The Week Ahead
(August 26, 2019)

Here’s a look at the week ahead.

TUESDAY: On Tuesday August 27th at 10am PT @ WSLCB, the weekly Board Caucus recurs.

WEDNESDAY: On Wednesday August 28th at 1:30pm PT @ WSLCB, the three-member Board and agency leadership convene their weekly Executive Management Team meeting.

FRIDAY: On Friday August 30th, expect the WSLCB to publish draft conceptual rules for the Cannabis Penalties rulemaking project. The agency previously considered scheduling an initial Cannabis Penalties listen and learn forum for the afternoon of Thursday August 29th, but that session was postponed to follow the release of draft rules.

The Cannabis Penalties rulemaking overlaps the True Party of Interest (TPI) rulemaking, potentially sharing new definitions for previously undefined terms such as “control.” A draft of the proposed TPI rule changes was accidentally released on Monday August 12th. The formal definition of “control” at that stage of the drafting process (August 8th) was:

…the direct or indirect power to order or direct the management of policies of a licensee, whether through an ownership interest or otherwise.

During the Board Caucus on Tuesday August 13th, the day after the accidental publication, Board Member Russ Hauge and Director Rick Garza shared observations from the de facto private meetings of the Cannabis Penalties and TPI work groups which convened on that Monday and Tuesday respectively. Agency leadership expected “substantial rewrites” of the penalty matrix and fresh examination of the agency’s internal policies for validating compliance with TPI rules when vetting operator financial instruments. Two days later on Thursday August 15th, Cannabis Policy and Rules Coordinator Kathy Hoffman announced a two-week delay to help ensure “that these rules not only align with the spirit of the legislation that guided these changes, but goes the extra mile to support our licensed community.”

The consistent convening of WSLCB stakeholder work groups to inform the drafting of rule changes prior to proposal as a CR-102 is an evolution of the agency’s rulemaking process similar to the introduction of listen and learn forums by Hoffman. It is Cannabis Observer’s understanding that the licensed community is represented in the Cannabis Penalties and TPI work groups by particular trade associations, their lobbyists, and attorneys. While the meetings of the work groups have been closed to the public and their work products have not been intentionally shared by the agency, work group progress has been consistently summarized in public contexts – another agency innovation credited to Hoffman.

We may find that a private, pre-proposal process results in a superior CR-102 work product being filed with the Office of the Code Reviser prior to the public hearing necessitated by the Administrative Procedures Act. However, the Cannabis Penalties and TPI rulemaking projects were opened in late October and early November 2018 and their scope of work was subsequently expanded to incorporate the legislative disruptions embodied in SB 5318, the enforcement restructuring bill written into law on May 13th. The work groups provide a context where communication of varying perspectives can occur for deliberation on, and negotiation of, desired outcomes. Presumably, that is hard work and the balancing of interests may be obscured in the work product the public finally gets to see.

Would a more transparent work group process help? Visibility into the deliberations of the work groups could minimize subsequent rehashing of debates that may have already been heard and resolved to the satisfaction of invited parties. Is it reasonable to assume a pre-proposal work group process disincentivizes the agency and work group stakeholders from wanting to re-open those debates? Does consideration of the resulting work product provide sufficient oversight to enable the regulated community to independently evaluate the performance of its representatives? And how are perspectives of members of the regulated community who do not support a trade association considered prior to the public hearing? For example, are written comments presented for consideration by the work group?

We can begin to consider these questions more tangibly on Friday when the Cannabis Penalties draft conceptual rules are scheduled for release.

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