Many of my firm’s recent Washington State cannabis enforcement cases contain a commonality. During the investigation stage, Washington State Liquor and Cannabis Board (WSLCB) enforcement officers tell licensees that their main goal is to achieve compliance. They say they aren’t looking to get anyone’s licenses cancelled — they are just trying to get a full picture so they can help licensees come into compliance with the rules. As we have stated in prior posts, many seemingly benign actions can give rise to license cancellation. But despite these assurances, licensees often find themselves blindsided by cancellation notices after they thought they were participating in a project with their officers to achieve compliance. When the licensees press their enforcement officers, the officers blame “politics” at the WSCLB offices in Olympia. It’s as though the WSLCB enforcement officers are playing the role of the car salesman going upstairs to fight for a price reduction only to be rebuffed by faceless management.
What is really going on here? As with everything else in the cannabis industry, it’s complicated. One thing to remember is that there is a real split in the WSLCB between its licensing division and its enforcement division. “Licensing” people are your standard bureaucrats, throwing up a varying array of obstacles to opening a cannabis business while assessing whether a businessperson and his or her plans merit a license to produce, process, or sell marijuana. “Enforcement” people are, for lack of a better word, cannabis cops.
Being cops, they see their role as rooting out activity contrary to law, and they will portray themselves however they deem necessary to get as much information as possible. Their behavior can range from be-your-buddy good cops to intimidating and threatening bad cops. The same officer often finds himself or herself playing both roles in some circumstances all geared to getting licensees to reveal behavior that may violate the rules. Institutionally, police forces often pressure their officers to continuously find bad behavior and officers that aren’t reporting enough violations face consequences at work for falling behind. We would be naïve to think WSLCB officers don’t face these same internal pressures.
The status of WSLCB officers as regulatory enforcement police puts licensees in a tough position. Most of the public knows that if they are accused of a crime by a regular police force, they shouldn’t say anything and should ask to speak with an attorney. But there is a fundamental difference between criminal enforcement and regulatory enforcement. The right to remain silent and the right to speak with police only with an attorney present are criminal rights. Marijuana business licenses, however, are privilege licenses. If you don’t toe the line, regulators can take that license away. For example, WAC 314-55-050(7) says that the WSLCB can cancel a marijuana license if a licensee denies a WSLCB enforcement officer access to any place where licensed activity takes place or fails to produce any required record licensees are supposed to keep.
Licensees need to keep both of these fundamental facts in their minds when dealing with WSLCB enforcement officers. The licensee has to understand that regardless of what they say, the goal of the WSLCB officer is to find bad acts and either fine the licensee or shut them down. But the licensee cannot ignore or shut out information requests from enforcement officers. Strategically, walking this tight rope requires licensees answer every question from an enforcement officer honestly and never lie, while also avoiding answering more than is asked. It’s not always possible to have an attorney present when dealing with an enforcement officer, but lawyers — especially those experienced in dealing with the WSLCB do help in these situations. Primarily, they know how to consistently frame a business’s activities as compliant within the framework of the rules (assuming the activity really is arguably compliant). Licensees often get themselves into trouble when talking to enforcement officers without an attorney present because they forget the fundamental truth — WSLCB enforcement officers are looking for a reason to submit a violation notice.
If the WSLCB wanted, it could institute a more collaborative relationship between officers and cannabis licensees. At WSLCB meetings, the WSLCB’s enforcement and licensing directors often make it sound as though the goal of enforcement personnel is to achieve compliance more than to shut down cannabis businesses. Actions to date, however, don’t back that up. So long as it appears that issuing violation notices is the primary goal of WSLCB enforcement officers, cannabis licensees need to approach each interaction with an enforcement officer as potentially adversarial because to do otherwise is to put your cannabis license at risk.
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Author: Robert McVay