Recently, The Stranger published an articled reporting that ten state lawmakers are calling for Governor Jay Inslee to rescind his nomination of longtime Liquor and Cannabis Board (LCB) member Russ Hauge for another term. Their letter to Inslee doesn’t paint a pretty picture of Hauge’s behavior, alleging that he has created a “toxic culture” at the LCB, one that is biased against cannabis licensees.
Anyone who has followed my writing on Washington’s cannabis industry knows I’m no friend to the LCB, and I’m never eager to defend someone who used to put people behind bars for a living, but the hit piece on Hauge did raise some pretty big red flags for me.
The article is pretty straightforward reportage on the content of the letter, and offers the agency’s head, Rick Garza, plenty of space to rebut the ten lawmakers’ allegations of cultural toxicity. But it doesn’t do something that I think is really important in cannabis journalism, given the soup of chaos and conflicting interests that is the contemporary cannabis industry, which is to ask who wins if Hauge loses his seat.
It should be evident from the first signatory on the letter—Sen. Anne Rivers (R-Clark County)—that the Washington Association of Cannabusiness (WACA) was behind it. It’s no secret that Rivers and WACA executive director Vicki Christophersen work hand-in-hand on cannabis legislation. When Rivers sponsored SB 5052, The Cannabis Patient Protection Act, in 2015, people in pot didn’t talk about provisions that her office had added in, they talked about provisions that Christophersen had added in. It is often assumed in the Washington state cannabis industry that if Rivers does something on weed, it is Christophersen’s doing.
A bipartisan group of lawmakers is calling on @govinslee to rescind his nomination of one of the LCB’s board members.
Ten Washington Lawmakers Claim Liquor and Cannabis Board Has a “Toxic Culture” https://t.co/XcVsLSICN0
— Lester Black (@leddder) February 26, 2019
But why would Christophersen want Hague out? Well, if you have the stomach for some wonkery, it comes down to a little thing called true party of interest (TPI). HB 1237, which Hauge is catching hell for testifying against, is a bill that would require the LCB to provide written warnings before they can cite a licensee for a violation, and would create a system in which licensees can request guidance without fear of getting a citation along with it. Its companion bill, SB 5318, is sponsored by Rivers, and would do pretty much the same things. That’s all fine and dandy, but it also includes a little provision that would invalidate any violations for cannabis licensees that occurred before April 30, 2017, and did not involve blatant diversion of product to the illegal market, sales to minors, possession of firearms on licensed premises, or any criminal behavior. That means no TPI violations.
In the Stranger piece, and a recent follow-up confirming Inslee’s support for Hauge, the bill is characterized as an easing of pressure on licensees. That’s absolutely not wrong, and pretty much no one in the industry is opposed to requiring written warnings before violations can be issued or moving towards an education-first model of enforcement. But what the piece fails to mention is that several of WACA’s members face cancellations of licenses they own for exactly the types of violations that would be erased under this bill, and that that’s what all the fuss here is really about.
The piece also fails to mention that Christophersen apparently had a personal problem with Hauge over his lack of support for the bill, which is kind of crucial information here. According to the Cannabis Observer, an independent media watchdog that attends every single LCB meeting and makes summaries freely available on their website, Hauge clashed with Christophersen at a House Commerce and Gaming Committee public hearing on January 28th, one in which a number of industry members actually testified against HB 1237’s amnesty provision.
“In the hallway after the hearing,” Cannabis Observer founder Gregory Foster wrote, “Hauge said he had a conversation with Vicki Christophersen, Executive Director and Lobbyist for Washington CannaBusiness Association (WACA), ‘…and she was quite upset.‘”
Foster included the following quotes from Hauge, all of which indicate that Christophersen had come into the hearing with the expectation that Hauge was on board with her bill:
- Hauge: “Apparently she thought that this was all negotiated and some kind of done deal.”
- Hauge: “I asked her when this was worked out and she mentioned the trip back to Washington D.C. some months ago that I attended. I assured her I did not remember anything that would constitute Board agreement to the proposals that she put forward.”
- Hauge claimed not to be present at a “part of the function” during which Christophersen claimed a discussion had taken place.
Governance by backroom deal is nothing new of course, but it sure is depressing to see business being conducted as usual here. Even more depressing, however, is the fact that the people doing this business did it with the full expectation of no one ever knowing about it. I have no way of knowing, but I would not be surprised to learn that the lawmakers’ letter was forwarded to Lester Black, the author of The Stranger piece, by an aide, not by WACA’s spokesman, Aaron Pickus. If it was from Pickus, I’d be deeply saddened, as it means Black accepted it at face value, without asking why WACA was so excited for him to see it. The first thing I learned from covering the Washington weed industry is that you always, always question your source’s motivations. Especially when your source represents the three largest, most well-capitalized producer/processors in the state.
There are plenty of other pot businesses in the state that are fine with Hauge, but quoting them wouldn’t really fit with the tantalizing narrative of him as an insufferable, self-important bureaucrat. Logan Bowers and Jerina Pillert, the owners of the retail chain Hashtag, sent their own letter to the Governor, arguing that, while they were no friends of the LCB or Hauge (Bowers once called him out in front of the LCB’s board caucus for forcing them to take down a #BlackLivesMatter sign at their Fremont location), they didn’t feel that he was unfairly targeting licensees.
“At times, we have been the LCB’s harshest critic,” they wrote. “We have every confidence, however, that its current staff, management, director, and board members—Hauge included—are the best individuals to continue to run the agency effectively and make changes and improvements over time, as needed.”
The governor agrees, as The Stranger’s follow-up piece noted, but Hauge’s still in limbo with the senate. Now, I realize that dangling a stodgy white male bureaucrat in front of a Stranger reporter is like tossing a piece of steak to a starving wolf, but it really feels like Christophersen was able to create her ruse a little too easily here. If HB 1237 gets passed unamended, erasing tons of violations for her clients and saving them a lot of money, she’s won big. To be fair, in getting two fairly damning articles on Hauge published, with nary a mention of WACA or the get-out-of-jail-free card in HB 1237, she’s already won pretty big.
In Black’s articles, Christophersen’s narrative is presented prima facie as a group of lawmakers taking umbrage on behalf of a wounded industry. An earlier piece by Black does quote her as being opposed to the board’s upcoming confirmations, but the two most recent pieces make zero mention of her or her organization, and tend to take it for granted that the lawmakers are right. As maddening as it is to see not only the legislature but the press so masterfully manipulated, you kinda gotta hand it to her here: she’s good.
In this tweet, for example, The Stranger doesn’t even use the word alleged, regarding the letter’s complaints about the LCB’s culture:
.@GovInslee still supports this member of the Liquor and Cannabis Board. On the contrary, ten lawmakers have called for the member’s removal because he’s part of a culture that unfairly enforces rules against pot business owners. https://t.co/qbsJAJveEx
— The Stranger 🗞 (@TheStranger) March 5, 2019
Her skill as a string puller aside, though, it’s still troubling that a lobbying organization can so easily manipulate not only lawmakers, which is kind of expected, but also the press, who we trust to be above such skullduggery. What is being treated like a letter written by lawmakers on behalf of a struggling cannabis industry is actually a pretty brazen attempt by one of the industry’s largest lobbying groups to bring regulators to heel, and force through a bill beneficial to its corporate clients.
The LCB isn’t exactly letting it slide, at least. “[Licensees who] have pending cancellations, you bet that’s what this is about,” Garza, the director, told the board, at a recent meeting of the agency’s executive management team. Brian Smith, the agency’s communications director, was even more direct, telling board member Ollie Garrett that, “The lobbyists are definitely pushing [this]. I mean you saw the [WACA] email, I don’t know if you got that, where they were pushing their members to contact the legislators saying, ‘For the LCB treating you like criminals, you need to get this bill moving and send it in.’ So yeah, they’re suddenly pushing it.”
The fact that there is some pushback coming from the LCB gives me hope that, contrary to what I’ve written in the past, we haven’t achieved full regulatory capture in the Washington cannabis industry, but it’s still wild that WACA was able to control the public narrative so well from the shadows.
To be clear, the problem here is not with WACA’s clients wanting to keep their licenses. They supply a ton of very popular pot products to Uncle Ike’s, the organization that pays for me to be mad online, so how can I be mad at that? But while it is absolutely fair for WACA to want HB 1237 passed, and it’s even fair for them to call for the ouster of the board member speaking against the bill, it’s also only fair for them to do that openly.
This piece has been updated to include reference to an earlier Stranger article on the topic.