Submitted by Darren Smith, Weekend Contributor
In a ruling likely to embolden other cities and counties in Washington to prohibit legal marijuana businesses Pierce County Superior Court Ronald Culpepper ruled that Initiative 502, Washington State’s voter approved marijuana legalization and regulation measure, does not pre-empt local governments from adopting ordinances banning the legal marijuana industry.
We have previously discussed local ordinances and moratoria with the city of Wenatchee as a focus (HERE, HERE, and HERE) In this case plaintiff Tedd Wetherbee, who received state approval to found and operate a marijuana retail business in the City of Fife was denied a business license by the city by reason of an ordinance prohibiting such businesses.
The ruling could lead to further erosion of the voter-approved initiative having main purposes of ending the criminal element of marijuana distribution and providing the state with an additional source of tax revenue.
Presently approximately twenty eight cities and two counties now prohibit the legal marijuana industry from operating within their respective jurisdictions. A de facto prohibition exists in many more municipalities via the practice of passing indefinite moratoria under the auspice of policy review. The ruling will provide these and other jurisdictions with justification and a basis to hold fast to their bans or enact them now that a superior court has ruled in this matter favorably.
Attorneys for the City of Fife made two arguments to support their position. One was the I-502 non-preemption, and the other that Federal Law regarding controlled substances preempts I-502. The city maintained that in the licensing process their employees would be subject to criminal prosecution in federal court by inspecting and licensing marijuana businesses, a form of accessory in facilitating a federally prohibited operation.
Judge Culpepper ruled on the state’s non-preemptory nature of I-502 but did not address the federal pre-emption issue.
Plaintiff Wetherbee argued that a purpose of I-502 was to forestall the illegal marijuana trade by offering a legal alternative and that Fife was acting against the will of the voters with the ordinance. Judge Culpepper ruled that since Fife is a small municipality having a population of less than 10,000 persons and an area of five square miles that Wetherbee could not prove countering the illegal marijuana trade in that customers could travel to Tacoma, a large city neighboring fife where several recreational marijuana retailers will operate.
It is possible that an argument against Judge Culpepper’s ruling in the Fife case might not be applicable to a large cities or counties having a large area with few incorporated cities. In this respect the ruling might strengthen the City of Wenatchee’s case because neighboring East Wenatchee presently has an operating marijuana retailer.
In a somewhat odd position Washington Attorney General Bob Ferguson voiced that local authorities could prohibit marijuana businesses by ordinance and be compliant with I-502 but then argued that I-502 does not have a preemption issue with federal law. He commented to news reporters that if the federal preemption challenge would be successful it would completely invalidate I-502 and end Washington’s marijuana industries.
The American Civil Liberties Union has taken the position that cities and counties should only prohibit the marijuana industry if voters in those jurisdictions enact such bans.
Judge Culpepper stated that I-502 could have overruled city and county prohibitions by simply adding one sentence to the law that would have prevented localities from enacting such ordinances.
The legislature had previously attempted to provide such a benefit with a rather coercive carrot and stick approach, punishing cities by withholding excise tax from liquor sales if they enacted bans and rewarding them with a greater percentage of the marijuana tax revenue. The bill did not make state law. We discussed this in a previous article HERE.
State Representative Chris Hurst, who heads the House committee that oversees the marijuana industry, said lawmakers might review the matter, unless the state Supreme Court overrules Culpepper by January, an unlikely time frame, stating:
“If you carve out large chunks of the state and say they are able to pre-empt state law, you’ll have pockets where the criminal element flourishes.”
Plaintiff Wetherbee stated he plans an appeal.
The case could ultimately cause a liability issue for the state.
The passage of I-502 required the state Liquor Control Board to license and regulate the industry. The board promised applicants the ability to operate a licensed marijuana retail business within various areas allocated by the board. Based upon this and in exchange for licensing fees various prospective retailers received the right to operate. The Liquor Control Board further cemented the promise by causing retailers to conform to stringent business requirements and oversaw their creation, planning and organization. Such requirements induced these retailers to allocate tens of thousands of dollars to meet the board’s policies and were informed that if they met such requirements they would be allowed to begin operations. Despite this cities then pulled the rug out from under several of these retailers with prohibitions despite the state promising these retailers a licensed business.
The amount of uncertainty is preventing many from entering the market due to over-regulation, legislative risk, and inconsistency in policy and approach of the state. There is one certainty that has emerged. The illegal market is likely benefiting from I-502 in that the legal implementation is unraveling in many areas and there is no risk in the individual consumer being arrested for mere possession of small quantities.
By Darren Smith
City of Fife, Washington
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