502 Producers & Processors: ACT NOW! Sign this Petition to the LCB!

  502 Producers & Processors:  ACT NOW! Sign this Petition to the LCB!  

On January 6, 2016, the WSLCB published its proposed Draft WAC 314-55, the administrative code that governs our industry. The newly proposed changes will have drastic impacts on the cannabis community, especially Producers and Processors of every Tier.  

The comment period for these proposals was set at about 30 days, and closes next Wednesday, February 10, at a public hearing starting at 10:00 a.m. at the WSLCB Board Room, 3000 Pacific Avenue, S.E., Olympia, WA. We encourage you to attend and present your views to the WSLCB.  

Set out below is a summary of the issues arising out of the Draft WAC that we think are of major concern to Producers/Processors. It is based on a more complete analysis contained in a paper entitled Notes and Comments on the Draft WAC, a copy of which is available upon request. (The lettering of each paragraph of the summary corresponds to the lettering used in the Notes & Comments.)  

We are putting this summary forward because we believe it takes the positions that most of us would take on most of the issues raised, though there is sure to be disagreement on some points.  

Our aim is to gather as many endorsements of the paper as possible, so that the WSLCB can see we have a collective voice where our interests align. To the extent you may not agree with particular views in the paper, you can qualify your endorsement in the comments section of Petition24 website, e.g., by identifying particular items with which you may not agree. The important thing is to let your voice be heard together with like-minded licensees.  

There were many direct and indirect contributors to this paper, but the primary author is Gene Flynn, Managing Member of Canna Herb Farms, a Tier-2 P/P in Stevens County. He is a member of the Cannabis Farmers Council, The Cannabis Alliance, and WACA, and each of those organizations commented on early drafts of the paper. He is also a retired lawyer whose practice was essentially the drafting and negotiating the text of complex legal documents.   

These comments are limited in scope to proposed amendments in the Draft WAC, and generally do not raise issues unless directly connected to changes in the text. Important issues of a general nature, not specifically addressed in the Draft WAC, may be raised separately with the WSLCB.  

If you find yourself in general agreement with the points raised in summary below, we ask you to indicate your endorsement by electronically signing this petition. We will forward the summary, the signatures collected (with qualifications, if any), and the full  Notes and Comments on the Draft WAC to the WSLCB prior to the public hearing on February 10.  

We hope you will help us to send a message to the WSLCB regarding the shortcomings in the Draft WAC by signing below, and attending the February 10 hearing to express your views.  

The issues raised in the Notes and Comments on the Draft WAC are summarized as follows:  

A. Inventory Destruction: The Administrative Sanction of Inventory Destruction  is a stark violation of due process and private property rights. It is believed to be an unprecedented form of administrative sanction in the State of Washington, or any other state of the union. All references to inventory destruction as a penalty for non-compliance should be deleted from the Draft WAC. (Sec. 515, 520, 525, 530, 535)  

B. Summary Destruction Procedures: The procedures for Summary Destruction of Inventory are confusing, contradictory, and apt to be misinterpreted. There are numerous instances of ambiguity, mixed nomenclature, insufficient cross-referencing, and the like. These create insolvable uncertainty within the text of the Draft WAC as to a licensee's procedural rights. To ensure due process is carried out, these provisions (which apply to all formal hearings concerning administrative violations) must be revised to clarify the subject procedures. (Sec. 220 & 510)  

C. Gifting of (Condemned) Inventory to Law Enforcement: The objectionable practice of inventory destruction should not be compounded by winking at a clear conflict of interest. No confiscated inventory of a licensee should be gifted to law enforcement under any circumstances. This provision creates a conflict of interest, and opens the door to undue influence and abuse of power. Lawfully confiscated marijuana should be gifted to approved institutions for agricultural and medical research, but never to law enforcement. (Sec. 230)  

D. Definition of "Licensed Premises": The proposed definition of "licensed premises" in its current form  is vague, ambiguous, and confusing. Many questions arise as to both its intent and its scope. The section should be redrafted with greater clarity and specificity, and a grandfather exception should be provided for all existing duly licensed and constructed premises. (Sec. 010(14))  

E. Mandatory Mr Yuk Stickers: The mandatory use of “Mr. Yuk” stickers is a bad idea for many valid reasons. First, it has traditionally always been a voluntary program, and there are no other instances of it being mandated by a state for any product, much less any edible. It will be extremely expensive to implement taking into account the cost of copyrighted stickers, the labor to apply them, and the oversize packaging that will be needed to accommodate them. With child-resistant containers already used, the industry cannot reasonably be demanded to pay the costs of a cartoon warning label. It is not necessary and it is not fair.(Sec. 077(5)(e), 077(6)(e))  

F, G, & H. Excessive Amount of Free Samples:  The Draft WAC calls for an excessive expansion of free monthly samples to be provided by P/Ps to Retailers, their budtenders, for use in Sniffer Jars, and  lab samples beyond what is actually required by some labs. Making some modest assumptions, a P/P could be giving away more than ten (10) ounces (+280 grams) of some of its best bud every month for free. This is a sizable amount of top product to hand out each month, and will create a hardship for small and medium P/Ps whose harvests are a fraction of those of Tier-3s. The WSLCB should adopt regulations that:  

•    Reduce the budtender Education Sample allowance to three (3) grams per month (6u x .5g);  

•    Limit Education Samples by strain to avoid "double dipping", so that budtenders may receive only one unit of each strain sold by the P/P to the Retailer.  

•    Reduce Sniffer Jar samples from 3.5 grams to two (2) grams per strain.  

•    Reduce the minimum weight of lab samples from four (4) to the number of grams the particular lab actually requires for testing purposes. (Sec. 96(3), 96(8), 101)  

I. Increase QC and R&D Samples to P/Ps: The WSLCB should increase the allowance provided to P/Ps and their employees for Quality Control and Research & Development Samples to a level of  at least one (1) gram per strain per month per employee. Employees play a critical role in the  development of a company's products, e.g., by completing technical assessments of factors such as aroma, flavor, density, effects, duration, etc. especially, for example, following changes in growing or nutrient routines by the farm. Employees can only provide this information if they have access to a reasonable amount of the P/P's products. For QC and R&D, such "reasonable amount" would be a minimum of one (1) gram per strain, per employee, per month. (Sec. 96(6))  

J. Out-of-State Financing: There are many reasons to be wary about permitting out-of-state financing so soon after legalization and while the market is still seeking some level of stability. The WSLCB should move with great caution especially in respect of the guidance of the Cole Memorandum that obligates states to "[prevent] revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels; . . . ." Opening the door to out-of-state financing will create new channels for dark money to flow into Washington, and for that reason alone this idea should be put to rest at least for the duration of a 5-year moratorium. There is no dire shortage of capital in the existing market. Moreover, outside venture capitalists are likely to be interested only in larger operations that have room for expansion, thereby putting even more pressure on smaller companies. Outside financing also means that a portion of the revenues generated by a wholly in-state business will now be siphoned out of the state for the benefit of non-residents rather than staying here for the benefit of our own citizens. (Sec. 20(6)(b))     

K. Plant Growth Regulators: PGRs should be absolutely prohibited during the vegetation and flowering stages for product intended directly for market. In some cases, however, the application of certain PGRs (e.g., colloidal silver) can be necessary to feminize seeds when a grower wishes to preserve a particular phenotype of a strain.  

There is no health risk in such applications because no trace of a PGR carries over to the plants grown from the seeds so feminized. Such limited use should be permissible. (Sec. 084(2)(a))  

L. Pesticide Labeling: Unauthorized Pesticides should be strictly regulated. WSLCB's efforts, however, should be directed toward monitoring and policing the actual application of illegal pesticides rather than paper measures such as listing pesticides on a label. This proposal is also highly discriminatory since no known precedent exists where any food crop, or even tobacco for that matter, is required to list all pesticides used on its packaging. Labels are already overcrowded, and many P/Ps find it difficult to cram all the currently required information on labels, especially for the most popular small quantities of product (1g and less). (Sec. 105(9)(f))  

M. No Shared Outdoor Fences: The proposal to prohibit common outdoor fences by creating a new rule mandating a 20-foot open space between neighboring grows should be withdrawn. There is no apparent practical reason for this proposal, and it will disrupt licensed premises currently sharing common fences. Indeed, compliance may be physically and/or legally impossible in many cases. At a minimum, a grandfather exception must apply to all existing grow operations. (Sec. 075(1))  

N. Collection of Employee Compensation Data: This Section "requests" licensees to provide WSLCB with private and privileged statistical data regarding a company's employee compensation and benefits. WSLCB has no legitimate purpose in obtaining such information, it is not common for a regulatory agency to make such a "request" to entities under its jurisdiction, and the information sought is privileged, confidential, and constitutes a trade secret. This provision should be withdrawn. (Sec. 20(13))