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WA State Moves to Regulate Marijuana -- What You Need to Know About the Groundbreaking Reform

Voters in the state approved marijuana legalization in November. Now, it's time to establish a system to tax-and-regulate.

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"Our constituency includes two separate US Attorney districts that have disparate levels of enforcement activity. If the US Attorney's Office in the Eastern District gets wind of any marijuana operations, they shut them down. They're discussing zoning for grows the size of a football field in Seattle, and good for them, but that won't fly in eastern Washington. If they ignore the little guy, that's going to cut out anybody in eastern Washington, that's why we want them to prioritize for small growers under 99 plants."

The 99 plants number is based on federal mandatory minimum sentences that kick in at 100 plants, but is also based on the observation that federal prosecutors are unlikely to go after grows that small when there are bigger fish to fry -- and bigger punishments to hand out.

"Our concerns were very similar to most everyone else who was frustrated with the board's definition of what can be sold at retail and it's not allowing extracts like hash oil," said Kurtz, who worked with the Washington Cannabis Association in crafting its comments. "Nobody is happy about that. There are a lot of business people who were counting on that for their business model. The whole purpose of the initiative was to get rid of a black market, but by not allowing that retail, a black market will remain. We might as well actually regulate because it's going to happen regardless, but they don't seem very keen to change," she said.

"The draft regs also don't allow for outdoor grows, but I have some hope they will change that," Kurtz added . "They've heard back from a lot of people about the need for outdoor grows, including Seattle City Attorney Pete Holmes. Forcing everyone indoors increases energy consumption, and growing outdoors is less expensive."

On the upside, the LCB seems to be crafting reasonable regulations for out of state visitors and for preventing diversion, although diversion probably won't be a big issue, Kurtz said.

"This doesn't limit out of state people at all," Kurtz explained. "You can buy an ounce at a time, which is the limit of what you can legally possess."

There is no integrated system to track purchasers, so out-of-staters could theoretically go from retail outlet to retail outlet, building their stashes an ounce at a time, but that doesn't mean there will be an issue with diversion to other states, Kurtz argued.

"Economically, it just doesn't make sense," she said. "If someone from North Dakota wants to sell pot there, they could come here, but they would be paying full retail and having to go to a bunch of stores, and they wouldn't have much of a profit margin paying retail. Or they could just grow some in their basement in North Dakota."

A larger issue is diversion from cultivation sites, but Kurtz argued that a combination of security and grower self-interest should limit that.

"There is going to be a lot of recordkeeping, an electronic system where growers will have to input data daily," she said. "There are product quarantines, there are security cameras. But more importantly, people are preparing to invest a lot of money in this to have a legitimate business, not to divert pot to the black market. I've been meeting a lot of people who I don't think would risk their licenses to sell to the black market."

Washington's legal, regulated marijuana commerce is still a work in progress, but stakeholders pronounced themselves generally satisfied with the process so far.

"We are in completely new territory in terms of creating a legal marketplace and we're being very vigilant. It's too soon to tell whether this new environment is going to adequately protect youth and be an effective public health approach," said the Children Alliance's Gould.

 
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