By: Drew Matthews drew@cannabisandsocialpolicy.org
On January 16, Washington State Attorney General Bob Ferguson released his long-awaited opinion regarding local government’s right to ban marijuana businesses, saying, “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.”
In short, Ferguson has affirmed that local governments have the authority to ban marijuana businesses.
Alison Holcomb, the mastermind of I-502 and current criminal justice Director at ACLU Washington responded to the legal opinion, saying, “Despite the initiative clearly and specifically giving the Liquor Control Board the task of licensing enough stores in each county to meet the demand for marijuana legally, it appears legal businesses may be forced to sue to be allowed to compete with the black market.”
The Liquor Control Board (LCB), which requested the Attorney General’s opinion, was disappointed by the decision, saying, “We’re not yet sure how this opinion will change the implementation of the initiative. If some local governments impose bans it will impact public safety by allowing the current illicit market to continue. It will also reduce the state’s expectations for revenue generated from the legal system we are putting in place.”
WHAT ARE THE IMPLICATIONS?
Lower tax revenue
Tax revenues will be considerably less than projected (currently $1.9 billion over 5 years) if municipalities are allowed to enact local moratoriums or bans. Tax revenues are to be dispersed to the Department of Social and Health Services, the state health care fund, research programs on drug abuse prevention and the impacts of legalization, and public education programs.
Expansive dry areas in rural and southern Washington
Large parts of southern and eastern Washington have passed moratoriums pausing implementation of I-502 (See Local Implementation map). All of these moratoriums expire in 2014, at which point city councils and county commissioners must either extend the moratoriums, ban licensing altogether, zone specifically for marijuana businesses, or treat marijuana licenses like any other business. If the current moratoriums stay in place or are replaced by bans, a person in Vancouver, Washington would have to travel over 100 miles to Lewis County to purchase legal cannabis.
Black markets will continue to thrive
In order to compete with the black market there must be significant local buy-in. Cities and counties that choose to ban or place excessive zoning restrictions on marijuana businesses are leaving their local black market unchecked. If the current number of moratoriums remain in place, nearly 50% of Washington’s most populous cities will have unchallenged black markets. As the LCB stated, an unchecked illicit market threatens public safety.
POLICY SOLUTIONS
The State must give local governments incentive to implement the law. A bipartisan bill recently introduced in the state legislature would punish local governments that ban marijuana business by withholding their share of disbursements from the state liquor-license account. I offer several other policy options that will smooth implementation of I-502.
Disperse marijuana tax revenues directly to governments that implement
Under the current law, local governments will only receive marijuana tax revenues in the form of grants to fund local community agencies dedicated to reducing youth marijuana use. Alternatively, lawmakers could give local governments more flexibility with these funds, thereby increasing the financial incentive to fully implement I-502. A portion of the revenue collected from marijuana taxes should be allocated to local governments that comply with I-502 with no strings attached. This money could be used as needed by local governments in order to fund other local initiatives, including law enforcement, education and transportation.
Allow home delivery
People in rural parts of the state may not have the resources to drive dozens of miles for a good that should be available locally. A solution is to allow retail stores to deliver to customer’s homes. This practice is not currently allowed because the law states that transactions must take place in the licensed establishment. Black market dealers deliver, further incentivizes consumers to remain in the illicit market.
Remove the cap on the number of retail stores
The cap on retail licenses has already challenged the viability of success for I-502 by creating retail monopolies in certain parts of the state. The combination of widespread moratoriums and caps on retail stores per county will create “green oases”, where only one or two retail stores are available for dozens if not hundreds of miles.
Demand is likely higher than what the state expected when they wrote retail regulations. A recent RAND study has projected that marijuana consumption in Washington is likely twice as much as the figure used by state regulators. More stores should be allowed, especially in areas surrounding dry zones. Hopefully this will lessen the transportation burden for consumers, and create greater competition for pricing, variety, and quality of product.
Increase local pressure
If the State will not force cities and counties to implement I-502, that pressure must come from citizens. People living in areas with moratoriums or bans who wish to see the law fully implemented must engage their local governments. Council members and commissioners have enormous power in regulating and implementing the law, and the success or failure of I-502 is contingent on local cooperation. Elected officials may be wary of the political backlash if they implement I-502, and need to know that constituents support implementation of a legal marijuana