I-502 Impact: New Marijuana Legislation

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I-502 Impact: New Marijuana Legislation

October 29, 2013

The electronic versions of all the documents are available on the KCBA website:

Chapter 1 12:00 ? 12:30pm

Overview Carol A. Morris, Morris Law, PC

Electronic format only: 1. Marijuana Regulation in Washington

10/22/13

MARIJUANA REGULATION IN

WASHINGTON*

By Carol A. Morris Morris Law, P.C. 3304 Rosedale Street N.W., Suite 200 Gig Harbor, WA 98335 carol@ Website:

Carol Morris owns Morris Law, P.C., which focuses on the provision of advice and representation of clients in municipal and land use matters. Since 1994, Carol has been a panel attorney for the Association of Washington Cities Risk Management Services Agency (AWCRMSA) insurance pool, to represent cities in land use litigation. She also answers the AWCRMSA sponsored Land Use Hotline, answering land use questions from the cities in the pool, including questions on marijuana regulation. Between 1989 to the present, Carol has served as a city attorney, assistant city attorney, deputy prosecutor or special legal counsel for over 35 cities and counties. * This is a summary of a paper entitled "Medical and Recreational Marijuana Uses ? Local Regulation," by Carol Morris, which can be found on the website:

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I. Introduction. Anyone who has attended a city council meeting in the last couple of years knows that

local governments are struggling with more than decreased tax revenue. As a result of two state initiatives, a substance that was formerly illegal ? marijuana -- has now been legalized (within limits) under state and local law. The struggle has partially resulted from the federal government's unchanged position that marijuana is illegal.

Recently, the federal government acknowledged state and local laws authorizing marijuana-related conduct, and declared that if such laws are strong and effective in practice, it is "less likely" that marijuana operations will pose a threat to federal enforcement interests.1 However, these enforcement systems established by states and local government must address the enforcement priorities identified by the federal government, and the necessary resources must be devoted to enforcement efforts. Otherwise, "the federal government may seek to challenge the regulatory structure itself in addition to continuing to bring individual enforcement actions, including criminal prosecutions".2

We can predict that the production and sale of marijuana in Washington will be big business. There are unofficial estimates that the marijuana crop in the United States during 2003-2005 was larger than any other crop (even corn), averaging $35.8 billion in production value.3 It is estimated to be the second largest cash crop in Washington during the same time period, with a value of $1 billion (average production).4 The estimated current marijuana consumption in Washington is 160 metric tons per year.5 Although the Liquor Control Board has adopted certain rules that attempt to limit production, we can expect that these numbers will increase, not decrease, due to legalization.6

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In Washington, local governments are also struggling because of the adoption of two very different Washington State initiatives and statutory amendments, utilizing extremely disparate approaches for marijuana regulation. The current regulatory scheme for recreational marijuana will likely satisfy the federal government's requirements, because it comprehensively covers recreational marijuana production, processing and sale. The taxes imposed on recreational marijuana will fund the enforcement of the Liquor Control Board's rules. Medical marijuana, however, presents a totally different problem, given that only a few provisions remain in State law (chapter 69.51A RCW) after the Governor's veto in 2011. Consequently, local government regulation of recreational and medical marijuana ? where the rubber meets the road -- has resulted in confusion, moratoria, bans and lawsuits.

II. Background. A. Federal Law. The Controlled Substances Act (CSA), makes it unlawful to

manufacture, distribute, dispense or possess any controlled substance except in the manner authorized by the CSA.7 It is also illegal under the CSA to open, use, lease or maintain any place for the purpose of manufacturing, distributing or using any controlled substance.8 All controlled substances are categorized into five schedules, based on the drugs' accepted medical uses, potential for abuse and their psychological/physical effects on the body.9 Each schedule corresponds with controls on the manufacture, distribution, registration, labeling, packaging, production quotas, drug security and recordkeeping, as well as use of the listed substances.10 Marijuana is classified as a Schedule I drug.11

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B. Washington State Law. 1. Washington's Uniform Controlled Substances Act (USCA) makes it

unlawful to manufacture, deliver or possess with intent to manufacture or deliver, a controlled substance.12 Again, marijuana is listed as a Schedule I drug.13

2. Medical Marijuana Initiative. In November of 1998, the voters of the State of Washington approved Initiative 692 (codified as chapter 69.51A RCW). The intent of Initiative 692 was that "qualifying patients with terminal or debilitating illnesses who, in the judgment of their physicians, would benefit from the medical use of marijuana, shall not be found guilty of a crime under state law," but that nothing in the law "shall be construed to supersede Washington state law prohibiting the acquisition, possession, manufacture, sale or use of marijuana for non-medical purposes."14

3. Legislature's Adoption of chapter 69.51A RCW, Medical Cannabis. In 2011, the Washington State Legislature passed ESSSB 5073, which amended chapter 69.51A RCW. In this bill, qualifying patients or their designated care providers are presumed to be in compliance with the medical use of marijuana, and not subject to criminal or civil sanctions, penalties, and/or consequences, if they possess no more than 15 cannabis plants, no more than 24 ounces of usable cannabis, and as long as they meet certain other qualifications.15

This bill directed employees of the Washington State Departments of Health and Agriculture to authorize and license commercial businesses that produce, process or dispense cannabis. In addition, the bill required that the Department of Health develop a secure registration system for licensed producers, processors and dispensers. These provisions, however, were vetoed by the Governor, together with many others relating to dispensaries and all of the definitions in the bill.16

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The bill's provisions relating to individual cultivation of medical cannabis and cultivation in collective gardens were not vetoed. An individual qualifying patient may cultivate up to 15 cannabis plants in his/her own residence (or possess up to 24 ounces of usable cannabis).17 There are other limits for qualifying patients who are also designated providers.18 Up to ten qualifying patients may create and participate in collective gardens for the purpose of producing, processing, transporting and delivering cannabis for medical use.19 A collective garden may not contain more than 15 plants per patient up to a total of 45 plants per garden, and the garden may not contain more than 24 ounces of usable cannabis per patient, up to a total of 72 ounces of usable cannabis.20

Under the bill, cities, towns and counties may adopt and enforce requirements for zoning, business licensing, health and safety and business taxes relating to the "production, processing, or dispensing of cannabis or cannabis products within their jurisdiction."21 Additional protection from state prosecution exists in the bill: "no civil or criminal liability may be imposed by any court on cities, towns, and counties or their municipalities and their officers and employees for actions taken in good faith under chapter 69.51A RCW, within the scope of their assigned duties."22

The Governor's veto caused confusion in the interpretation of chapter 69.51A RCW. There is a general assumption that medical marijuana dispensaries could be prohibited by local jurisdictions, given the veto on definitions and elimination of corresponding provisions relating to the State Department of Health's regulation of dispensaries. Although the provisions relating to collective gardens and individual cultivation/possession were not vetoed, the definitions of "qualified patient" and "designated provider" were vetoed, causing more confusion.23 Another problem was that the bill's definitions of these terms provided an affirmative defense to charges

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of state law cannabis violations to qualified patients and designated providers who were on a State registry that was never established (because it was included in another vetoed section of the bill).24

4. Initiative 502. In 2012, the Washington voters passed I-502, which directs the Washington State Liquor Control Board (LCB) to regulate marijuana by licensing and taxing producers, processers and retailers.25 The regulatory scheme requires the LCB to adopt rules before December of 201326 to address the methods for producing, processing and packaging of the marijuana, to establish security requirements for retail outlets, retail outlet locations and hours of operation, labeling requirements, method of transport of marijuana throughout the state, etc. A tax is also levied on marijuana-related activities, and a dedicated fund consisting of marijuana excise taxes, license fees, penalties and other income received by the state LCB from marijuana-related activities is created. The THC concentration for various offenses is established, and possession of limited amounts of marijuana by persons 21 years of age or older is decriminalized.

5. Liquor Control Board's Rules. The LCB has now adopted Rules to implement I-502, which will become effective on November 16, 2013. In addition, the LCB issued a list of retail store locations, with the number of retail outlets that would be allowed in each county and city in Washington. While I-502 adopted the 1,000 foot separation requirement between recreational marijuana uses and certain sensitive uses (like child care centers, schools, etc.), the LCB's Rules define these uses triggering the 1,000 limitation.27

Initially, the LCB did not perform any environmental analysis before issuing the first draft of the proposed Rules, even though compliance with the State Environmental Policy Act (SEPA, chapter 43.21C RCW) was required.28 By July of 2013, the LCB had prepared a SEPA

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