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Originally published Tuesday, January 22, 2013 at 9:30 PM

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Inslee: Wash. to keep moving forward on legal pot

Washington Gov. Jay Inslee and Attorney General Bob Ferguson met with U.S. Attorney General Eric Holder on Tuesday, but came away no further enlightened about how the federal government will respond to last fall's votes in Washington and Colorado that set up legal markets for marijuana.

Associated Press

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OLYMPIA, Wash. —

Washington Gov. Jay Inslee and Attorney General Bob Ferguson met with U.S. Attorney General Eric Holder on Tuesday, but came away no further enlightened about how the federal government will respond to last fall's votes in Washington and Colorado that set up legal markets for marijuana.

The two states voted to legalize recreational marijuana use by adults over 21 and to create state-licensed systems of growers, processors and retail stores that sell heavily taxed pot. The creation of those regulatory schemes poses a possible conflict with federal law, which outlaws marijuana, and the Justice Department hasn't said whether it will sue to block the state laws.

Inslee, a former Democratic congressman who was sworn in as governor last week, told reporters after the meeting in Washington, D.C., that the state will move forward to establish rules for the market.

Hundreds on Tuesday night attended the state Liquor Control Board's inaugural public forum on developing those rules. The agency is charged with regulating marijuana under Washington's measure, and chairwoman Sharon Foster said the board was considering changing its name to include "cannabis."

The turnout surprised the board's members, who said they planned to add another forum in Olympia in addition to others already scheduled around the state.

Many attendees said they're hoping to obtain licenses to grow, process or sell marijuana. They called on the board to grant a large number of licenses to help keep marijuana a "cottage industry" in the state, and they said having prior marijuana-related convictions shouldn't disqualify people from obtaining licenses.

Jamen Shively, a former Microsoft manager, told the board he plans to create a high-end company selling only the best "artisan-grown, premium" marijuana. He urged the board to err on the side of caution - of more controls, testing and auditing - "so the feds line up behind us and not oppose what we're doing."

One speaker called for a prepaid state-run financing program.

Inslee said the meeting with Holder was collegial and the attorney general had a lot of questions but gave no indication about when the department might make a decision. Colorado's governor did not attend.

"I went into this believing that our state should continue to move forward with our rulemaking process," Inslee said. "Nothing I heard during that discussion dissuaded me of that view."

During a speech in early December, Holder said the department would have a decision relatively soon.

Inslee described the meeting as the opening of an ongoing conversation. He said he gave Holder details of the role of state employees - noting that although they issue licenses to private entities, they won't be charged with handling or distributing the weed.

He also said he promised to give Holder further details how the state might prevent "to the extent humanly possible" Washington-grown marijuana from being diverted to other states. That could include digitally tracking legally grown plants and processed marijuana to preclude large-scale diversion.

Ferguson said his message to the Justice Department was that the state hopes to avoid a legal fight, but that his office has a team of lawyers preparing just in case. He declined to comment on the strength of Washington's legal arguments, saying it was premature to do so.

Marijuana remains banned under the Controlled Substances Act, and the Justice Department could sue on the grounds that the state legalization schemes conflict with state law. When state and federal law conflict, federal law wins out or "pre-empts" state law.

Many constitutional law scholars say Washington and Colorado's efforts fall in that category, though proponents of Washington's Initiative 502 argue that it could actually complement federal law enforcement efforts by legalizing small amounts for personal use, allowing the feds to focus on large-scale, organized drug crime.

The Justice Department also could seize tax revenue collected as proceeds of illicit drug transactions.

Alison Holcomb, the drug policy director at the American Civil Liberties Union of Washington, was I-502's campaign manager. She called news of Holder's meeting with Inslee and Ferguson reassuring.

"It indicates the federal government is doing what we hoped they would do - taking the time to examine what the initiative proposes, and allowing the rulemaking to develop," she said.

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Johnson can be reached at https://twitter.com/GeneAPseattle

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