WSLCB - Executive Management Team
(February 8, 2023) - Summary

WSLCB - Executive Management Team (February 8, 2023) - Takeaways
[ Event Details ]

Leaders touched on several bills concerning cannabinoid regulation and “inactive” producer licenses in addition to a favorable court ruling and social equity program updates.

Here are some observations from the Wednesday February 8th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) meeting.

My top 3 takeaways:

  • Director of Legislative Relations Marc Webster talked about progress around cannabinoid regulation legislation drafted by the agency—including a costly fiscal note—and Director of Policy and External Affairs Justin Nordhorn gave his impression of several other cannabis-related bills before lawmakers.
    • Regarding their request bill HB 1612 (“Concerning the regulation of products containing THC”), Webster reported that Lacy Fehrenbach, Washington State Department of Health (DOH) Chief of Prevention, had been “really helpful in giving…some supportive testimony.” He shared that “both the cannabis and hemp industries remain very concerned about the THC threshold that's in the bill, but they remain split on what to do with it. Hemp would like that threshold raised, while the [legal cannabis] sector wants it dramatically reduced, or even brought to zero.” Webster added that he would be investigating the reason for a “very, very high fiscal note from the state patrol” (audio - 1m, video - WSLCB, video - TVW).
    • Nordhorn’s update touched on several bills the agency was involved in including HB 1612 and SB 5367 (audio - 8m, video - WSLCB, video - TVW).
    • Director Rick Garza called attention to SB 5377, “Concerning cannabis license ownership,” which was scheduled for a public hearing the following day on February 9th. He claimed the proposal empowered the board to cancel and reissue unused cannabis licenses, “producers specifically,” if the business wasn’t “using their license or they're not operating.” He specified how the “bill would say [any producer’s license] after July 1st, 2021, if there's no activity, you have to give up the license” (audio - 3m, video - WSLCB, video - TVW).
      • Garza seemed to conflate the impacts of SB 5377 and SB 5080, “Expanding and improving the social equity in cannabis program.”
        • The bill analysis of SB 5377 indicated WSLCB staff would be empowered to “suspend” producer licenses designated as “inactive” - but when federal changes in cannabis law were adopted, those licenses would be reactivated. No changes to license ownership were envisioned in the bill.
        • By contrast, the proposed substitute language adopted for SB 5080 allowed “up to 100 cannabis producer and 65 cannabis processor licenses that have been subject to forfeiture, revocation, or cancellation by the Liquor and Cannabis Board (LCB) as licenses authorized to be issued or reissued under the Social Equity in Cannabis Program.”
      • He asked Director of Licensing Becky Smith how such a program would “impact the current situation for us.” She guessed agency officials had “over 200 producer processors…that we've received their license back, either voluntarily, or they've been revoked, or they've never been open and operating.” However, as the bill didn’t define what would count as ‘activity,’ the agency would be expected to determine whether producer licensees who were “paying their fees and aren't…growing anything” counted as active. “I don't know that the pool is that big to make an impact on the industry,” remarked Smith.
      • Smith further conveyed some concern among her team “over…making people grow.” She didn’t know if telling licenses to cultivate cannabis “when they're really waiting for whatever” was an enforceable practice.
      • Postman felt “we don't have a shortage right now. So…it doesn't help the sort of supply issue because we got plenty of supply.”
        • Subsequent to this event, a proposed substitute to SB 5377 was unanimously adopted by WA Senate LC members on February 14th the proposal was referred to the WA Senate WM where a hearing was scheduled for Monday February 20th.
        • SB 5080 was heard by that committee on February 13th. On February 14th, Webster described the hearing as positive, and that WA Senate WM members “really got a sense for why it's important." An executive session on SB 5080 was included on the agenda for February 20th.
  • An approaching social equity retail license application window meant staff were finalizing educational materials, the subject was receiving increased engagement in the agency’s online platforms and media outreach, and the board was deciding how to track licensee success long-term.
    • Smith last updated the group on the social equity program on January 25th.
    • In the EMT, Smith gave specific details about the social equity program which was set to open a 30-day application window starting March 1st (audio - 4m, video - WSLCB, video - TVW).
      • Washington State Department of Commerce (WA Commerce) staff were finishing a third-party contract “with their chosen facilitators,” along with “writing up contracts for 24 to 26 mentors for technical assistance for the mentoring program.” She described a partnership with WA Commerce officials to “ensure applicants will be able to easily sign up and access the mentor program when it becomes available.”
      • MakeGreenGo! webinar trainings for prospective applicants were available online, Smith commented, and staff had counted 365 attendees and 625 chat messages, which was “considered high engagement.” The recording would be “posted all the way through the end of March,” said Smith, and her team would be updating the question and answer page as well.
      • Disproportionately Impacted Area (DIA) maps had been revised to add more neighborhoods as outlined in her January 25th comments which “increased the number of census tracts that qualify as disproportionately impacted areas by increasing the threshold from 20% to 30%.” Internal training for enforcement and compliance staff had been conducted on January 23rd, Smith added. She promised additional information about map changes would be addressed during the February 15th Board Meeting.
    • Smith went over discontinued businesses, with 219 alcohol licensees discontinued, and three cannabis businesses, telling the group “almost all of these were just lingering, expired licenses that now are off the books.” She was happy because getting them discontinued had “a lot of benefits” including “preparing ourselves for the systems modernization project as well” (audio - 3m, video - WSLCB, video - TVW).
      • Postman pointed out that regulators had encountered licensees who “never really seem to get up and running” and asked “how do we get alerted to that?” Smith responded that “there's not a red flag that goes to licensing” if a business wasn’t open or active, explaining that “sometimes we hear from customers or other licensees that they're not open and operating. But if they're paying their fee and…they're meeting all of the requirements, we wouldn't necessarily hear from them” (audio - 4m, video - WSLCB, video - TVW).
        • Board Member Ollie Garrett asked about “a process and at one time we knew everyone that wasn't open and we were keeping in communication to make sure that there were legit reasoning.” Smith said that was for retailers only, but her team “tracked by sales” reporting.
        • Board Member Jim Vollendroff thought that being able to track the active status of businesses would be useful for the board. 
        • Enforcement and Education Director Chandra Wax described the review of active retailers as a collaboration between her staff and Licensing “at the beginning of each month.” However, she cautioned that because of demands on Enforcement personnel, ”it's not something that can always be at the top of our priority list” or could always be done “in this detail.”
    • Director of Communications Brian Smith indicated that the communications plan around the equity program was underway; the responses he’d seen were “really positive about this stuff.” He offered an example that in “November, views on our social equity and cannabis section of our website was at the 31st out of about 400-500 sites, which I said” was positive since “this is a niche audience.” In January, their equity webpage was 11th, suggesting a “specific audience that's looking for something specific, and you've got enough people in the thousands that are going to that page for that information” (audio - 5m, video - WSLCB, video - TVW).
      • He’d surveyed webinar attendees and found:
        • 28% reported learning about the events via GovDelivery
        • 32% reported find out from the WSLCB website
        • 28% found out from “word of mouth”
        • 27% learned about the events “some other way”
      • Smith credited media outreach, mentioning a contact from the Seattle Medium whose staff had not previously “reached out to me on a news thing.” The newspaper publisher Chris Bennett also planned to schedule Becky Smith for a radio interview, he added, highlighting that Garrett had also been speaking to media outlets. She said her media appearances included programs “in the community, and all of these are coming from where we were hearing before no advertising was done to get word into the community and everything has been positive.” Smith agreed that for social equity coverage “all these things that we're hearing are really positive stuff.”

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