Good morning acting chair Vollendroff member Garrett staff and guests, the lobbies are open and the recording has begun.
Great. Thank you, Dustin. Good morning, everybody. Welcome to the Washington State liquor and cannabis board meeting for Wednesday, May 22 2024. We have a full agenda, particularly from our cannabis related rulemaking team. We'll start off with an announcement from Cassidy West, the manager of that section. Cassidy.
Hi. Good morning, acting chair Vollendroff. And board member Garrett. I just wanted to provide an update that the social equity draft rules that we will be discussing tonight at our engagement are posted on the website. And so that engagement is tonight from 530 to 730. at Highline Community College in Seattle, we also have a virtual option so folks can find the details on our website with the draft rules and the agenda is posted as well. And that's it.
Thank you Cassidy. That was much better from you then had I made that announcement. So thank you for that. Thank you. All right, we'll move right into our first action item, which is a presentation from Denise Laflamme. Policy and rules coordinator to nice morning, in their in person.
Yes, I am. Good morning board members, Garrett Vollendroff. This morning, I'm going to make a recommendation to deny petition for rulemaking that was received on March 24 2024. From a concerned producer and processor who wishes to stay anonymous. The petition requests the board to initiate rulemaking to consider adopting rules to ban single use cannabis vape devices containing lithium ion batteries that are designed to be disposed of after use. The petitioner lists concerns about the release of harmful chemicals and heavy metals into the soil and groundwater. Due to the large amount of these vape devices that are being discarded, given the lack of legal disposal methods. Currently, the petitioner requests to remain anonymous, as they say out of safety for the petitioner fear of backlash and being blacklisted by retailers in retaliation. Lithium ion batteries are used in many products, including electric vehicles, computers and E cigarettes. Lithium ion batteries can catch fire if damaged or defective, so care is recommended when handling and disposing of them. Disposable vape devices are not generally designed for the easy removal of just the battery component for recycling. household hazardous waste facilities in Washington do not currently accept cannabis vape devices. And per question during yesterday's caucus, many of the components of these devices are indeed imported including from China RCW w 6953 42. grants the board brought us statutory authority to establish rules related to product quality standards, packaging and labeling requirements to promote public health and safety. This includes but is not limited to the authority to adopt rules related to methods of producing processing, and packaging cannabis usable cannabis cannabis concentrates and cannabis infused products. In 2020, the board was provided expanded authority under our CW 6953 42 from the passage of House Bill 2826 In response to the State Board of Health Emergency actions to prohibit products containing Vitamin E acetate, that were that was found and used in nicotine and cannabis concentrates. This provides the Board Authority to prohibit any type of device used in conjunction with cannabis vapor products to and it also includes the use of additives, solvents, ingredients or compounds in the production and processing of cannabis products. When the board determines following consultation with the Department of Health, or any other authority the board deems appropriate that the device additive solvent ingredient or compound may pose a risk to public health or youth access. lcbs authority differs for vape devices containing nicotine, which are more prevalent than the cannabis vape devices under our CW 7345 160. The LCB has authority to suspend the license of a retailer or delivery sale licensee. If an analyzed nicotine Vapor product contains an ingredient, substance or solution present in quantities injurious to human health or pose seeing a significant risk to public health, as determined by the Secretary of Health or local health jurisdiction. However, the board doesn't have authority to impose a total ban on the sale or use of nicotine vapor products. We consulted with the department's of health and ecology to get their input about the use and disposal of these products, and the information they provided is included as appendices in the petition response. Department of Health comments include the following that disposable products are commonly used by youth due to their inconspicuous design, there is a history of youth transitioning to other products that are available when a product is removed from the market. And they gave the example of when fruit flavored Juul pods were removed, and the shift to other Juul flavors available and other disposable products with fruit flavors. the complicated nature of the regulation of different vape products make it makes it difficult to help people dispose of these in a safe way. And they our current Department of Health is currently working with partners including the Department of Ecology to address proper vapor disposal options. Department of Ecology provided helpful background on disposal regulations including that they do not have authority to limit or ban the use of lithium ion batteries in products that single use vapes. Both nicotine and th products are an ongoing regulatory challenge for them. Depending on the condition of the vape and other factors, the vape device could be classified as dangerous waste, requiring disposal compliant with the dangerous waste regulations. Ecology discourages and communicates that the disposal of these batteries and household waste and garbage due to the fire risk from the battery. They discourage them, consumers from disposing of them in waste. Household and curbside trash and recycling and the dangerous waste permitted treatment storage and disposal. facilities in Washington currently do not accept these ways. While there are a variety of environmental health issues associated with the use of disposable vapor devices containing lithium ion batteries at this time, we do not they do not necessitate immediate actions to protect public health. Based on the information provided here, the director's office recommends that the board deny the petition for rulemaking to ban disposable cannabis vape devices containing lithium ion batteries. Thank you and I'm happy to answer any questions you might have.
Thank you Denise. Ollie, any questions?
No questions.
Okay, great. I'm then looking for a motion to deny the request to ban the use of Disposable single use cannabis vapor devices containing lithium batteries.
I move that we deny the motion.
Thank you and I second that. All right. Thank you very much Denise. Okay, we're moving right along to Daniel Jacobs, who's going to do a review on request related to Aesop programs. Daniel.
Thank you. Good morning, acting chair Vollendroff member Garrett. This morning I'm going to make a recommendation to accept a petition of rulemaking received March 26 2024, from the Washington cannabusiness Association regarding the use of employee stock ownership plans or Aesop's based on my explanation to follow. To clarify, accepting a petition for rulemaking does not necessarily mean that we are going to make the requested rule change or any rule change at all. But we are required by statute to respond to this petition submitted in accordance with the Administrative Procedure Act. Before proceeding further, I'd also like to give the disclaimer similar to what I said yesterday, due to the complicated tax implications of Aesop's while I myself am a licensed attorney, nothing that I'm about to say should be construed or interpreted as legal advice for particular individuals in a particular situation. Anyone who has any questions about their business structure and the tax implications thereof, should contact an attorney. Additionally, I also want to make a quick clarifying comment about some of the wording that I'm using. So while Aesop's the acid ESOP is for stock, I use both the term stock and share interchangeably however, really, what we're talking about here are shares as opposed to stocks the distinction being that stocks, you can, you know, increase your share of or sell or trade, you know, on an app or via stock broker, whereas that's not really what we're talking about here. These are shares long similar to stocks, they don't have the same sort of flexibility. The potential requests amendment of WAC 314-55-035, which is the board's true party of interest or TPI rule for cannabis licensees. This rule identifies various businesses, business and entity structures such as limited liability corporations, partnerships, sole proprietorships and others, and identifies who or what entities or persons need to be vetted for satisfying Washington residency requirements. While there's a comparable similar rule for alcohol licensees found it WAC 314-07-035 The rules different detail. During the 2023 legislative session, the legislature passed a substitute Senate Bill 5096, known as the expanding employee ownership act, and this defines an ESOP by referencing federal statutes and regulations on the topic. The legislation included statements indicating that from a general policy perspective, the legislature intends to support employee ownership structures for businesses in Washington. And its most basic form, an ESOP is a stock or share bonus contribution plan that serves as a de facto retirement plan for employees while also providing tax benefits for businesses. And these tax benefits can be especially helpful for cannabis businesses. In particular, how it works is that a business will create a trust and uses money typically from a loan to buy shares of itself and place those shares in the trust as the loan used to fund the trust is paid down annually. And more shares are more shares are added to the trust. Additionally, employees get fractional shares or fractional interest in the trust, and, and that the employee interest in the trust tends to grow longer that they're with the company. So they're sort of pieces of the pie expands, the longer they're with the company, and then also their pie. Continuing with the pie metaphor gets more shares added on top of it. The idea being that the more seniority, like I said that you acquire, the bigger your share gets, and the more shares you have, then when an employee leaves either through retirement or voluntary departure, whatever it is, they cash in, they're part of the trust, and so they sell their shares back to the company at once, then the market value for the shares, ideally accompanies, you know, share value expands over time as the company becomes more profitable. And in this way, the employee gets a greater return when they leave the company. And then the company in turn, takes those shares and puts them back into the trust. With lots of business sectors, advocates for ESOPs say that it serves to motivate and encourage employee retention and creates goodwill for employees because they know that their employer isn't for example, owned by some multinational conglomerate, again, not to disparage multinational conglomerates. But sort of you know, it creates goodwill with the sense that this is something that's owned by employees like like a co op. This structure has become increasingly popular for cannabis businesses in particular, however, in part due to the tax benefits, and again, I'm gonna go into a little bit of tax law here, but I want to explain disclaim, again that this isn't legal advice. This is just an explanation for purposes of research. Anyone who has specific questions should contact an attorney. So federal tax law prohibits cannabis businesses from making any deductions from federal taxes under what's known as Section 280 II. This comes from the origin of this comes from the days of, you know, drug cartels and saying you can't you can't take tax deductions and words in terms of the controlled substance Act, as we all know, because cannabis is currently a schedule one substance. The 280 E says that any business that is involved in trafficking or doing anything involving schedule, one substance can't deduct anything from their taxes. While there's no state income tax in Washington, there's still federal income tax and unlike the vast majority of Washington businesses, Washington cannabis licensees cannot deduct any business costs from their federal income tax return. But so here's where the ESOP structure comes into play a company that's converted its structure to being entirely owned in an ESOP. Just meaning that all the shares of the company are in the ESOP trust. And it's formulated as an S Corp for pass through tax purposes. It's exempt from federal income tax on a business level. And so what this does in certain, you know, as most folks that filed taxes know how tax deductions work is that you start off blowing in amount of tax and then to tax through deductions. you whittle the amount you owe down until ideally, the government ends up owing you and then that's how you get a tax return. But because so when it's when a cannabis business is an ESOP, it doesn't owe any taxes to begin with. It doesn't owe any federal income tax. I should clarify, there are other taxes for federal income tax, it doesn't owe anything. So the fact that it can't deduct any business expenses from it doesn't really matter, because there's no underlying federal income tax liability, that anything can get deducted from. So So again, to clarify, it's not that an ESOP gets to deduct business expenses that other cannabis businesses don't, it's that there's no need for it to deduct any expenses. In December 2023, a large cannabis business on the East Coast theory wellness got a lot of press attention because it had converted to an ESOP structure. And so that there's you know, if you Google cannabis ESOP, you'll get a lot of sort of news stories about that. Again, like I said, not meant as legal advice. If you have any questions, contact a lawyer. I'll also state that while several licensees have approached LCD staff at multiple levels over the past several years, a formal proposed ESOP structure has not been submitted to the LCD for approval through licensing. The conversations with LCB staffing levels have, indeed have sort of raised concerns about approval of such a structure. But it hasn't actually been formally submitted and sort of requested to go through the licensing process.
And this is sort of where the concerns come in is regarding the true party of interest vetting, in order to qualify as an ESOP on a federal tax level. And this is through the trust documents, the employees have to have a certain degree of control over the trust. And by virtue, if the trust if the company's shares are all in the trust, they have control over the business. Now, it's kind of a, I wouldn't want to say a legal fiction, but it's sort of it sort of is considered by some to be a legal fiction. This is similar to how a lot of sort of employee trust programs are done. There's a similar setup for federal ERISA health plans for large employers just getting into health insurance for a second here. But the degree to which the employees have control over the Trust has raised concerns for the true party of interest process that the employees by participating in the ESOP may trigger a true party of interest vetting, which would mean for example, that every employee of a cannabis licensee would have to satisfy Washington residency requirements. This would, in addition to sort of making the TPI vetting process much more cumbersome, it would raise concerns for cannabis licensees that might be near the border with some of our other states. You know, in the counties that border, some of our neighboring states, they might not be able to have employees that are on the other side of that border. So this is where the petition comes in, because the petitioner is requesting to amend the TPI rule to state that an ESOP than an employee doesn't need to be vetted for a true party of interest. Go through the two party of interest vetting process solely by virtue of participating in an ESOP. There were some other suggested rule language about who in the ESOP does need to be vetted. But the underlying sort of idea, because based on the initial examination, it looked like every employee would need to be vetted for the TPI process. And so the rule petition is requesting to sort of specify who does and who doesn't. Now, getting into concerns raised both enforcement and education and licensing divisions have expressed concerns about any eventual rule changes for a lot of the TPI reasons I've already discussed. However, as mentioned yesterday, the director's office thinks that the best way to flush out these concerns and have a discussion about them and then, excuse me in an open and thorough process is to approve the petition and have formal rulemaking engaged, which like I mentioned at the beginning, doesn't mean that we necessarily are going to end up changing the rule, but I think examining whether we can plausibly change the rules in a way that can accommodate flexible entity structures without compromising existing residency requirements. or allowing sort of an end run around those requirements is something that I think is worthy the directors office thinks is worthy of further discussion. The licensing division has expressed concern about ensuring that an ESOP does not control for example, more than five licensees which is prohibited by statute. And additionally, they've expressed concerns about how the TPI analysis will be done. And like I had sort of gone into the resources that it would require to do TPI vetting if every employee needs to be vetted. Additionally, there's concerns about how to request or how to analyze complex trust structure, because, as I've just mentioned, it is rather complex and there's multiple levels and layers and steps. Additionally, LCB staff are great at many things. But complex financial entity analysis isn't necessarily our forte. We do it for financial audits and the finance division does it for tax purposes, but in terms of understanding sort of what, you know, controlling entities that isn't something that our staff is the most familiar with. Enforcement has raised similar concerns as well as stating that the trust structure could be used to conceal owners that otherwise wouldn't meet vetting and TPI requirements. From enforcement's perspective, any changes to the TPI rule in cannabis should be done to make it more similar to the alcohol rule. There will, assuming this petition gets accepted, there will need to be a lot of coordination with the Department of Revenue, because they're the ones who per the bill that I earlier mentioned, have the statutory definition of an ESOP. There are other state agencies as well that are involved that could be involved, such as Department of Financial Institutions, and Department of Commerce. We've already reached out and had discussions with the Department of Revenue, about rulemaking that they're considering engaging in on Aesop's more broadly. And it's possible that we would need to wait to file a 101 on this until they're done with their rulemaking just to make sure you don't end up running afoul of something that they end up saying because their definition of an ESOP also involves state taxes. There's also been some updates since yesterday's presentation at caucus, I've received stakeholder feedback both in support and in opposition of accepting the petition. My understanding is that some of the stakeholders who've contacted intend to speak during public comment. So while the petitioner and and a retailer with multiple locations boasts both expressed their support for accepting the petition, other stakeholders expressed concerns about the potential impact it could have on social equity. Those social equity concerns were framed in a similar way to Licensing and Enforcement and Education's concerns about allowing non-residents or other other entities or individuals to have controlling interest in cannabis licensees. And from those folks perspectives. This sort of runs against the grain of a lot of our social equity goals. Also, just again, one last time, I'll say said at the beginning, and in the middle, nothing that I've said here is meant as legal advice. Anyone who has questions about their particular tax or employee structure situation, should contact an attorney. And I don't mean me. Based on what I've said, the director's office is recommending approval of the petition to consider amending WAC 314-55-035 to address ESOP's and the true party of interest requirements. I know that was a lot. And so I'm going to take a I could answer any questions.
Thank you, Mr. Jacobs. That was very complex. And thank you so much for the in depth analysis and recommendations. I would like to entertain a motion that we accept the petition to review the potential employee stock option programs.
This is Ollie. I move that we approve the petition.
Right. And thank you. And thank you, Mr. Jacobs, for the reminder that this is not saying that we are agreeing to do this, that we are looking at this as an option and look forward. I appreciate the fact that we've heard from both sides on this issue and want to hear more about the concerns that are raised and the potential that this could raise for social equity in particular. So thank you. Oh, when I second that, sorry. Yes.
And Jim, before we move on, I want to go back to the first motion, because I think I stayed IT DID NOT The motion and I should have said denied the petition. On the very first one. Okay. Well, I want to clarify that I was moving that we denied the petition.
Great, thank you. And I appreciate that. And I second that. Okay, moving right along, we're gonna move to action item C, and we're gonna hear from Jeff Kendall policy and roles coordinator. So Jeff, go ahead.
Thank you. Good morning, acting chair Vollendroff and board member Garrett. Today I am requesting your approval to finally see our one on one notice of pre notice of proposed rulemaking to begin implementation of SB 5376. Regarding the sales of cannabis waste. This bill permits licensed cannabis producers and licensed cannabis processors to sell cannabis waste to people who are not cannabis licensees under certain conditions. And these conditions are if the cannabis waste is not designated as hazardous, and the producer or processor licensee notifies the board and the Washington State Department of Agriculture before the sale takes place. And if the licensee makes all sales available to the public on an equal and non discriminatory basis, this bill also creates a definition of cannabis waste, as solid waste generated during cannabis production or processing that has a THC concentration of 0.3% or less. Cannabis waste as defined here in the bill does not include hemp, or industrial hemp, which is already defined in RCW 15.140.020, the current regulations regarding hazardous waste are in WAC 314-55-097 and they require cannabis waste that is not classified as dangerous to be made unusable before disposal. To make the cannabis waste unusable. It must be ground up and mixed with other materials to at least 50% non cannabis content. compostable waste can be mixed with food waste yard waste or vegetable oils, while non compostable waste can be combined with paper, cardboard, plastic soil or other approved materials. If approved, today, the CR 101 for cannabis waste will be filed today on March 22 2024. And a public comment period will be open until July 6, 2024. On the CR 101. We plan to file the CR 102 With proposal language on July 17 2024. And to hold the public hearing on August 28. And if all goes according to schedule, Final Rule language would be adopted in the form of a CR-103. September 11, which if approved, would have the final rule taking effect on October 12, 2024. And that concludes my presentation on the CR-101 and I would be happy to answer any questions.
Thank you, Mr. Kildahl. Okay, seeing no questions, I'm looking for a motion to approve the CR 101 for Senate Bill 5376. Regarding sale of cannabis waste.
I move that we approve.
And I second out thank you.
Thank you.
Okay, I think that concludes the first part of our agenda. And now we're going to move on to our public comment portion of the agenda. So just some reminders, this is a public comment period of the meeting, everyone will have up to four minutes to speak. Please limit your comments to LCB business and business. And a reminder that if you've got a case in front of the LCB at this particular time, we will I'll remind you that you can't talk about that and we will cut you off. Please refrain from personal attacks or going off topics or bringing up things that are unrelated to the work that we do. I will mention that if a speech speaker wanders off too far, please be respectful of peak speakers and everyone who is president whether virtual are in the room, do not disrupt the meeting, or others making public comment. If we have disruptions I will pause the public comment until the disruption stop. Please also remember that this has been recorded and will be available online later. If you are in the room with us today. Please be aware that the microphones are sensitive on what pickup papers and wrestling of things and wrestling and talking and things like that. If you're joining us online, please give us a second to connect you and We will do so decimal will give you an alert when you get to 30 seconds and I will ask you to conclude your comments. Once you reach the four minute mark, we will begin our general comment with those who have registered to speak virtually. And so I'll turn it over to Destin to let me know who the first person is up.
My chair first registered to speak is Brooke Davies.
All right, so Brooke, come online.
Hi, can you hear me?
Good morning? Yes, we can hear you fine. Thank you.
Okay, great. Good morning, board member Vollendroff. And board member Garrett. My name is Brooke Davies here today on behalf of The Washington cannabusiness Association. First, I just wanted to thank the board for accepting that petition to open rules on Aesop. And want to thank staff Daniel and Justin and everybody who did all of the work to prepare the presentation. And we look forward to participating in the rulemaking process to see if there's a path and answer all of the questions that came up today. I also wanted to thank the LCB staff for sending out communication on House Bill 1453, which is the medical excise tax exemption bill that passed this session, as you know, walk has been advocating for more clear and consistent communication from the agencies. So we really appreciate that. It's really important that this tax exemption is done in a responsible way. And we want to partner with the LCB to make sure that that happens upon implementation. And we recognize that there's a lot of moving pieces, and a lot of agencies involved and a lot of things are going to change through the rulemaking process. But what we're asking is because the LCB has stated that it will go into effect on June 6, even though there's not rules yet on record keeping requirements, but the risk is still on the retailer. From an auditing perspective, we really are asking for more clear guidance from the agency from that auditing perspective on what the record keeping requirements are for retailers for this interim time knowing that maybe it will change. But for this period right now, where there are not rules, if there could be guidance sent out just in case of an audit, let's say two or three years down the road. And there was a transaction that took place on like June 7, June 8, before those rules were in place, we want to have some sort of guidance, just to make sure that we can be as compliant as possible. So thank you so much for your consideration.
Thank you. Thanks so much, Brooke. All right. Dustin, I'm not sure if we just go in the order that I've got him on my agenda.
That works perfect, Acting Chair, thank you.
Okay, so next up, we have Scott Atkinson. Scott, are you there?
I just connected them, you should be ready to go.
Great. Thank you. Morning, Scott.
Good morning. Can you hear me okay?
Yes, we can hear you great. Thank you, go ahead.
Okay, well, fantastic. I actually want to thank Mr. Jacobs, who I think did a fantastic job of presenting what is a very complex situation with ESOP's. It's I've, over the past year been studying ESOPp's and the history of ESOP's go back to 1974, with some federal legislation that was really kind of rooted in a desire by Congress to address income inequality. And so they, some pretty smart economists, came to the conclusion that if companies were employee owned, you know, especially, you know, like 100%, employee owned, that that can lead to better outcomes and, and reduce the income inequality gap that we have in America that continues to compound over time. And to some extent that has been successful. And it just takes time, it's going to take a long time. But there's some very successful companies out there, some operating in Washington, that you may know have heard about Winco yolks, Bob's Red Mill, Schweitzer engineering, and, you know, all all companies that have employed ESOP's as part of their business structure and have been successful doing so. One thing that was not mentioned by Mr. Jacobs that I thought was worthy, or maybe it was and I just didn't hear it is ESOP's are also subject to additional regulatory burden by the Department of Labor. And these, these regulations are very strict and have a you know, just that heightened sense of oversight of these companies. And so some of the concerns around you know, who really owns these Isn't says I think I think that as you get into understanding these, there's third party trustee that have to oversee these businesses and report to ERISA on these on the performance of these companies and how they conduct themselves has potential to mitigate, I think some of the concerns that that board might have. So, anyways, I am thankful that there's an opportunity to go into a rulemaking on this because I think this has potential to create widespread ownership in this industry. And that can be helpful for all team members who work in this industry. Thank you.
Thank you very much, Scott. All right, next up we have Paul d'Oro.
Good morning acting chair Paul registered to speak but he's not online today.
All right, thank you Dustin. And the next we have William
William registered to speak but it's not online today.
All right. Finally we have Mr. Christopher King.
Because where you have your controls, you should be ready to go.
Okay, just a second. I'm getting there. Sorry. These moves a little quicker than I thought. Sorry about that. All right. Right there for you. Busy day, folks. Sorry about that. Okay.
I don't know.
Okay
Christopher, we have started your time.
Okay. Yep. I'm here.
Christopher. Go ahead.
All right. Well, terrific, guys. I'm coming at you like Isaac Hays, like the slaves that we all are when we're black dealing in this little plantation you've got there. Okay. So a couple of things. First, let's first talk about the three minute thing that happened last week or the last meeting. Okay. When was the last time, if any, that you reduced time for speakers? Can you answer me that?
We're not answering questions. Christopher, we're hearing from you today. Go ahead.
Hit Mr. Vollendroff. That's the part of the problem right there. Because many times I found that you do answer questions all of you, when you feel like it for your pet people and your pet issues, or when things are comfortable for you. That is a form of content based viewpoint based discrimination. Okay. And that's a problem that you pick and choose when you're going to decide to answer people, and you interrupt me not you haven't done it, Mr. Vollendroff. But certainly chair, postman has repeatedly interrupted me. And last week they did it. I think it was, was the Peter Madigan. No, no, it was Mike Assad, that you did it to Okay. And you don't want somebody coming at you. That's when you get the bangs out, you start cutting up black and brown. Now. You also cut out black and brown, you try to do it now, too, with certificate holders. Because if you look at 5052 All right, the predicate offenses, you know, you're going to what you're trying to do, he's going to put more white people with lots of money in front of black and brown, like us. Got me getting my buckwheat smile here. All right. So the problem with that is the predicate offenses that date back to the point, when Arthur West sued, y'all successfully got the 140 Grand with those clandestine meetings you're having down in the south end to run us out of business? All right. That kind of conduct is, you know, predates the 5052 matter, does it not? Right, temporarily it predates it. Right, right. Okay. So now you're going to put more whites in front of that as well. Okay. But that's what you do. All right. You did it when the whole Whitmer thing that I read to you before where your own lawyers stated that there's no way that this man should have any sort of activity with cannabis cannot be trusted. We had the millions of dollars and judgments, all right, against him and his company. And yet he ends up getting all these stores and all these licenses. Okay. So the bottom line is, you will do whatever it takes. Oh, I don't know why because my mic was disabled. It's back. I know. You will do whatever it takes to explain Give us it's an empirical fact you can't really deny it. It's not up for discussion. It's what you do. It is the silicone non of the LCB to mislead black and brown. All right? You don't like gays a lot either. And Mr. Vollendroff You know, I have told you before that, you know, I am gay adjacent, I am friends with that community and I respect their struggles, okay, my partner is a member of that community. All right. But you can't measure a screen you cannot compare the quantum of harm that they have received versus the quantum of harm that we have received. And we had people say that in the last meeting as well all right, so there we are, we're still stuck on stupid and rollin slate. Okay, now my mind is not insulated at all. No matter what you try to do, it never will be and I'm just telling you the facts and that's what it's about. Y'all have a good day. I'm gonna get off the chains to go ride motorcycle because [inaduble] to death right
Thank you, Mr. King. All right, we're gonna move to our in person. Folks next. We have up first Dustin?
First up to step to speak is Paul Brice.
All right, Paul, come on up.
Morning, or one Where's Bob Rice retailer? Happy trees also SCA. Four minutes is not enough. I want to remind everyone I'm on the social equity candidates Task Force. This is the list of all the people Kelly chambers our admin Rebecca Sol, Donna kurz keen Doran Waller, Cameron Rivera, Craig Bill Michelle, Notre Dame Mendoza, Charles Laura, all the Garrett Allison Besian. I'm the advisory member for this whole entire group or part of this group, Joyce, Bruce, Tamara Barkley. I do have a lot of experience in this and also cannabis from 1997 When I got my first double felony charge, this rubric that's coming up it's it's again, we believe LCB supposed to be trying to do the right thing being friends with us now and still repeatedly it's like guilty of see something say something just just don't do it like hoping to find friends here that will understand the troubles the things that are coming our way. And yet, it still seems like plotting, planning to undermine to pull the rug out. Again, this next rubric we're trying to push and just ramrod through once we know it's flawed and the wrong people can get in we're, we're disguising it under as a Trojan horse to to lead in and, and then people like Mike Asai here, if he's trying to open up without even knowing any harm that this letting title certs out very easily 40 plus people, once this thing gets signed, they'll be up and running. Already finding locations. How does that help social equity people? Where does that give us any chance? I have a long letter that I wrote, I released it to all the social equity task force members all of us SCA I know we're all going to be 90% of all in alliance that there's no help coming this way. And you know you guys are smarter than this like you guys know what's happening you you guys know whether or not something is going to help or hurt us whether or not it's going to benefit us all and again like to sit back and just close the eyes and we know nothing and we're just pioneers and we just made the mistake and we let this all happen and we cannot reverse everything that we just did is just crap. The ultimate
Thank you Paul. Okay, next up we have Peter Manning
Well, good morning. Actually, here Valens often Boardman, I'll Your name is Peter Manning with black excellence cannabis. The president. I've been at this for a while thinking about when I first embarked on this, this is before Ollie Garrett became a board member. I knew that we were going to have a problem with black and brown inclusion. I just knew it and I knew it because I grew we can I'm 2011 2012, I have a lot of white well to do dispensary owners that were telling me basically that the way it was going that they were going to dominate the market. I brought that to the attention of even Ollie Garret before she became a board member. And I brought it to the board. That time was Jane Rochefort, how he and someone else, or it wasn't how you someone else. So I've been here a while. The problem is so prevalent today in so persistence, that I don't think the LCB irregardless of what they say, with a smile, their true intent is to really resolve the issue. It's a slap in the face to me to be presented with a rubric that moves away from the targeted area. And to say it's because are on the premise of there's an overwhelming bunch of support for this new deviation. But there was no one to support it there. The call that I attended last week with Justin Nordhorn. And I think Cassidy, from the LCB. They tried to allude to the fact that this is they were making these changes, because the community at asks, every community member that was on that call was in opposition to this. And I don't know what's going on. I don't know if it's like there's just some type of racist ism here that understands that black and brown independence is the death of white supremacy. You understand? See, that really makes sense to me. See, I'm 59 years old, I know independence, my independence from any stipends or anything that the system gives me. And I do it on my own. I don't need white folks. And it's like, the opportunity that you guys stole from us. And now you have an opportunity to make your right, you're not going in the right direction. You got 75% of the targeted audience in Seattle King County, but you choose to move away from that we're not gonna even tolerate that. We're going to make this very big. And we're going to do it together, unify, we're going to do we're going to use the court system, we're going to use the media. We're going to bring attention to this. And this is going to be further dirt on the LCB space. We're gonna bring this to the legislative body to the senators to the representative to all Seattle, municipal leaders in Seattle, as well as Bellevue Tacoma. So it's kind of we're not going to let this go. Either we get it right. Or we get rid of this agency over cannabis. Thank you very much.
Thank you, Peter. Okay, and last, we have Mike Asai. Mike come on up.
Good morning acting chair Vollendroff. And board member gear and members. My name is Micah side with Mo city collective. I am also vice president of black excellence in cannabis. The petition in regards to the employee stock ownership. We had a blast of cannabis in the community. We're against this, this is a backdoor for out of state ownership. The board needs to look at what the reasoning is behind it. Why now? It's not genuine, whatsoever. And we don't believe it's genuine, especially coming from the petitioner. Yes, we've said the program is a failure. But not all aspects of the program. The social equity program had been a failure. The rubric wasn't perfect, but the rubric was moving in the right direction. The proposed rubric is moving in the wrong direction. Throughout the rules of the social equity program, we have by exit cannabis and community. There's really no pushback in regards to the verbiage because a lot of business from law. But as stated before, or stated this morning certificate holders. You know, this was kind of a hijacking of social equity that those certificate holders in there. As we've analyzed this over the years now, and we're thinking about it, certificate holders should not be part of social equity. If certificate holders are allowed on his next go around, it's going to dilute social equity. And so we are speaking against certificate holders that should not be. And those who are pushing for it were actually getting paid by certificate holders to push for them to be in social equity. We have to keep the focus on cannabis convictions. That's law. That's the legislative intent. Legislators or senators or representatives they're not happy to hear about the proposed change to include all Drugs, there needs to stay with cannabis convictions. cannabis is legal. Cannabis is possibly getting rescheduled to schedule one, schedule three. Not cocaine, not myth, not heroin, not fentanyl, we got to keep the cannabis. The pioneers who built this industry built it to where that the state said, You know what, let's legalize it, there was a structure. And let me say this anybody to say that the market was unlisted, your flat out wrong, because it was not enlisted. If it was enlisted, I would have never gotten a letter like many others, and a lot didn't, I wouldn't have got the letter I got from Department of Revenue, because the buyer was selling cocaine, they would have shut me down. If I was selling heroin, they would have shut me down. I was providing medical cannabis. And they recognize that and they said, Look, you gotta pay sales tax on. So let's keep that in mind that the pioneers that this agency cut out, and I don't know, I only got a minute left. But in Senate Bill 5052 and 2015. It says in here, the LCB. In essence, I'm gonna just sum it up after January 1 2017, there to look at the medical market and to expand into then we issue more licenses. But instead of doing that, what the LCB did in 2017. It's hard to sleep at night, to know what I discovered this past December night you have 30 seconds you you you cut out the merit based language so we couldn't come back. The ones that didn't get across the finish line. If you increase the ownership who were all like from three to five. We can't just sit here and just say, oh, there was oversight. Now this was done intentionally. That was an agency led Bill 5130 wants to say marijuana various changes. And it was done by senator Ann River who was also the Senator on Senate Bill 5052. To prioritize pioneers. Let's get the points up. Let's make this right as we move forward. 10.
Thank you, Mike. All right. I think that concludes public testimony. I want to thank everybody for coming and testifying today. We are a better agency as a result of people coming in sharing their opinion. So we appreciate that. Any final comments? All right, I think that concludes this meeting of the Washington State liquor and cannabis board. Thank you very much.
