WSLCB – Executive Management Team
(October 9, 2019)

Agency leadership discussed messaging for Cannabis 2.0, vapor products, hemp/CBD, and traceability while learning the latest numbers from the licensing division.

Here are some observations from the Wednesday October 9th Washington State Liquor and Cannabis Board (WSLCB) Executive Management Team public meeting.

My top 3 takeaways:

  • Director of Communications Brian Smith gave a status report on his office’s messaging efforts around the agency’s most high-profile cannabis topics.
    • Cannabis 2.0 (C2.0). Smith said that he’d been working with Board Chair Jane Rushford to “get [the project’s] message out broadly” (audio – 3m).
    • Vapor Products. At the EMT, the Board was still waiting to hear what action the State Board of Health (SBOH) would take regarding Governor Jay Inslee’s executive order on the “vaping use public health crisis” (audio – 3m).
      • Smith had been “hitting this at a number of different levels” including WSLCB’s vapor product page which had been “morphed” to include “broader public health messages.” The site was about to become a “launch pad” for a “broader sort of messages and things” and would host Department of Health (DOH) documents which DOH was “reluctant to place on their own [website], for whatever reason.”
      • Smith had assisted Garza with information for participating in the governor’s executive order press conference.
      • Smith confirmed he’d been answering regular media inquiries on the topic and joined weekly calls between the governor’s office and state agencies to get updates on the state’s vaping investigation.
      • Lastly, Smith noted that the agency had less consistent email contacts for non-cannabis vapor licensees and was preparing “postcards” to vapor businesses directing them to resources and information on WSLCB’s website.
      • Meanwhile at the SBOH board meeting, the DOH Board adopted emergency rules banning all flavored vapor products. WSLCB noted the new prohibition shortly thereafter and followed up on Friday evening to announce the agency’s interpretation of the SBOH rulemaking.
    • Hemp and CBD. Calling it an “ongoing issue,” Smith said departments of agriculture at both the state and federal levels were beginning to regulate hemp, but the Washington hemp production law largely “barred” WSLCB from regulatory oversight (audio – 4m).
      • Brian Smith noted that some marijuana licensees were now able to cultivate hemp at the same facility, causing confusion for enforcement inspections. Director of Licensing Becky Smith said there were nine “commingled” hemp and marijuana farms.
      • Brian Smith confirmed that WSLCB would hold a webinar led by agency staff for enforcement officers and later with licensees to discuss how the agency would deal with facilities growing both hemp and cannabis. The agency was also working on revisions to their website which would be announced as part of the agency’s next marijuana newsletter.
      • Board Member Russ Hauge asked whether Smith was hearing from “local air quality agencies” as “full fields” of hemp smelled every bit as “pungent” as licensed facilities for marijuana production and processing. Smith replied that he hadn’t heard from any of those agencies so far.
      • The last substantive hemp update from WSLCB was during the September 24th Board Caucus.
    • Traceability. Smith said WSLCB’s messaging was “hitting that on so many different fronts” to emphasize the agency was “taking the long view” by focusing on the 1.37.5 release from July to “fix and stabilize the system” (audio – 2m).
      • Smith said that Duffy had been working to redefine the agency’s approach to traceability with Mueller, Hodgson, and Enforcement Deputy Chief Steve Johnson as well as a “smaller group of external folks” (the new Traceability 2.0 work group).
      • Smith told the Board that the agency had been “invited back” to present to the state’s Technology Services Board (TSB). He felt staff presenting should avoid getting “down in the weeds of the problems associated with traceability” and instead “talk about what we’re trying to do now and where we want to be able to take it.”
      • Effective October 1st, the agency signed a ninth contract amendment with traceability vendor MJ Freeway extending its relationship for an additional two months while constraining the scope of work to “stabilization of the System Corrections specific to Release 1.37.5.”
  • Becky Smith provided a licensing division update and explained how an impending “redesign” of the alcohol licensure process could ultimately impact cannabis.
    • Director of Licensing Becky Smith’s last licensing update was on May 1st.
    • Smith first mentioned her staff’s participation in the Washington State Small Business Fair in Renton where she heard “many questions about special occasion licenses for marijuana.” At publication time, WSLCB offered no such event licenses
    • Smith recently sat down with officials from the State of Maine at the behest of the Department of Financial Institutions (DFI). Maine officials wanted to learn how WSLCB vetted cannabis license applicants and conducted financial investigations into license holders in addition to the agency’s work with the “banking system and credit unions.” Smith summed up the meeting as “good stuff” (audio – 3m).
    • Smith said her division had been approached by the governor’s office a month earlier to participate in an Agency Design Challenge to review WSLCB’s licensing process (audio – 10m).
      • She claimed the effort would bring “our staff and customers together and really look at an innovative way of designing our licensing process.” Smith was eager to get involved but quickly stressed that “we decided to do it for liquor.” Licensing staff would reach out to and visit alcohol businesses licensed “in the last six months” to survey them on how to improve the WSLCB’s processes. “We’ll take it all,” Smith said, regardless of whether the business’s suggestions were licensing-specific.
      • Board Member Garrett asked why Smith wasn’t looking at redesigning the agency’s cannabis application and licensing process, given that the agency’s proposed social equity program could lead to a new round of licensure. Smith replied that problems had “been brewing” on the alcohol side, which hadn’t been changed in her seven years at the agency. She agreed with Garrett that improvements were “needed” for cannabis licensing but looked at the design challenge as an opportunity to “hone in on our skills.”  
      • Smith explained that the challenge would kick off the following week. Her staff’s redesign was due to be presented to the governor’s office in November, and then to the Board in December.
    • Garrett brought up a June 6th meeting between Governor Jay Inslee and representatives of The Cannabis Alliance and Black Cannabis Commission held at the Department of Commerce (Commerce). She’d heard that licensing and applications were “a really big part of the subject” but as the meeting occurred without WSLCB participation the Board remained in the dark. Brian Smith mentioned a similar experience upon learning Commerce’s Director of Economic Development for the Forest Products Sector, Brian Hatfield, announced the inclusion of cannabis in the Choose Washington program at WACA’s fall conference.
    • Becky Smith shared the latest cannabis licensing numbers (Update, audio – 8m):
      • 149 producers, 233 processors, 971 producer/processors (1353 total)
        • 183 discontinued producer and/or processor licenses
      • 483 “open and operating” retail stores
        • 12 discontinued retail licenses
        • 46 retail title certificates for stores unable to open due to a local ban or moratorium. One certificate had been reinstated as a license due to Clark County overturning their moratorium in July, and Smith expected another could be reinstated soon. Title certificate holders were also permitted to transfer the certificate to another person. Smith said that eight such transfers had been approved, and another two were pending. She added that her staff continued to check in with certificate holders and any former certificate holder who had recently opened.
        • While no retailers had forfeited their license so far, Smith noted her division continued to investigate retail stores not reporting sales.
      • 13 transportation licenses
      • 17 medical cannabis cooperatives
      • One cannabis research license and one research license applicant
      • 29 “temporary” discontinued licenses. Smith described these as businesses which had lost a lease but would be allowed to resume at a new approved location.
      • Board Member Russ Hauge asked if communications occurred with local government with bans or moratoriums to see if WSLCB could address their concerns. Smith told him that communication only happened when a jurisdiction reported challenges around cannabis licensees. Garrett wanted to know if the agency was “noting local objections.” Smith replied that those comments were logged.
  • Board Chair Jane Rushford thought the Board might need to schedule a special board meeting just before Thanksgiving to keep agency rulemaking on schedule (audio – 2m).
    • Looking at the Board’s rulemaking calendar, Rushford called attention to the Board Meeting scheduled for Wednesday November 27th. She believed a public meeting that week could be crucial for advancing the Board’s full rulemaking agenda, but acknowledged the inconvenience of meeting the day before Thanksgiving. She expected to “announce soon” the cancellation of the November 27th meeting in favor of a Special Board Meeting on November 26th.
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