Cities retain control of pot

Attorney general rules on marijuana business regulation

The state attorney general released an opinion last week confirming the authority of municipalities to regulate marijuana businesses within their jurisdictions.

“I’m delighted because I think that … there’s some communities that frankly are looking forward to that business, and there’s other communities like ours that just would not like to have it going on,” Omak City Administrator Ralph Malone said.

After the passage of Initiative 502, which legalized marijuana for recreational use, Omak and Oroville passed ordinances to prevent medical marijuana dispensaries and collective gardens from coming to town.

Of Omak’s nine precincts, six voted in favor of I-502 in the December 2012 general election. Overall, city voters approved of legalizing marijuana 349-322.

A majority of Oroville voters also voted in favor of I-502, by a margin of 98-85. Mayor Chuck Spieth did not return a request for comment.

I-502 does not address medical marijuana. Oroville’s ordinance defines a dispensary as “any person, entity, site, location, facility, business, cooperative, collective, whether for profit or not for profit, that distributes, sells, dispenses, transmits, packages, measures, labels, selects, processes, delivers, exchanges or gives away cannabis for medicinal or other purposes.”

“Under Washington law, there is a strong presumption against finding that state law preempts local ordinances,” Attorney General Bob Ferguson said Thursday. “Although Initiative 502 establishes a licensing and regulatory system for marijuana producers, processors, and retailers in Washington State, it includes no clear indication that it was intended to preempt local authority to regulate such businesses.

“We therefore conclude that I-502 left in place the normal powers of local governments to regulate within their jurisdictions.”

Malone said he anticipates further discussion from the Omak City Council regarding recreational marijuana, but the city’s business ordinance does not allow licenses to be issued for businesses that would violate local, state or federal law.

Two business license applications from Omak-based companies are pending with the state: Kushington LLC at 572 Pine St. Apt. 7, and Sage Shop LLC at 605 Omache Drive.

Okanogan County Community Coalition Director Andi Ervin said that neither location meets the state’s distance requirement from areas where children frequent.

“When the Liquor Control Board dictated that one marijuana retail store be located in Omak, they did not consider that there is very limited property available that is not within 1,000 feet from schools, playgrounds, sports fields, and other areas not permitted under the initiative,” she said, adding that the Pine Street address is located inside a low-income, multi-family apartment complex.

“This suggests that no serious background screening for the appropriateness of proposed locations is occurring at the state level,” Ervin said. “Leaving decisions that have potential for massive consequences up to state officials who know little about our community is not only unfair, it is reckless.”

Malone said the city hasn’t yet received notice from the state of those two applications. Under state law, local governments are permitted to submit comments on licenses before the state grants them.

Out of five marijuana retail licenses earmarked for Okanogan County, the state has allocated one for Omak. One retail license is permitted for Ferry County and three are permitted for Douglas County, with one license set aside for East Wenatchee.

Ervin said she appreciated Ferguson’s legal opinion, which was issued at the request of the state Liquor Control Board.

“An experimental marketplace with unknown consequences to communities should not be forced on communities by state agencies,” she said.

However, Liquor Control Board Chairwoman Sharon Foster said there could be repercussions if cities refuse to allow marijuana businesses.

“If some local governments impose bans it will impact public safety by allowing the current illicit market to continue,” she said. “While I-502’s drafters could have structured I-502 to require local governments to accept marijuana businesses, they did not do so. If the Legislature wants to change that, it can amend the law.”

Malone expressed doubt that the state law would eliminate the demand for a black market.

“I think it’s accepted knowledge that some items which are heavily taxed and thus have a high price compared to their cost, such as cigarettes, sometimes are bootlegged and I’m sure that that will probably happen with marijuana even if it was totally legal,” Malone said. “I think it’s fair to say that a substantial portion of the illegal market are people 21 and younger… and interest will continue to be there.”

In Bridgeport, the city is still in the midst of a six-month moratorium on the “processing, production and sale of medical and recreational marijuana” implemented over the summer.

Councilman Neil Jacobson said although he isn’t a marijuana user, he would not try to stop the will of the state’s voters. However, he agreed with Ferguson’s opinion.

“It’s like moonshine,” he said. “It was not about making the shine, it was about the government not being able to tax the shine. Most things that the government declare illegal can be legal if the government gets its cut. Follow the money.”

Foster said the legal opinion is “a disappointment to the majority of Washington’s voters who approved Initiative 502,” and predicted bans will result in lower tax revenues for the state.

“We’re not yet sure how this opinion will change the implementation of the initiative,” she said. “The board will be discussing next steps. We have already been working with local governments, legislators and the governor’s office on this issue and will continue to do so.”

Under Initiative 502, it’s legal under state law for adults over the age of 21 to possess up to an ounce of “usable” marijuana, 16 ounces in solid form and 72 ounces in liquid form. The law went into effect in December 2012, but the Liquor Control Board spent nearly a year creating rules for producing and distributing marijuana for either medicinal or recreational purposes.

During the state’s month-long window to file business applications, 11 companies in Okanogan County filed for retail licenses, while two filed in Ferry County and nine filed in Douglas County, but all in East Wenatchee.

The state received 77 applications to produce marijuana in Okanogan County, and 42 processor applications. There are eight pending processor applications in Ferry County and 13 producer applications. In Douglas County, not counting East Wenatchee, Orondo and Rock Island, six processor and 10 producer licenses were requested.

Liquor Control Board spokesman Brian Smith said the state could begin issuing licenses in March.

Meanwhile, as ranking Republican on the Government Accountability and Oversight Committee, Rep. Cary Condotta, R-12th District, is involved with refining and implementing the state’s marijuana laws.

He is trying to get a bill passed to give a portion of the 30 percent retail excise tax on marijuana to local city and county governments.

He’s also following the attorney general’s opinion on zoning for marijuana operations.

While some cities are fighting allowing marijuana operations, most counties are trying to make the law work, he said. Douglas County’s zoning law is being held up as a model for marijuana zoning. powers of local governments to regulate within their jurisdictions.”

Malone said he anticipates further discussion from the Omak City Council regarding recreational marijuana, but the city’s business ordinance does not allow licenses to be issued for businesses that would violate local, state or federal law.

Two business license applications from Omak-based companies are pending with the state: Kushington LLC at 572 Pine St. Apt. 7, and Sage Shop LLC at 605 Omache Drive.

Okanogan County Community Coalition Director Andi Ervin said neither location meets the state’s distance requirement from areas where children frequent.

“When the Liquor Control Board dictated that one marijuana retail store be located in Omak, they did not consider that there is very limited property available that is not within 1,000 feet from schools, playgrounds, sports fields, and other areas not permitted under the initiative,” she said, adding that the Pine Street address is located inside a low-income, multi-family apartment complex.

“This suggests that no serious background screening for the appropriateness of proposed locations is occurring at the state level,” Ervin said. “Leaving decisions that have potential for massive consequences up to state officials who know little about our community is not only unfair, it is reckless.”

Malone said the city hasn’t yet received notice from the state of those two applications. Under state law, local governments are permitted to submit comments on licenses before the state grants them.

Out of five marijuana retail licenses earmarked for Okanogan County, the state has allocated one for Omak. One retail license is permitted for Ferry County and three are permitted for Douglas County, with one license set aside for East Wenatchee.

Ervin said she appreciated Ferguson’s legal opinion, which was issued at the request of the state Liquor Control Board.

“An experimental marketplace with unknown consequences to communities should not be forced on communities by state agencies,” she said.

However, Liquor Control Board Chairwoman Sharon Foster said there could be repercussions if cities refuse to allow marijuana businesses.

“If some local governments impose bans it will impact public safety by allowing the current illicit market to continue,” she said. “While I-502’s drafters could have structured I-502 to require local governments to accept marijuana businesses, they did not do so. If the Legislature wants to change that, it can amend the law.”

Malone expressed doubt that the state law would eliminate the demand for a black market.

“I think it’s accepted knowledge that some items which are heavily taxed and thus have a high price compared to their cost, such as cigarettes, sometimes are bootlegged and I’m sure that that will probably happen with marijuana even if it was totally legal,” Malone said. “I think it’s fair to say that a substantial portion of the illegal market are people 21 and younger… and interest will continue to be there.”

In Bridgeport, the city is still in the midst of a six-month moratorium on the “processing, production and sale of medical and recreational marijuana” implemented over the summer.

Councilman Neil Jacobson said although he isn’t a marijuana user, he would not try to stop the will of the state’s voters. However, he agreed with Ferguson’s opinion.

“It’s like moonshine,” he said. “It was not about making the ’shine, it was about the government not being able to tax the ’shine. Most things that the government declare illegal can be legal if the government gets its cut. Follow the money.”

Foster said the legal opinion is “a disappointment to the majority of Washington’s voters who approved Initiative 502,” and predicted bans will result in lower tax revenues for the state.

“We’re not yet sure how this opinion will change the implementation of the initiative,” she said. “The board will be discussing next steps. We have already been working with local governments, legislators and the governor’s office on this issue and will continue to do so.”

Under Initiative 502, it’s legal under state law for adults over the age of 21 to possess up to an ounce of “usable” marijuana, 16 ounces in solid form and 72 ounces in liquid form. The law went into effect in December 2012, but the Liquor Control Board spent nearly a year creating rules for producing and distributing marijuana for either medicinal or recreational purposes.

During the state’s month-long window to file business applications, 11 companies in Okanogan County filed for retail licenses, while two filed in Ferry County and nine filed in Douglas County, but all in East Wenatchee.

The state received 77 applications to produce marijuana in Okanogan County, and 42 processor applications. There are eight pending processor applications in Ferry County and 13 producer applications. In Douglas County, not counting East Wenatchee, Orondo and Rock Island, six processor and 10 producer licenses were requested.

Liquor Control Board spokesman Brian Smith said the state could begin issuing licenses in March.

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