WSLCB - Executive Management Team
(October 12, 2022) - Legislative Affairs and Policy Discussions

Board members heard legislative updates, mentioned special guests attending upcoming caucuses, and discussed how to achieve prevention of 100% of retail sales to youth.

Here are some observations from the Wednesday October 12th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team (EMT) Public Meeting.

My top 3 takeaways:

• Outgoing Director of Legislative Affairs Chris Thompson talked with board members about a legislative work session planned for December, a state review of cannabis appropriations, and participating in a panel discussion with legislative staff.
  • Thompson, whose retirement from WSLCB was announced on August 30th, acknowledged there was “no news" on agency request bills from the Washington State Office of Financial Management (WA OFM) or the Governor's office. “We haven't had questions or inquiries from them,” he noted (audio - 1m, WSLCB video, TVW video).
  • Looking ahead to a December 2nd Washington State House Commerce and Gaming Committee (WA House COG) work session, Thompson anticipated there would be “a little bit further refinement” as “staff had not yet conferred with the committee chair about further focus of the presentation.” He suggested the subject would be “regulatory and enforcement activities related to cannabinoid products, including products containing delta-8-[tetrahydrocannabinol] THC or other cannabinoids that are synthetically derived from hemp.” Thompson anticipated a response to their request legislation by then, and planned to “share some detail with the committee” and hear their thoughts on the proposals ahead of pre-filing for the 2023 session in December (audio - 3m, WSLCB video, TVW video).
    • WA House COG Chair Shelley Kloba talked about her philosophy and cannabis issues she expected the committee would hear about at a Cannabis Alliance summit on October 1st. She spoke of “work on protecting the integrity of the product and the industry, and the way we're going to do this…is to make it abundantly clear that synthetically derived” tetrahydrocannabinols (THC) have “no place in the market.” Her belief was that the agency needed to validate their authority to “do enforcement outside of the regulated market” and 2023 request legislation could help maintain that ability.
      • Kloba was the prime sponsor of the WSLCB request bill on cannabinoid regulation in 2022, HB 1668.
    • Postman also figured there would be approval for the request bills by that time, and thought the settlement with licensed processor Unicorn Brands LLC over creation of synthesized cannabinoids should be communicated to legislators given “we've always gotten a lot of questions from members…and let's go ahead and answer them up front” (audio - 1m, WSLCB video, TVW video).
      • The WSLCB Cannabinoid Regulation rulemaking project was withdrawn on September 14th after concluding “additional definitions related to the production and/or processing of cannabis…should be introduced through legislation.”
      • On October 3rd, the agency announced the formation of a Cannabinoid Science Work Group which would “collaboratively and transparently explore and build foundational understanding of the ‘. . .plant of the genera Cannabis, as well as synthetic equivalents of the substances contained in the plant’ (see RCW 69.50.204(c)(30)).” 
    • Director Rick Garza discussed how he’d gone “last week to meet with [Kloba] and kind of walk through our proposed legislation…and she's very very comfortable with it.” He was ready to adjust their bills to legislators’ requests, indicating “I think they’re interested in” enforcement around “the delta 8 products are out in the private market and…an update of where we are with that.” Garza then said it was a chance for officials to “share with the committee…the meat of the new THC bill” (audio - 2m, WSLCB video, TVW video).
      • Thompson thanked Garza for touching base with Kloba and relayed how there’d been “a question from her about our proposal and I answered her question without going a lot beyond that.” He anticipated bringing “our enforcement division in the planning meeting. We'll need to bring in folks involved with the development of our legislative proposal, obviously our communication director” Brian Smith, and others “pretty soon.”
      • On October 24th, WSLCB published procurement information for a “One-year Contract with Orange Photonics, Inc. to provide Light Lab 3” Cannabis Analyzers. The analyzer modules include the ability to test for delta-8-THC and other minor cannabinoids.
    • Vollendroff recalled the legislative process during his time as an official with the King County Department of Community and Human Services, noting staff shared talking points because they recognized “not everybody can talk to just anybody, but people do talk to constituents…using high concentration THC products as an example, or Delta 8…what is our position on that? Where do we stand on certain things.” He encouraged Thompson to “consider…some fact sheets, or some elevator speech, talking points, whatever you want to call it.” Thompson agreed, and offered, “we did put together a statement of need that addresses a lot of these kinds of issues and topics so we have some things to work with” assuming the request bill was approved to offer for sponsorship (audio - 2m, WSLCB video, TVW video).
  • “The Joint Legislative Audit and Review Committee is starting a study,” reported Thompson. It had been mandated by SB 5796 ("Restructuring cannabis revenue appropriations”), he noted, which was “substantially revised along the way” resulting in a review of “appropriation and expenditure of cannabis revenues” to be summarized in a “report to the appropriate legislative committees by July 1, 2023.” JLARC staff had communicated with WSLCB representatives, Thompson told the board members, and he would be scheduling a meeting so they could start “to assist them with their project.” He stated they would be looking at whether the appropriations were “consistent with law, whether information about…these topics is readily available to the general public, and…whether there are ways to enhance or increase the transparency and accountability” around them (audio - 2m, WSLCB video, TVW video).
  • Thompson added that he’d presented “a couple of weeks ago” to the Legislative Staff Academy, an annual meeting for legislative assistants and caucus staff. He’d been on a panel with WA House COG staff about “cannabis, 10 years later,” and offered to find a recording of the event for those interested (audio - 1m, WSLCB video, TVW video).

• Director of Communications Brian Smith went over two caucus guests specializing in cannabis policy the board would hear from in November, including the author of Washington’s legalization law (audio - 4m, WSLCB video, TVW video).
  • Smith said he was “looking forward to” the November 1st caucus because “in November of this year is the 10th year anniversary of the passage” of Initiative 502 (I-502) and lead-author Alison Holcomb would be joining to talk about the impact since voters passed the measure in 2012. He remembered “where the agency was following passage” of Initiative 1183, which privatized liquor sales and initiated the sale of formerly state-run liquor stores. “We had to lay off a thousand people” after that initiative passed, he observed, and a year later I-502 was assigned to the agency. The November 1st caucus would involve “a look back, there's some things planned” for conversation with Holcomb, whom Smith called “a very forward thinker and…that could be engaging conversation.” He anticipated more media interest as it got closer to November.
    • Holcomb led the I-502 campaign, called New Approach Washington, while serving as the Campaign Director for Criminal Justice and Drug Policy Reforms at the Washington Chapter of the American Civil Liberties Union (ACLU WA). After the success of I-502, in 2017 Holcomb worked at Action Now Initiative, a Texas nonprofit organization supporting “the mission of Arnold Ventures to maximize opportunity and minimize injustice through social welfare, public service, political advocacy, and social impact activities.” She then returned to ACLU WA as the group’s Director of Political Strategies.
    • Studies of alcohol privatization in Washington state include:
      • Washington State Privatization of Liquor: The Impact of Initiative 1183 (2015)
      • Impact of Washington State Initiative 1183 (2015)
        • Authors include WSLCB Public Health Education Liaison Mary Segawa and Affiliate Instructor in Epidemiology at the University of Washington (UW) Julia Dilley, who briefed board members on a multi-state study of the effects of policy frameworks on cannabis use prevalence and public health in September 2018. She also spoke at a UW Addictions, Drug, and Alcohol Institute (UW ADAI) Symposium on September 16th, and has been invited to address the board about the anniversary of I-502’s passage on November 8th.
      • Washington's privatization of liquor: Effects on household alcohol purchases from Initiative 1183 (2019)
      • Washington’s Liquor License System and Alcohol-Related Adverse Health Outcomes (2020)
  • Smith announced the agency would host University of Waterloo School of Public Health Sciences Professor and University Research Chair David Hammond on November 8th, whose work Smith previously mentioned. Hammond would speak “with regards to cannabis and there’s gonna be a conversation” around his research, Smith stated, as well as “communication to the public in advance and following some of the findings” from Hammond’s study on cannabis consumption. Smith anticipated getting to learn about “usage, where people get it…the kind of stuff that they're using, are there any trends, that type of stuff.” He commented that he would also line “up various people that could talk to various aspects of the report…so that's not just coming from me.”
    • Hammond presented a keynote speech at the UW ADAI Symposium.
    • Later in the meeting Director Rick Garza added that on November 8th former WSLCB acting chair Merritt D. Long would meet with the agency management team. “Just talking about the book that…he wrote “My view from the back of the bus,” Garza welcomed “board members and staff to join us for that if they'd like” (audio - 2m, WSLCB video, TVW video).
  • A subsequent announcement on the planned series of ten year anniversary guests noted the November 15th caucus would include a panel of selected cannabis industry representatives.

• WSLCB leadership also discussed medical endorsements, a symposium on high concentration cannabinoid products, and restricting youth access to cannabis.
  • Justin Nordhorn, Director of Policy and External Affairs, explained that “we're making some progress on some of our medical cannabis efforts” (audio - 5m, WSLCB video, TVW video):
    • Nordhorn talked about outreach around medical cannabis with the board on August 10th.He indicated staff were “drafting educational materials for licensees, trying to inform folks about the importance of maintaining the standards within the medical endorsements area. We've worked with Department of Health to get their take so that we're on the same page with them and their program,” and the materials would be “out in the near future.”
      • Check out a WSLCB map of endorsed stores and additional tax information related to medical endorsements from the Washington State Department of Revenue.In an October 25th Medium article published by the agency, Nordhorn rhetorically asked “Have you ever wondered where all the medical cannabis patients have gone, and why we do not see more qualifying patients visiting licensed stores?” It endeavored to better educate budtenders and medically endorsed staff on advising patients around appropriate cannabis products.
      “A student at a university that is working on their master's program that was looking for” topics had picked “research around the medical cannabis area, and surveying not only patients but retail stores about different practices.” This could give officials the chance to better understand ”some of the trends that are being shared with us anecdotally,” he added.
  • Turning to the UW ADAI Symposium, Garza stated that he, Board Member Jim Vollendroff, and “several of the staff” were in attendance. “It was on high THC [tetrahydrocannabinol] cannabis,” he explained, remarking that “we did a debrief last week that maybe, Jim, you could share what you gained from that and…anything that we learned there that we should consider with respect to policy, rules, or legislation (audio - 1m, WSLCB video, TVW video).
    • “We had good representation,” Vollendroff noted. Aside from Garza and himself, Deputy Director Toni Hood was present at the campus where it was hosted while Nordhorn and Policy and Rules Manager Kathy Hoffman attended remotely (audio - 3m, WSLCB video, TVW video).
      • Vollendroff shared that Gillian Schauer, a UW Researcher and the Cannabis Regulators Association (CANNRA) Executive Director who also presented at the event, participated in the agency debrief. He predicted that “we can expect innovation” and that “things that we are facing relating to delta-8[-THC] and high concentration THC and innovation are gonna [do] nothing but continue.”
      • Vollendroff found the speech by Jonathan Caulkins, Professor of Operations Research and Public Policy at the Heinz College of Information Systems and Public Policy at Carnegie Mellon University (CMU), “highlighted that while high concentration THC products are something for us to be…concerned about, there are probably four or five other things that he finds even more compelling for us to be thinking about.” Cannabis concentrates “makes the list of the top 10 [concerns], but it's not number one on the list,” he said, adding that he was considering hosting sessions where staff listened to recordings and discussed some of what was presented.
        • Caulkins was scheduled to present a keynote speech at the Washington State Prevention Summit on November 9th.
      • Moreover, Vollendroff considered the event to lend “itself to our conversation earlier about community involvement and conversations with community and one of the things that we talked about when we debrief is how do we engage more with our licensees, and producers, processors, getting them to the table and identifying what some of our common goals are and where we need to work together.” He was open to helping facilitate “listen and learn sessions if people are interested in having some sessions with some of the topics that were presented.”
  • During an update by Enforcement and Education Director Chandra Brady, she said “we've been doing things a little differently” on compliance checks around not selling to youth. Officers had been randomly “selecting and assigning our locations for compliance checks as opposed to…officers selecting them. We've been selecting them just to make sure that we are being attentive to the equity issues as well. And so what we expected to see was potentially a small drop in the compliance rate and that's kind of, it's kind of what we're seeing. We don't have enough long-term data to see whether that's in fact the case, but it looks like over the last two months that is what's happening” (audio - 17m, WSLCB video, TVW video).
    • WSLCB Enforcement staff reported retailers had a 95% compliance rate stopping attempted minor access to licensed cannabis stores in May 2022, and none had been allowed in stores during premises checks in August, though Brady indicated that month had a low number of checks.
  • Vollendroff delved into WSLCB “benchmarks” for retail compliance in not selling cannabis to those under 21. With a background in public health and substance use prevention, he was “really curious about our benchmark and what we're actually hoping to accomplish versus what we actually see” (audio - 9m, WSLCB video, TVW video).
    • Vollendroff was further curious about “if we, you know, find compliance at, you know, 70% or whatever, for example, what's our estimation of how many sales are actually happening to a minor that we don't find or don't catch?” Vollendroff felt “that seems like it's a…fairly high number, and…I think sales to a minors are 100% preventable…given the right set of circumstances.” He encouraged planning a discussion about “what would 100%...no sales to minors look like? And what is our benchmark…because I'm kind of alarmed when I see these numbers.”
    • Brady acknowledged Vollendroff’s concerns as valid: “it's alarming when you think of it.” She was willing to follow up with Vollendroff after collecting more information, explaining “there's a study and it's a standard and that's why we do it this way.” As for a benchmark for WSLCB, Brady said, “what we want to see as an outcome for youth access” was “a hundred percent success….what we want to see from the industry when we're measuring this is zero sales to minors. Our goal is public safety, therefore our goal is zero sales to minors.”
    • But she qualified that compliance checks were “measuring for our staff performance, it is how many checks are conducted,” Brady stated, often reminding ”our staff that our work is doing the checks; it's the industry's work to prevent youth access, that's their responsibility.” Through this lens, she felt low compliance rates reflected a failure on the part of licensees, not her staff. “While I do agree with that 100%, I do think we have a role to play on the policy side of things,” Vollendroff responded, “I feel like there are opportunities that perhaps we could help address some of those concerns, potentially.” Brady added that there was “follow up education” provided, as well as internal benchmarks, “we have high numbers some months…because some units will say each officer has to do seven of these each quarter, some units are by June, and so you can see that, ‘oh in June there was this many checks.’”
    • Board Member Ollie Garrett agreed with a goal of total compliance with not selling to youth, but felt the challenge was in part based on outstanding staffing needs, “and it's not that they are not trained, or committed.” She believed difficulties included “getting people in to fill positions, but the staff and whether it's our industry, whether it's the restaurant industry, or whatever, customer service has dropped, folks that are being hired don't care.” Garrett found that those filling service positions “are not the same type of employees that are there to protect and work with” customers. As the president of the business organization Tabor100, Garrett had seen “at those self-checks in the grocery stores, and on and on, and all of these new kids and people they’re having to hire just to have somebody to fill the shift….it's a struggle.”
      • Staffing challenges which predated the coronavirus pandemic appear to have been exacerbated since, leading to impacts on public services along with healthcare in Washington.
    • Board Chair David Postman suggested diving into the numbers at a meeting in November, wondering if Brady could provide “pre-pandemic alcohol compliance numbers” and compare them with recent years to see whether “the great resignation and quiet quitting and all the rest is impacting that.” He felt the whole board was “concerned about this” and did have “policy levers we can use” beyond compliance checks like looking for licensees repeatedly selling to youth. Postman added that compliance in this area “is one of the prime measures of protecting the public safety and health.”
    • Garza believed “an interesting thing is the recidivism rate has always been very low for alcohol, that they're not going to typically offend again within that two or three-year period.” The board members’ impression was that this may have changed. Garza knew anecdotally that two Olympia-area businesses were “basically just not accepting vertical IDs because they know that [when] we do our checks, we use vertical ID on those minors that go in there.” Brady promised to focus on youth compliance rates during the November 9th EMT.
      • News reports had noted the informal practice of rejecting vertical IDs had been used by Washington businesses for years.

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