Cannabis Rules Hearing Set For Next Week

This morning, State Representative Chris Hurst, (D-Enumclaw), announced that his Government Accountability & Oversight Committee will hold a hearing on July 24th to review the last set of rules issued by the Liquor Control Board, LCB. The LCB is responsible for developing Washington State’s recreational cannabis use regulations pursuant to the 2012 passage of Initiative 502. The initiative made recreational use of cannabis legal for persons over twenty-one years of age.

Following a recent letter to the LCB about his disappointment with security and other provisions of the agency’s rules, Hurst and his committee will now review “Rule making by the Liquor Control Board regarding the production, processing, and sale of marijuana pursuant to Initiative 502.”

Cannabis Wire Post On Hurst’s Earlier Letter To The LCB

http://wacannabiswire.washingtonstatewire.com/hurst-asks-hard-questions-of-proposed-rules-gravest-concern-for-security/

LCB’s Marr and Garza And Others To Be Present At Hearing

LCB Communications Director Brian Smith confirmed this afternoon that the following LCB personnel and Board Members will be present at the hearing on the 24th:

…Board member Chris Marr, Director Rick Garza, Deputy Director Randy Simmons, Education and Enforcement Chief Justin Nordhorn, Licensing and Regulation Director Alan Rathbun, and Laws and Rules Coordinator Karen McCall…

The Committee Chair’s June 25th Letter

In his June 25th letter to the LCB (below), the twenty-five year veteran law enforcement officer and committee chair wrote that his “gravest concerns focus on the inadequate rules regarding security, the lack of prescreening of applicants, disclosure of non-conviction drug related activities, and the reliance on a non-prescreened lottery system to choose applicants.”

Hearing Announcement Here NOTE ROOM CHANGE:

Government Accountability & Oversight – 7/24/2013 11:00 a.m.

House Full Committee
House Hearing Rm A
John L. O’Brien Building
Olympia, WA

Work Session:

1. Rule making by the Liquor Control Board regarding the production, processing, and sale of marijuana pursuant to Initiative 502.
2. Issues relating to loss prevention efforts by alcoholic beverage retailers and access to alcohol by underage persons following the passage of Initiative 1183.

Work session will be 11:00 am – 2:00 pm.

The Letter

June 25, 2013

Sharon Foster, Board Chair
Liquor Control Board
3000 Pacific Avenue
Mailstop 43076
Olympia, WA 98504

Ms. Foster:

Over the course of the last six months, I have been closely monitoring the process to implement a comprehensive regulatory structure for the legal sale of marijuana, pursuant to the passage of I-502. I have met with representatives of the Liquor Control Board, industry stakeholders, local jurisdictions and constituents with the range of concerns each party has regarding the rules being developed by the Liquor Control Board. I am concerned that the draft rules do not adequately take into account the public safety concerns that I and others have raised with the LCB in the past weeks and months. My gravest concerns focus on the inadequate rules regarding security, the lack of prescreening of applicants, disclosure of non-conviction drug related activities, and the reliance on a non-prescreened lottery system to choose applicants.

At a page and a half, the rules regarding security create few minimum standards for placement or types of equipment to be purchased and installed by licensees. By not setting minimum standards, the equipment purchased by licensees will prove to be inadequate in assisting LCB enforcement officers or police officers in their investigations. Colorado has developed a robust system which sets specific requirements for placement of cameras inside retail and growing premises, lockboxes for recording devices to prevent their destruction by thieves, minimum resolution of cameras and networked cameras that can be viewed from a central location by government enforcement officers. I am urging the LCB to look at the standards currently in place for medical marijuana in Colorado and to review the thorough proposal submitted by Canna Security as a pattern for standards. Having robust and specific rules on camera placement and other security measures will ensure the safety of employees and the public, and also maintain the integrity of our nascent legal market.

Another area of significant concern regards the structure of the application process. The lottery system is inefficient and will likely result in wasted time and resources. For instance, there is no information in the draft rules on any pre-requisites being needed to put ones name into the pool of names to be drawn. As currently structured, this lack of a pre-screening process will likely result in many unqualified applicants being drawn; leading to wasted time of LCB employees evaluating their full applications and delaying the process, which would then have to start over with a new name being drawn. In order to avoid this costly result, the LCB should require pre-applicants to document that they are sufficiently capitalized to start the business.  Other pre-screening precautions that should be implemented include; requiring a sizable safety deposit with the LCB and other ways to prove that their operation will be insurable when a license is granted. No one should be allowed to even put in for the lottery without demonstrating that they have a commitment for insurance sufficient to fully cover their anticipated liability for these operations. These steps are necessary to ensure that only businesses with adequate solvency, financial backing and liability coverage are selected. Businesses with adequate financial backing are essential to a functioning legal market which will assist in stabilizing prices and help in the erosion and eventually, the elimination of the illegal market.  In addition, businesses that have invested significant amounts of money will be far more likely to comply with the LCB regulations since they have more to lose by failing to do so. Poorly capitalized operations have little to lose if they violate the rules.

Finally, the LCB should go beyond a requirement to disclose criminal convictions and require full disclosure of all prior illegal drug manufacturing or distribution activities for the past 10 years; whether or not there have been convictions for those activities. Applicants with such a history have a far greater propensity to continue flouting legal requirements as a licensee and should be made to demonstrate a willingness to comply with the law by, for example, paying all past state and federal taxes on income from their prior activities. Failure to fully disclose such activities should be grounds for rejection of their application, or later revocation of a license if this information comes to light after the license is issued.

I applaud the efforts of the Liquor Control Board in developing these draft rules. It is my hope that by working together and addressing the points I’ve made above that we can create a successful, efficient system that ensures the safety of the public and employees of licensees.

Sincerely,

Rep. Christopher Hurst
Chair, Government Accountability and Oversight Committee

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