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Originally published Thursday, January 16, 2014 at 9:46 PM

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State AG’s opinion on barring pot businesses stirs doubts

Cities and counties can ban or block legal pot businesses, according to state Attorney General Bob Ferguson. But the impact of his nonbinding opinion remains cloudy.


Seattle Times staff reporter

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State Attorney General Bob Ferguson said Thursday that cities and counties are allowed to effectively ban recreational-marijuana businesses.

In an advisory opinion sought by the state Liquor Control Board, Ferguson said Washington’s law allowing legal pot under Initiative 502 did not pre-empt local governments from banning or effectively blocking marijuana retailers, producers or processors.

The Liquor Control Board (LCB), in charge of implementing I-502, now faces difficult questions, as it is processing more than 7,000 applications for pot-business licenses.

The board planned to license 334 pot stores statewide and allocated stores in every county and in cities that already have de facto bans, such as Kent and Lakewood. Will the board now reallocate those licenses to other jurisdictions? Or, does it stay the course? Either decision could lead to lawsuits.

Board Chairwoman Sharon Foster said voters would be dismayed by Ferguson’s opinion, which could keep legal pot merchants from undercutting illicit dealers in some jurisdictions.

But the board has not decided the next steps, said agency spokesman Brian Smith.

“The law is more clear today than it was yesterday but it remains cloudy in numerous areas,” said Mark Lindquist, prosecuting attorney for Pierce County, which has banned legal pot businesses in unincorporated areas until the federal government changes its stance on pot.

State Rep. Chris Hurst, D-Enumclaw, said a deep breath was in order.

Ferguson’s opinion is nonbinding, noted Hurst, chairman of the House committee that oversees I-502. What’s more, lawmakers have time to make adjustments, he said.

One bill already has been filed that would compel cities and counties to allow legal pot businesses or lose state revenue.

Of the state’s 75 most populous cities, three have effective bans on legal pot businesses and 36 have moratoriums, according to a report from the Center for the Study of Cannabis and Social Policy. An additional 14 have taken no action, the center said, while 22 have begun to regulate legal pot businesses.

Officials in resistant cities say the federal prohibition of marijuana prevents them from allowing pot businesses in their jurisdictions.

Ferguson’s rationale

In explaining his opinion, Ferguson said the state constitution gives cities and counties broad authority and I-502 did not intend to pre-empt that. If the authors of I-502 wanted to, they could have done so.

Alison Holcomb, chief author of I-502, disagreed.

Authors of the law thought it would be redundant, Holcomb said, to specify that local bans weren’t allowed.

The law, she maintained, gives state officials the authority to determine the maximum number of stores per county to ensure consumers have adequate access to pot. “You can’t say counties are allowed to ban businesses without conflict with the provision that there be adequate access,” she said.

The LCB should proceed as planned in licensing businesses, she said, even in resistant cities and counties. If the board reallocated stores to other jurisdictions, it would risk lawsuits from entrepreneurs who have incurred expenses by following the state’s rules.

On the other hand, some say the board risks a different problem if it proceeds as planned: Entrepreneurs licensed by the LCB in Kent and Lakewood might sue the cities. That could lead to a court case based on the idea that federal law trumps state law, which, given the federal prohibition of marijuana, might end with a court finding the state’s recreational-pot law illegal.

“The conflict between federal and state law remains,” Lindquist said. “The irony here is that while the advisory opinion strengthens the legal position of local governments if they take the issue to federal court, it also lessens their incentive to take the issue to federal court.”

Predictions on fallout

Seattle lawyers Ryan Espegard and Hilary Bricken, who both advise pot entrepreneurs, predicted Ferguson’s opinion would embolden resistant cities.

But Candice Bock of the Association of Washington Cities said some cities may still be wary of being sued by a licensee. “That’s why every city has to look at the issue more broadly.”

Cities that ban legal pot merchants are only helping illegal dealers in their communities, said Hurst. “I find that laughable,” he said.

Dan Roach, chairman of the Pierce County Council, said pot use that was discreet before legalization has become brazen in a way that’s negatively impacting neighborhoods.

Although 54 percent of the Pierce County electorate backed I-502, Roach believes they weren’t fully informed, and unaware the initiative didn’t earmark tax revenues for local law enforcement. “If voters knew what I knew, they would side with me,” he said.

Lakewood Mayor Don Anderson offered a similar rationale. He predicted Lakewood would incur costs related to I-502, as it does with alcohol-related issues. “We’d have no real control over it, and no revenue from it,” he said.

Bob Young: 206-464-2174 or byoung@seattletimes.com

On Twitter: @potreporter



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