Marijuana legalized: Now what?


Judging by the microfilm, Vancouver wasn’t overwhelmed by intoxicated hordes when the walls finally fell and legal sales began for what had once been a forbidden drug.

Despite months of arguing over how to tax it, who should be licensed to sell it and what levels of potency would be allowed, the end of alcohol prohibition on Dec. 5, 1933 was a relatively calm affair.

Fast forward 81 years, and we find ourselves in an oddly similar situation, this time with marijuana.

The economy is sluggish at best, state and local governments are strapped for cash and, in two states at least, legal walls are dropping on a drug that’s been prohibited federally for a long stretch — 85 years instead of the 13 years for alcohol.

While possession of certain amounts of marijuana has been legal in Washington for more than a year, there still are no stores where adults can buy it. Colorado opened its first recreational markets on Jan. 1, in what was an overwhelmingly smooth launch with no arrests or serious problems — and $5 million worth of sales in the first week.

So what will happen when retail marijuana sales begin in Washington later this year? And where will Clark County find itself in the mix?

There are no simple answers.

Behind Colorado

Washington’s system is months behind Colorado’s when it comes to getting things moving.

Some of that can be attributed to heel-dragging on the part of state and local governments, where moratoriums and delays have been common. But a larger part of it may be due to how the state system for medical marijuana was set up.

Washington legalized medical marijuana in 1998, but it failed to set up a dispensary system, preferring that marijuana be grown privately by patients. Dispensaries and collectives popped up anyway, since many patients didn’t want to grow their own.

Those dispensaries were never regulated. A bill that attempted to structure and track a dispensary system was vetoed by Gov. Chris Gregoire in April 2011.

Colorado, in contrast, already had a well-organized and regulated medical marijuana dispensary network. So when the state went about launching retail sales, it was able to piggyback off the existing dispensary system to create a recreational market.

Here in Washington, the situation around dispensaries remains far more murky, said Alison Holcomb, the state criminal justice director for the American Civil Liberties Union.

Holcomb wrote Initiative 502 that voters approved allowing sale of recreational marijuana in the state. But there are still many issues surrounding medical marijuana that need to be addressed, she said.

“So dispensaries aren’t well-tracked because they’re not technically legal,” Holcomb said. “When the (medical marijuana dispensary) bill was vetoed, the people operating informal dispensaries, those who bothered to get master business licenses, they just called themselves something else. We’re also the only state with a medical marijuana law that doesn’t have a patient database. It makes it challenging to create policy.”

Unable to piggyback off a pre-existing network, Washington decided to create a new network for recreational marijuana.

Back in 1933, as Washington prepared for liquor sales to return, similar questions arose as to where customers could buy alcohol. A major goal of legalization then, as now, was to eliminate the black market and stop bootleggers.

Federal control over alcohol rules and regulations ended up under the U.S. Farm Administration. But the feds left the question of bans, sales locations, tax collection and other aspects to individual states, counties and cities.

In 1933, Washington started looking at a system of state-run stores for hard liquor, such as whiskey and fortified wine. Brewers and wineries that made products with an alcohol content of less than 5 percent were allowed to open after acquiring a state license.

Before the state liquor store system went into effect, though, it was difficult to find a place to buy distilled spirits. In the vacuum immediately after Dec. 5, pharmacies were the sales network, and they were the only place where people in Vancouver could buy liquor with an alcohol content over the 5 percent legal limit that separated it from beer and wine. Confusion raged over whether those who wanted to purchase hard liquor from pharmacies needed a prescription for what was considered medical-grade booze.

With marijuana, setting up a new system of distribution and control is even more complex. In Washington, the Legislature decided to do that by tasking the state Liquor Control Board with creating three types of licenses, one each for growers, processors and retail sales.

The board also made a wall between retail sales and the growing and production processes.

Entrepreneurs can obtain both a grower and processor license, and there is no cap on how many of those will be approved from those who applied during the 30-day window from Nov. 18 through Dec. 18. Sales licenses, on the other hand, are more limited and structured — with a maximum of 334 statewide and 15 in Clark County.

The application window was officially closed on Dec. 19, and there’s no word if there will ever be another one. Now the board’s job is to sift through the 3,700 or so applications and see which applicants are actually qualified to operate in the new industry.

After that, the Liquor Control Board will hold a lottery to determine which of the retail locations will be approved, said Brian Smith, communications director.

“We expect to have our first producer and processors’ licenses out in late February or March,” Smith said. “And we’re establishing a process now for the lottery, which should be soon (perhaps by the end of March).”

Roadblocks remain

Even if the licenses are approved by then, there are still many hurdles to jump before residents will be able to pop by the store and pick up a joint, which by some estimates will cost about $7.50 after tax.

Clark County commissioners have indicated they want to ban marijuana sales in unincorporated Clark County after its moratorium expires, which could impact six of the 15 stores allocated for our area. Oddly enough, in 1933, the opposite happened. Clark County commissioners sent a letter to the governor asking that the state take full control of liquor sales and distribution, which the state did.

Back then, the city of Vancouver was more enthusiastic about the formerly banned substance. It even tried to jump into hard liquor sales with the creation of a city-run store, but attorneys advised city councilors that they couldn’t do that unless the state made a law authorizing it, which didn’t happen.

With marijuana, the city started off more slowly, placing a moratorium on sales until details of the state network came together, a process which is still being reviewed. Since then, though, the city has indicated it will allow the state licensing process for marijuana to move forward. The state will allow the city to have six marijuana retailers.

Battle Ground, Washougal and Camas are also debating the marijuana issue, with one store allocated for each city and moratoriums in place in Washougal and Camas, but not Battle Ground.

While those debates continue to rage, applicants face their own set of issues finding available locations that meet state requirements.

Several applicants have had problems finding a spot that’s at least 1,000 feet away from schools, playgrounds, recreation centers, child care centers, public parks, transit centers, libraries and arcades, as mandated by the law. So they’ve applied anyway.

The thinking is that if they are licensed, they will then find a more suitable spot and move forward with setting up shop, said two Clark County sales applicants, who asked that their full names not be released unless their licenses are approved.

“A lot of applicants are going to be pulled out,” said J.S., who applied for two stores, one in unincorporated Clark County and one in Vancouver. “Part of the issue is driven by being in compliance with the buffer rules. There’s only pockets where you can site a retail business here.”

Rules around whether businesses will be allowed to relocate are a bit unclear. The Liquor Control Board has indicated it plans to work with applicants who have had siting issues.

Kevin, who used to run a community garden dispensary before he applied for a sales license in Vancouver, said he also has run into obstacles moving from medical marijuana to recreational marijuana.

To comply with the law, he shut down his former business and removed all plants from his site. But he’s waiting to see where he can actually locate his retail store, if approved, because the city of Vancouver is still debating some of the siting issues.

“I’ve got my applications in and I’m going through the loopholes,” Kevin said. “And when this is all set up there will still be a lot of problems when everything opens, because there won’t be enough supply. It looks like we’ll run out in about 30 days, if Colorado is any indication.”

Another area of uncertainty is whether the Liquor Control Board will allow licenses to be transferred from one person to another once they are approved. That appears to be the case, and if it firms up, then all the hassle will be worth it, Kevin said.

“In the end, if I get one of those retail licenses, it could be very financially worth it,” Kevin said. “It’s a very expensive lottery ticket.”

Moving forward

Even if Clark County bans marijuana sales — and state Attorney General Bob Ferguson issued an opinion earlier this month that says local jurisdictions have the authority to do so, until the feds decriminalize it — the issue may not be closed.

Ferguson’s opinion is advice, not law. Attempts to ban sales could still be met with a host of lawsuits, Holcomb said.

“Hopefully Clark County doesn’t have to end up with a lot of lawsuits, but that’s possible,” she said. “I think all of these issues are going to be examined, discussed and they will evolve over time.”

Even more problems await once the first stores open and sales begin.

One of those issues is how people will pay for marijuana. Federal banking laws prohibit profits from illegal enterprises, and marijuana is still illegal in most of the country. So the only way for anybody to pay for pot, or for businesses to pay taxes on pot, is with cash.

“At this point Revenue is preparing like there are no federal banking reforms to fix that,” said Kim Schmanke, a spokeswoman for the state Department of Revenue. “We’re preparing that we could see an influx of cash. What we’d like to see are federal banking reforms that will make it legal for businesses under I-502 to pay for things electronically.”

Customers might not mind paying for their marijuana in cash, but for businesses, handling large amounts of cash could be downright dangerous — not to mention cumbersome.

In 1933 those sorts of issues didn’t come up. One hope for the current situation with marijuana is that the federal government will create some sort of policy that says the Department of Justice won’t interfere with businesses that are deemed legal by the states of Washington and Colorado, Holcomb said.

“There has been some discussion of that on the federal level,” Holcomb said. “I’m hoping that will happen so banks can get a layer of reassurance and feel comfortable moving forward.”

On Thursday, U.S. Attorney General Eric Holder said he’s also concerned with the situation. He plans to create new banking guidelines that would tell prosecutors not to prioritize cases that involve legal marijuana businesses.

One thing customers don’t have to worry about in Washington, at least, is their identities being tracked after sale. As with alcohol, stores will check ID to make sure pot purchasers are 21 or older, but they won’t keep a record of buyers’ names, Smith said.

“What’s being tracked is the business side of things,” Smith said. “But for those who buy it in the store, there aren’t strict security expectations.”

Stores are required to use video monitoring, but recordings from that monitoring won’t be stored beyond 20 days.

Another vague area is the amount of pot that a customer is allowed to have.

Residents and visitors to Washington are allowed to have a combination of 1 ounce of dry, smokable marijuana, 16 ounces of infused food such as brownies or candy, and 72 ounces of infused liquid such as sodas — and they can have up to all three of those on their person at any time and not run afoul of the law.

There’s also nothing in the law stopping them from purchasing those quantities, dropping them off at home, and going to another store to buy more.

And it’s a bit unclear whether having those quantities in two separate areas is legal or illegal, Smith said.

“Whatever it is, that’s what you’re possessing at the moment, what’s on your person,” Smith said. “Although that may change.”

After their purchase, people also may run into issues over where they can use their marijuana — especially if they smoke it.

“You can’t do it in public view,” Smith said. “But it’s hard to determine what that is. The safest place to consume it is at home.”

Can you smoke in a state park in a designated area? Maybe not, but the rules are a bit unclear. You also can’t consume marijuana in a bar that sells alcohol — and you also have to obey the statewide indoor smoking ban, Smith said.

Private clubs and hotels may allow marijuana consumption, but the rules are also vague, Holcomb added.

“There’s also the process now of vaporization (and e-cigarettes),” she said. “That’s one way to get around it. Also, there’s the whole thing of eating it or using tinctures.”

There are even more issues coming beyond that — including drugged driving, allocation of tax revenues from sales and drug testing by companies that don’t want their employees using marijuana off the clock.

“There’s just a lot to still be worked out,” Holcomb said. “I anticipate I think at least three marijuana bills (in the state Legislature this session). I think we’re in a position where there’s still a lot of education to do.”

 

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