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How I502 Cannabis Regulations Are Made

December 5, 2018 @ 11:41AM

The Liquor and Cannabis Board (LCB) is the state agency that enforces [as well as introduces] rules pertaining to the commercial sales of cannabis in Washington state. In light of their recent attempt to ban certain types of edibles overnight— gummies, hard candies, tarts, fruit chews, and other candies they retroactively consider to be “especially appealing to children”— I wanted to take the time to better understand how our cannabis regulations can change so frequently with little to no input from the people who are affected by them. Specifically, I wanted to understand the full extent of the Liquor and Cannabis Board’s authority, and whether that could or should be reformed.

Historical Context

The Washington State Liquor Control Board, as it was originally called, was created with the passage of the Steele Act in 1934 (one year after prohibition ended in the United States). The purpose of the Steele Act was to regulate the legal production, sale, and distribution of alcoholic beverages in Washington. Named after Earl Newell Steele, the senator who introduced the bill (which is unusual considering Steele “was not a liquor man”), the Steele Act was signed into law by Governor Clarence Martin, who told the newly-formed LCB that the Act was intended to support temperance.

Under the Steele Act, glasses of beer (and eventually wine) were permitted to be sold at licensed taverns, but the purchase of hard beverages could only be facilitated through state-owned liquor stores that were operated by the LCB.

The Steele Act is so antiquated that the only way to read it is by accessing a blurry PDF scan from the legacy section of the Secretary of State’s website. This law is so archaic that sections 20 through 21 pertain to doctors and dentists prescribing or administering liquor to their patients. One provision of the Steele Act prohibits businesses from using the words “bar” or “saloon” in their advertising or signage… a domineering regulation that sounds eerily familiar to those of us who work in Washington’s cannabis industry. 

The agency has 3 executive members, all of whom are appointed by the Governor (RCW 66.08.012). Term limits for the executive board were originally 3, 6, and 9 years respectively, until a 1986 amendment to RCW 66.08.014 limited them all to 6 years (1986 c 105 § 1).

“They made their terms long because they didn’t want this to become an election issue,” recalls former Speaker of the House Charles Hodde. "So, with nine-year overlapping terms, it takes two governors, almost, to get control of the Liquor Board."

The LCB’s power remained unchecked until the 1960’s. Because the agency was expressly exempt from the Administrative Procedures Act, it was impossible for a liquor license holder to appeal any LCB decision to another court; This was addressed in 1963, when a Supreme Court decision resulted in the removal of the Liquor Control Board from the exclusionary provision.

Aside from the 1963 and 1986 amendments, the scope of the LCB’s jurisdiction remained virtually unchanged until 2011, when the people of Washington state approved initiative 1183 to end the LCB’s monopoly on liquor sales. Within seven months, the LCB was forced to sell all 330 of their liquor stores to private businesses and focus solely on alcohol enforcement; This was the single biggest change to the Liquor Control Board’s authority, until the people voted to legalize marijuana just one year later.

Following the passage of initiative 502, the LCB was mandated to adopt rules for the regulation of cannabis by December 1, 2013. Sticking to the timeline they posted on their website in April 2013, the LCB released draft rules to all stakeholders in May for public comment. After the stakeholders gave their feedback, the draft rules were revised and presented once again in late July before they were adopted into the Washington Administrative Code (WAC) the following month.

The Rulemaking Process

It’s important to understand that the Liquor and Cannabis Board (as it was renamed in 2015) does not write new laws: they write rules for existing laws that are already under their jurisdiction. To put that another way, I-502 is the law— an all-encompassing statute regarding the regulation of cannabis in Washington state— but the LCB writes the rules pertaining to the way these laws will be interpreted and enforced. For example, there’s a line in section 10 about “minimizing exposure of people under twenty-one years of age to the advertising,” which the LCB has since fleshed out with a comprehensive list of advertising restrictions that goes as far as banning the use of pot leaves.

Controversy Over Infused Candies

Up until recently, the aforementioned process of drafting rules, seeking public comment, revising the rules, and seeking public comment once more before finalizing rules has been the LCB’s standard procedure for creating or revising cannabis regulations. However, on October 3, 2018, the LCB attempted to bypass the stakeholders altogether and ban [previously approved] infused candies overnight. This hasty decision triggered immediate blowback from Washington's cannabis business owners. A few days later, the LCB decided to put a 30-day pause on their candy ban and seek stakeholder input.

Joining forces for the first time, three separate industry organizations— Cannabis Alliance, Cannabis Organization of Retail Establishments (CORE), and Washington CannaBusiness Association (WCBA)— convened in late October to draft a proposed list of clear and reasonable guidelines for the future production of infused candies. In early November, a bipartisan group of 4 congressmen and congresswomen wrote a letter to LCB Executive Director Rick Garza to express their support for these proposed regulations.

"As the professionals in your agency are well aware,” reads the letter, "public trust is predicated upon the rules that you administer and enforce, and as lawmakers, we stand ready to enact improvements that will benefit public safety, especially specific, deliberate specifications on products that should not appeal to children.”

In late November, the LCB sent out a notice which implies that certain types of edibles won’t be banned after all. Instead, it looks like the LCB is going to [follow guidance provided by Washington’s cannabis industry associations and] regulate the specific colors and shapes that can be used for edibles and their packaging. The proposed rules will be outlined in a webinar later this month.

Get Involved

Hopefully now you have a better understanding of the LCB’s authority, and how they implement and enforce new rules. Since the passage of I-502, the powers that be have actually done a good job of listening to their stakeholders— it’s the reason why Washington has concentrates, outdoor grows, and revised lab test thresholds— but these recent events have made me wonder if the regulatory system could be improved. In the future, it’s possible that the people of Washington will want greater accountability and transparency, perhaps through a state initiative addressing LCB reform and the I-502 rulemaking process.

Make your voice heard! If you want to see changes in the marijuana industry, you have to get involved by engaging with the LCB during public comment periods. Please visit https://lcb.wa.gov/marj/marj2018 to learn more about I-502 rulemaking, and click here to sign up for email alerts about proposed regulations.

Article by Ramsey Doudar; an in-house marketing and social media strategist at Herbn Elements. His perspective is influenced by 2 years of budtending, 5 years as a cannabis industry marketing professional, and 10+ years of being a super picky medical patient.