Sawant. Self-identifying as a former videographer for Sawant, King highlighted a 2017 video he’d produced to be “tongue-in-cheek after all of us got tired of her.” He complained that after marching in solidarity, Sawant got into office “and then she just bailed on us.” King appreciated Asai’s critical remarks, but argued they were too narrowly directed: “I think it's everybody, it's the whole system.”
      • Bringing up the hiring of Director Will Lukela, whose suitability King  questioned in previous public comments, King pointed to some of the records he’d received which were significantly redacted. “Basically…though the whole laundry list, I got nothing,” he said, adding that he was working with their public records staff to find out “why didn't I get these materials.”
      • Remarking on how long it was taking to complete social equity licensing since voters legalized the plant in 2012, King relayed several “pioneer” cannabis businesses that hadn’t gotten a license, specifically Kevin Shelton and Libby Haines-Marchel, saying the latter “passed and got it taken away” during a previous licensing lottery, “and then the law that got it taken away…was changed and then she still didn't get a license.” King summed up that he’d “sit back and watch; and I hope that we can get some answers here and keep on moving.”
    • Mike Asai, Black Excellence in Cannabis (BEC) Vice President (audio - 4m, Video - WSLCB, Video - TVW)
      • Noting his history with ECCG and the equity process at WSLCB, Asai disagreed with “attacks” on Garrett as “disrespectful, unnecessary, and it needs to stop.” He thought Garrett’s appointment by Governor Jay Inslee in 2016 was when there’d been vetting of relevant conflicts of interest. He was confident Garrett’s appointment to the board had been part of the “change here at LCB.”
      • Relaying some of his history with “lone soldier” and BEC President Peter Manning, Asai said that he “gave up” after being “forced closed by the city of Seattle via the State” during the merging of the medical and recreational cannabis market through SB 5052 in 2015. He continued working with Manning and “a very well-known lobbyist…Paula Sardinas, which in essence got the agency to do agency led” request bill on social equity, HB 2870, in 2020.
      • Asai blamed former Agency Director Rick Garza for “a lot of corruption. He did a lot of bad. He didn't care about the community whatsoever.” Asai suggested licensing amounted to “scraps” of the cannabis market, and still sensed "hiccups that have been going on" since Garza left WSLCB in May included allegedly letting details about equity program development at WSLCB be “leaked out to the White community.”
      • Asai wanted to see continued reforms within WSLCB, stating that “there's an issue there with…the rubric scores not being provided to applicants.” He expected board members understood and “probably didn't really fully know that and it's unfortunate because it's like you guys are…the scapegoat at times and that's unfortunate.” Nonetheless, Asai called on the board to “do better” going forward.
    • Peter Manning, BEC Co-Founder (audio - 4m, Video - WSLCB, Video - TVW)
      • Starting with “a rumor floating that I am somewhat trying to shut the program down. No, I merely asked that we take our time in considering how we look at the rubric points because there were some discrepancies in the point system and, I believe, there was corruption in data.” Knowing several people who got initial approval for licensure, Manning was “thrilled,” reminiscing about how when he first came to an LCB meeting in 2014, “it was hundreds and hundreds of White folks that are talking about how great the industry was and I was [the] only Black person” and felt “overlooked.”
      • He “discovered a couple weeks ago…a representative from Ponder Diversity Group was supposed to speak at an event, had that happened the program would have been scrapped.” This PDG staffer “was also scheduled for a job interview here within that same week…which I thought was a direct conflict with Ponder.” Assuring people that BEC would remain a “watchdog for the Black and Brown community,” Manning repeated that they were not attempting to stop the equity program. He insisted that “we were affected by the War on Drugs. We were given years in prison for less than an eighth of weed while our White counterparts were growing warehouses full of weed getting no scrutiny from anyone and we all know that.”
      • Manning asserted that “gatekeepers,” or those who had “been in positions of power to speak out and say something and Black and Brown people have gotten nowhere…the same ones that you haven't got anywhere with, those are the gatekeepers. Look at the ones that are making progress; those aren't gatekeepers because they're not scared to confront. Those are activists.” He wanted people to “get the blinders off,” claiming “just a month ago White retailers had a meeting in the Central District [of Seattle], predominantly Black area, to figure out a way to neutralize” BEC. Manning believed this was because “they don't want us to get a part of [the industry]. Come together, Black and Brown Community, get rid of gatekeepers, and join a movement.”
    • In closing, Postman commented that the WSLCB board and staff provided a forum with “broad leeway for people to speak during these four minutes…that's been the practice we have and we'll continue to do so.” However, he criticized “those that come and call themselves journalists and then throw things that they say in the same sentence are unsubstantiated, prove that they're not journalists, and I really wish people could refrain from those sort of attacks.” Postman wanted future public input to not “cast aspersions; over and over; and over again, which has been a regular part of these conversations now for years and it's unfortunate.” Public comments “helped us shape this program in the ways that some people today applauded…so it's got an important role to play,” Postman argued, but people should also be “respectful” (audio - 1m, Video - WSLCB, Video - TVW).

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