Pubdate: Sun, 26 Jan 2014
Source: Columbian, The (WA)
Copyright: 2014 The Columbian Publishing Co.
Contact:  http://www.columbian.com/
Details: http://www.mapinc.org/media/92
Author: Sue Vorenberg, Columbian features reporter

MARIJUANA LEGALIZED: NOW WHAT?

Questions Persist, Details Remain Unresolved As State Prepares To Begin
Retail Sales Of Recreational Marijuana

Licensed marijuana growing and processing businesses will begin
operations in Washington shortly before the first sales licenses are
issued, possibly by the end of March. The creation of a recreational
marijuana sales network in Washington has been slower than it was in
Colorado because that state was able to piggyback on its pre-existing
regulated medical marijuana dispensary network, which Washington
doesn't have. (Brennan Linsley/AP)

(Columbian photo illustration)

Alison Holcomb, the Seattle lawyer who drafted Washington state's
legal marijuana law, and Randy Simmons, who oversees implementation of
the law for the Liquor Control Board, smile after the three-member
board approved rules for the state's new marijuana industry on Oct.
16. The state will issue three types of marijuana business licenses:
Grower, processor and sales. Retail sales of recreational marijuana
could begin in the state as early as late spring, officials said.
(Rachel La Corte/AP)

Licensed marijuana growing and processing businesses will begin
operations in Washington shortly before the first sales licenses are
issued, possibly by the end of March. The creation of a recreational
marijuana sales network in Washington has been slower than it was in
Colorado because that state was able to piggyback on its pre-existing
regulated medical marijuana dispensary network, which Washington
doesn't have. (Brennan Linsley/AP)

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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