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Published on Tuesday, September 3, 2013

Marijuana implementation: Next steps for cities and word from the federal government

When it comes to implementing the marijuana licensing system cites have options, and some have already taken action. Cities across Washington are looking at either adopting zoning code or ordinances that outline exactly where these businesses may or may not operate. They are also using moratoria and allowing more time to see the final rules adopted by the Liquor Control Board, for the legislature to reconcile medical marijuana businesses with recreational, for rulings from court cases, and for any action to be taken with Federal preemption.

AWC recently held an interactive webinar that can be viewed along with the presenters’ material on our website. This webinar focused on cities options and the pros and cons of each path. Additionally participants heard from zoning and land use attorneys and professionals who described potential liability and litigation risks as well as permit and licensing options. AWC produced an FAQ sheet found here, and MRSC wrote an article summarizing the information provided. The basic theme is all of these options have pros and cons - it is up to each city to determine its policy goal and take the appropriate steps to achieve that policy goal.

What do the Feds say? After a great deal of waiting and watching, the federal government announced that it will not try to block Washington or Colorado’s recreational marijuana laws. A Department of Justice (DOJ) memo released August 29, provided guidance regarding marijuana enforcement. The federal government still sees marijuana as a dangerous drug whose distribution and sale is still illegal and a serious crime. The memo outlines the focus for DOJ is to prevent distribution to minors, revenue from ending up in the hands of criminal enterprises or cartels, interstate commerce, and growing on public lands. In other words, these priorities are the guide for US attorneys and DOJ law enforcement to focus their efforts. With regard to Colorado and Washington passing legalization laws, DOJ says it expects states and local governments to establish a strong and effective regulatory and enforcement system that will limit any threat those laws could pose to public safety or public health. It calls for state and local government to have robust controls and procedures documented and follow through with enforcement. The LCB responded to the memo in a press release found here.

What lies ahead? The LCB will formally adopt rules on September 4, followed by a 30-day window to accept applications beginning November 18. Cities should expect to begin receiving notification about license applications in their jurisdiction shortly thereafter. The LCB reports that we are likely to see the first licenses officially issued by mid-March or early April of 2014.

And how about all the revenue? The initiative outlined a specific taxing scheme. Now marijuana is taxed at 25% at production and sale. The money all goes to the State and is divided into numerous funds for education, prevention, studies, administration by LCB, health care and general fund. However, while we all expect an increased need for enforcement and public safety at the local level, there is no additional funding currently being provided to cities. The only revenue cities will see from the industry is local B&O and sales taxes.

AWC plans to work with the legislature and the LCB to advocate that cities receive funds to address the public safety and enforcement needs.