WSLCB – Executive Management Team
(March 6, 2019)

Here are some observations from the March 6th WSLCB Executive Management Team (EMT) public meeting.

My top 3 takeaways:

  • WSLCB Director Rick Garza discussed the agency’s response to the Enforcement restructuring bills, SB 5318 and HB 1237 (audio – 15m).
    • Garza indicated that for the last month he had sought to understand legislation seeking to dramatically reform the agency, SB 5318 and HB 1237 (“Reforming the compliance and enforcement provisions for marijuana licensees”).
      • Cannabis Observer’s most recent coverage of SB 5318 documented the bill’s progress through its policy and fiscal committees to the Senate Rules Committee. SSB 5318 was scheduled and, on March 11th, passed by the Senate with one amendment.
      • Cannabis Observer’s most recent coverage of HB 1237 documented the bill’s progress through its policy and fiscal committees to the House Rules Committee. On March 11th, 2SHB 1237 was placed on the House calendar for its second reading. To continue, it must be voted out of its chamber of origin by Wednesday March 13th at 5pm.
    • In mid-February, a group of lawmakers signed a petition to Governor Jay Inslee that alleged a “toxic culture” at the WSLCB and called on the Governor to rescind his appointment of Russ Hauge to the Board. Garza said he had met with every lawmaker who had signed the petition as well as other key legislators.
      • Agency leadership discussed the petition from lawmakers during the February 27th EMT.
    • Garza said, “What I’d share is that many of the members have been approached by licensees, and there were two issues of concern that led them to put the bill together.”
    • One concern was the cannabis penalty matrix, a concern which Garza told lawmakers was already being addressed in the open Cannabis Penalties rulemaking (WSR 18-22-099). Garza said he was impressed with progress on the draft rules by Policy and Rules Coordinator Kathy Hoffman and anticipated stakeholders would be recruited to provide input before the agency brought a CR-102 to the Board.
    • The second concern was questionable treatment of licensees by Enforcement Officers which called into question the “fairness” and “consistency” of the agency.
    • Garza said he saw both concerns as related and acknowledged they’d heard objections about treatment of licensees at other events. He felt, “It’s not inconsistent that legislators would hear it now.”
    • Garza shared the agency planned to hire an “independent consultant” to look at the problem and was putting together a Request for Proposals (RFP) that would function similarly to a proposed “legislative work group on cannabis enforcement and training processes and procedures” defined in SSB 5318 Section 10.
    • After inquiring about the makeup of the proposed work group, Hauge said, “There are legislators that signed a letter that never met me, and really have not had much to do with these issues. So I’m quite concerned that we’ve got a ‘last person that I talked to’ syndrome here.” Garza said there was enough of a “perception” problem “that we didn’t create” to merit working on some of the issues, but rejected the notion that the WSLCB had a “toxic environment or culture.”
    • Board Member Ollie Garrett mentioned an event where she’d noticed the licensees on the best terms with their officers looked “clean cut” leading her to wonder if “bias training” for Enforcement was warranted.
    • Hauge called it a “big, big issue” and asked if Enforcement Chief Justin Nordhorn’s division priorities reflected the Board’s concern. Hauge said, “We’ve got, if nothing else, a very big credibility gap that, unfortunately, the more I dig into things, I think is probably appropriate.
    • Garza said he’d met with representatives of The Cannabis Alliance, the Washington CannaBusiness Association (WACA), and a “union official” regarding an amendment to HB 1237 that would “take away the law enforcement authority of the officers.” The agency reached a compromise to remove that provision from the bill.
    • Garza and Enforcement Chief Justin Nordhorn hosted an hour-long webinar with the enforcement division which Garza described as “pretty candid and straight.” He characterized the prevailing attitude as genuine concern, rather than “defensive.”
    • Garza mentioned some licensees were running up against the three-year-window during which violations accrue towards license cancellation and specifically said 30 license cancellations were pending.
    • Board Chair Jane Rushford said the state’s “conservative approach” to legal cannabis had left “good reason” for pushback after five years, despite the fact the product remained federally prohibited. Rushford asked to be updated on the legislation before the next EMT meeting and confirmed Garza would resume a former practice of attending the Board Caucus on Tuesdays.
  • Rushford introduced a new “Division Priorities” structure for the EMT meetings and agency leadership described their respective foci.
    • Rushford believed the new meeting format would help the Board better understand and engage with each division within the agency, adding they’d “felt less than fully informed in the past few months” (audio – 1m).
    • Becky Smith, Director of Licensing and Regulation, said her department’s priority was “education and training” (audio – 6m).
      • Smith said, “Having consistent training is important so we’re all saying the same thing.” She claimed 10 new employees and two new managers with a third soon to join.
      • Smith mentioned development of a “ringlet” for officers in the field that included answers to common licensee questions about alcohol privileges, forfeiture of marijuana licenses, and discontinued/temporarily discontinued licenses. The ringlet would be updated with new rules.
      • Garrett asked if there was truth to comments that officers were learning answers from licensees rather than the agency. Smith said she and staff were on a second round of visiting regional enforcement offices to be sure officers “know who to contact, and know, be aware of the rule changes.”
      • Garza observed, “as many rules changes as [Board Members] are making, it happens where they miss it.”
    • Brian Smith, Director of Communications, noted various projects he was involved in (audio – 4m).
      • Smith first mentioned the traceability project. He said MJ Freeway Leaf’s next release, 1.37.5, had been rescheduled for June 4th. At one point, release 1.37.5 had been contracted for launch on November 6, 2018. Smith explained his office would work with the vendor to tell licensees “what is in it, what’s changed, how it’s going to work” using web videos. He reported fielding a series of media inquiries about traceability requiring that he “round up some input from other experts around the agency.”
      • Smith shared that leadership of the Organizational Change Management (OCM) project had been transferred to him and was “ready for a rollout and completion by April 30th.” Smith admitted he had little experience with OCM but nonetheless felt it “ties well with the communications and the way we think around here when we’re planning ahead.”
      • Smith was working with Hoffman on the Quality Assurance Testing and Product Requirements rulemaking (WSR 18-17-041), a “big issue” requiring communication with labs, licensees, and the public. This rulemaking was discussed during the January 23rd EMT.
    • Megan Duffy, the recently-hired Deputy Director, said her top priority was “herding what needs to be herded” for the traceability release. Asked how confident she was that the release would be delivered on schedule, Duffy admitted she was “overly optimistic just by nature” but demurred to “mid-range” confidence (audio – 1m).
    • Garza relayed comments from Enforcement Chief Justin Nordhorn, who wasn’t in attendance. Nordhorn’s top priority was “operational analysis of actions and developing action plans to address gaps.” Garza said Enforcement’s secondary priority was communication between headquarters and field offices. There was agreement that Deputy Enforcement Chief Steve Johnson was contributing significantly to this effort (audio – 1m).
    • In addition to leading discussion about the Enforcement restructuring bills, Garza told the group SB 5296 had been pulled from further consideration. The bill, sponsored by Senator Karen Keiser, would have granted greater alcohol rulemaking authority to the WSLCB. SB 5296 was last publicly discussed at the February 26th Board caucus.
  • Agency leadership discussed a new “Work Session” meeting format and agreed to focus on “Enforcement” during the next EMT meeting on March 20th (audio – 14m).
    • A consensus emerged that the group had broadly discussed enforcement already, but recent events justified a deeper dive. There was agreement that rulemaking and legislative processes were progressing with sufficient speed to merit the Board’s continued focus
    • There was a request for Nordhorn to gather information regarding complaints levied against the agency. Hauge called it, “a good dry-run for what we do next.”
    • Rushford reiterated she wanted a “progress oriented discussion that engages all of us” rather than “reporting out” updates. She asked Garza to lead the enforcement work session.

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