The Messy Reality of Legal Pot
The Mayor Courts Pot Entrepreneurs, the Governor Fends Off the Feds, and There's Still Almost Nowhere to Open a Pot Shop in Seattle
DEPARTMENT OF PLANNING AND DEVELOPMENT
Last November, 1.7 million people in Washington State opened their ballots and voted yes on Initiative 502, effectively legalizing marijuana. In the past month, all those individual votes have snowballed into big money, logistical puzzles, and laudable official action as Governor Jay Inslee, state attorney general Bob Ferguson, and the state liquor control board are barreling ahead to create America's first fully regulated pot market.
Last Monday night, Seattle mayor Mike McGinn attended a ritzy convention at the Washington Athletic Club, which was swarming with cannabis insiders and members of the new marijuana business lobby who pay annual dues ranging from $1,000 to $5,000. "We have regulations for the number of goats and chickens you can keep," McGinn said. "Where you can grow marijuana is a decision we will have to make as well.
"It's fascinating that this is the new normal," he beamed.
Despite the mayor's enthusiasm, our fledgling cannabis industry has some serious zoning problems—the number of places a retail shop could open are few and far between (due mostly to the state's rules, not the city's). According to a map produced last week by the city's Department of Planning and Development, the largest swath of land available for retail pot shops is in industrial lands including Boeing Field.
You could open a pot store there, but you'd be on a runway.
Still, state officials are careening ahead to meet the December 21 deadline to issue retail licenses.
Appealing to Pot Entrepreneurs
The National Cannabis Industry Association gathered downtown on January 28 to hear the mayor talk about the future of marijuana in Seattle. For an industry that has long operated in society's margins, this catered, formal affair—professionals in suits hobnobbing with out-of-state investors—was a radical shift. Three crystal chandeliers, each as big as a Smart Car, hung above the crowd.
"This is a trade association, like the builders, who want to know the regulations," said McGinn, who pledged to keep his doors open to members of the marijuana industry. "Boy, how things have changed."
Making New Rules
The week before, on January 24, more than 500 people (a maximum-capacity crowd) showed up at City Hall for the Washington State Liquor Control Board's first Seattle hearing on the new rules to license marijuana growers, processors, and retail outlets. "This has never happened, never been implemented in the world," said board chair Sharon Foster. Since so many people were signed up to speak, the board said anyone who used less than two minutes earned a "brownie point."
Dozens of people spoke, and the most common concern was that giant pot producers—the Marlboros and Budweisers of weed—would push out craft producers. A handful of local cannabis businesses have hired Phil Wayt, the former executive director of the Washington Beer & Wine Wholesalers Association, and are using his relationships with the liquor board to advance the pot industry's agenda. Wayt told the board he would present a regulatory "blueprint... that will look like the craft beer model, where there is no limit on [the number of] producers."
In addition to considering how many producers will be allowed, officials are considering security standards, indoor versus outdoor cultivation, the number of retail outlets to be licensed, background checks, and more.
"The board's willingness to listen to stoners for hours on end is admirable," says Ben Livingston, of the local Center for Legal Cannabis. "I am cautiously optimistic that our liquor control board will create the most thoughtful and practical cannabis business rules in the world. I think they want to do right by the voters."
Defending Us from the Feds
Medical marijuana is illegal under federal law, though it's mostly tolerated. But what will federal prosecutors do about our newly legal recreational marijuana?
On a conference call with reporters, Governor Inslee said he was encouraged by a meeting last week with US attorney general Eric Holder. "I believe we will get a fair evaluation of this by the attorney general," Inslee said. While Holder didn't share his long-term intentions with Inslee, the discussion focused on practical law-enforcement priorities such as making sure that legal marijuana doesn't escape the state's borders. Inslee added, "I believe it is my duty to follow the intent of the voters of the state of Washington."
Other state leaders are also defending the legalization law. "Washington is prepared for a legal fight," said state attorney general Ferguson. Of course, he added, "I told AG Holder we want to avoid a legal fight."
But Where to Sell It?
As written, I-502 bans marijuana retail storefronts within 1,000 feet of certain properties, including parks, schools, arcades, libraries, community centers, and public transit centers. The city has proposed its own restrictions on where marijuana outlets can open their doors (such as banning them on blocks zoned strictly for single-family houses). What happens when you overlay the state's restrictions with the city's? As this map from the city shows, there is almost no place in Seattle to actually set up a pot store: The yellow areas indicate where retail outlets are "potentially allowed." Even these are largely industrial lands and locations without actual storefronts to rent (e.g., the shipyards of Harbor Island, the landing strip at Boeing Field, and one block along a residential arterial in Ballard).
Although there are tiny pockets where business-minded types will almost certainly set up shop (such as 23rd Avenue and Union Street), this is zoning at its most backward. The most populous, dense neighborhoods in the city—like Belltown and Capitol Hill—have zero yellow zones to sell cannabis. The locations where most people would actually want to buy marijuana are the same places where marijuana stores will be prohibited.
Why was the initiative written this way?
"The federal government has made it clear that locating marijuana storefronts within 1,000 feet of locations frequented by minors is a major concern," says Alison Holcomb, who wrote the ballot measure and led the I-502 campaign. (She's absolutely correct—the Feds have cracked down on medical pot dispensaries in these areas. It was critical to pass I-502, break through the wall of prohibition, and work out the details later.) "In drafting Initiative 502, a primary goal was minimizing friction with federal marijuana-enforcement policy to maximize the possibility of actual implementation," she says. "A whole range of issues undoubtedly will need to be revisited down the road."
But the Washington State Liquor Control Board, which is fleshing out rules for licenses, can't tweak these zoning rules. Board member Chris Marr says the WSLCB will consider a final map, and while it may "shrink" the number of locations cannabis stores could be allowed in Seattle, the board "can't expand it."
On the positive side, Holcomb says there is potential for marijuana delivery. The law says that financial transactions must occur inside licensed retail outlets, "But I don't see why this couldn't allow credit/debit sales over the phone with an employee at the retail outlet, for delivery by an employee of the retailer," she says. "On the other hand, calling in an order and then paying cash at the point of delivery might be problematic."
We've got a lot to work out.