WSLCB – Executive Management Team
(November 14, 2018)

Regulators prepare for changes to medical cannabis, lab oversight, and canopy – plus WSDA signals increased commitment to cannabis!

Here are some observations from the November 14th WSLCB Executive Management Team meeting.

My top 3 takeaways (with a surprising bonus takeaway at the end):

  • Enforcement Chief Justin Nordhorn briefed the Board on WSLCB’s opportunities to adjust the marketplace for medical cannabis in Washington State (audio).
    • Recent WSLCB engagement with representatives from patient communities and medical cannabis stakeholders began with a medical home delivery study stakeholder meeting in June. Citizens have testified at WSLCB board meetings to voice their concerns about medical and adult-use cannabis.
    • Nordhorn has been responsible for engagement with groups of patient community representatives and one-on-one meetings with individuals. This presentation summarized his findings for agency leadership and included recommended next steps.
    • Nordhorn conveyed stakeholder concerns and ideas to agency leadership.
      • There is very little Department of Health (DOH) certified, medically-compliant product available in the adult-use marketplace, and some patients are turning to illicit markets to meet their needs.
      • Patients don’t want to be in the DOH patient registry database and believe a doctor’s recommendation should be sufficient.
      • Patients don’t want to pay excise tax. Medicine is typically exempt from taxation, especially at such high rates.
      • Trust in the integrity of I-502 producers, processors, and their products is low. Patients typically interacted directly with growers prior to legalization.
      • Product information is neither available nor trustworthy. Accompanying and on request materials, mandated by rule, are rarely available at retailers.
      • Medical consultants are not well informed and are constrained in the information they can provide.
      • Finding available medically-compliant product is difficult. A medical endorsement is no guarantee a retailer will carry medical product. Director Garza claimed MJ Freeway’s seed-to-sale traceability system does not provide visibility into the inventory of retailers.
    • Nordhorn described actions WSLCB can take within the scope of their authority to address stakeholder concerns, prompting conversation about next steps.
      • WSLCB intends to enforce compliance with rules requiring accompanying and upon request materials for cannabis products (WAC 314-55-105). Agency staff are working with The Cannabis Alliance to proactively notify licensees.
      • Consensus appeared to emerge to adjust rules to require I-502 products to meet DOH quality assurance standards for medically-compliant products (pesticide and heavy metals testing). Deputy Director Pat Kohler raised the fact that there is only one lab currently testing for heavy metals – and it may soon close its doors to the cannabis industry. If the agency mandates parity with DOH standards as part of its open rulemaking for Quality Assurance Testing and Product Requirements, labs will be incentivized to invest in new equipment and expertise with stronger guarantees of return on substantial investments.
      • Lot sizes will most likely be increased above five pounds to mitigate additional testing expenses.
      • Stakeholders want a stronger protocol for product recalls. WSLCB’s current protocol, modeled on WSDA practice, is to ask licensees to perform voluntary recalls. Nordhorn asserted a Facebook post by a licensee would comply with the current protocol.
      • Some stakeholders want Board support for homegrow. It’s claimed that plant limits are too low for patient needs without registration in the DOH database. WSLCB Enforcement remains concerned about who will be responsible for investigating complaints (local law enforcement or WSLCB).
      • Some stakeholders want WSLCB to restructure enforcement of pesticide and heavy metals compliance. Rather than a complaint-driven system, stakeholders suggest random spot-checks and heavy penalties. Nordhorn claimed WSLCB capacity to do so is limited.
      • A suggestion was put forward to enable Tier 1 producers to grow on behalf of patients.
    • WSLCB will not host additional stakeholder meetings, but has offered to review proposed bills. Nordhorn reported he has not seen any proposed bill language from stakeholders at this time.
  • Cannabis Examiners Manager Kendra Hodgson provided an update on the Canopy Team’s first year of activity (audio).
    • 48 producers have exceeded their canopy limits. The majority are outdoor producers on the east side of the state.
    • The list of producers out of compliance has been shared with Enforcement. Going forward, the Canopy Team intends to make that information more immediately available to Enforcement.
    • Director of Licensing and Regulation Becky Smith requested the list to ensure WSLCB does not approve requests for canopy increases when those producers renew their licenses.
  • Deputy Director Pat Kohler and Hodgson presented a substantial update on oversight of laboratories and received approval to proceed with their recommendations (audio).
    • Hodgson has convened a lab workgroup and is engaged with the Department of Ecology (DOE) on their report to the legislature regarding taking on responsibility for accreditation of I-502 laboratories.
    • The scope of the DOE’s report is constrained to initial lab accreditation and suggests a timeline for taking on this responsibility in 2022. The DOE is not comfortable taking on enforcement.
    • WSLCB vendor RJ Lee is currently responsible for WSLCB’s lab accreditation program and annual audits. WSLCB is responsible for investigating problems identified during annual audits, but currently does not have staff qualified to validate concerns raised.
    • Hodgson identified gaps in oversight between annual lab audits as well as the absence of a system to address complaints about labs. Hodgson recommended hiring an individual with a scientific background in lab testing and delegating signature authority for lab investigations to the Cannabis Examiners.
    • Complicating the situation further, visits by RJ Lee to labs are said to have become “contentious” to the point of potential litigation. Hodgson recommended WSLCB end their relationship with the vendor once DOE takes on accreditation and annual audit responsibilities. The current vendor contract ends December 31, and Hodgson recommended extending it for one year. While that timeline does not match DOE’s timeline, no one at the table seemed satisfied with DOE’s timeline.
    • To create additional mechanisms for WSLCB to hold labs accountable, Hodgson recommended creation of a new lab license type to be issued after accreditation. Hodgson recommended WSLCB draft legislation to grant themselves authority to create the new license type.
    • Hodgson also recommended WSLCB require labs to achieve ISO/IEC 17025 accreditation. In conference with the Attorney General’s office, Hodgson believes WSLCB has the authority to bypass the legislature and require accreditation in rule.
    • The Board approved all of Hodgson’s eleven recommendations. She will provide quarterly updates to the Board.
  • Finally, the bonus takeaway: Director Garza reported the Department of Agriculture (WSDA) has submitted a cannabis budget decision package to the Office of Financial Management (OFM) asking for a direct budget allocation for cannabis activities, including testing products for WSLCB and DOH. Currently, these funds are indirectly allocated to WSDA through a Memorandum of Understanding (MOU) with WSLCB. This news was apparently a surprise for WSLCB staff. The WSDA budget decision package also outlines a new compliance regime that will include premises checks of 32 producers per year to ensure compliance with pesticide regulations and worker safety.

Follow Up (December 3, 2018)

Here are documents from the November 14th WSLCB Executive Management Team meeting obtained via public record request.

The documents accompanied a substantial update on oversight of laboratories by soon-to-be-former Deputy Director Pat Kohler and Cannabis Examiners Manager Kendra Hodgson (audio – 23m). See the Cannabis Observer summary for takeaways and the Cannabis Observer transcript for detail.  The Board granted Kohler and Hodgson approval to proceed with their recommendations, an act likely to generate substantial new regulation and potentially licensure of labs in 2019.

Follow Up (December 7, 2018)

Here is a document obtained via public record request while following up on a conversation at the November 14th WSLCB Executive Management Team (EMT) meeting.

During this EMT meeting, Board Chair Jane Rushford briefly mentioned her participation at the Washington State Prevention Summit (audio – 3m, transcript). In addition to WSLCB’s “Gold Level” sponsorship of the Prevention Summit, Chair Rushford, soon-to-be-former WSLCB Public Health and Education Liaison Mary Segawa, and her replacement Scott McCarty hosted a workshop intended to introduce WSLCB to the gathered prevention community and coach them on participation in the agency’s rulemaking processes (Rushford: “…our workshop was about integrating with the LCB and participating at all levels.”). Cannabis Observer’s request for records about the event surfaced the workshop slidedeck.

Incoming WSLCB Public Health and Education Liaison Scott McCarty was introduced to the Board at the December 4th caucus (audio – 10m). See the Cannabis Observer summary for takeaways and the Cannabis Observer transcript for detail.

Subsequent research about the Prevention Summit revealed most workshop presentations are available for download directly from the event website. There were several other cannabis-related presentations of potential interest:

Here are shared documents for your review:

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