4 keys to moving forward with marijuana reform

Guest Opinion: A leader in the legalization effort says there is a lot more to do to fulfill the promise of the voter-approved initiative.
Medical marijuana hanging to dry

Medical marijuana hanging to dry Tom James/Crosscut

City Attorney Pete Holmes

City Attorney Pete Holmes William Ceriale

Some time this summer, retail marijuana stores will open around the state, providing residents with the legal access they demanded when they approved Initiative 502 a year and a half ago. 

While that step is huge, much work remains to be done in four crucial areas before we can call Washington’s legalization of recreational marijuana a success: (1) Regulatory enforcement to keep I-502’s promises to voters; (2) an adequate supply of legal marijuana to put illegal (unlicensed) drug dealers out of business; (3) reconciling the recreational and medical marijuana systems; and (4) incentivizing local governments not to “opt out” of I-502.

1. Legalization and Regulation. Washingtonians did not vote in 2012 to allow marijuana use by anyone, anywhere, anytime. We voted instead for a carefully regulated system for adults 21 and over that would simultaneously discourage youth access, keep impaired drivers off our roads and deter public marijuana smoking.

No one should be subjected to marijuana smoke on Seattle’s sidewalks or in our parks and playgrounds. We need to enforce I-502’s ban on smoking marijuana in public (civil infractions — not crimes), particularly where it impacts nonusers. Seattle City Council passed a bill supporting this effort last fall, and my office stands ready to enforce public smoking tickets in court.

But I-502 should not effectively exclude renters and visitors who may not have a private place where they can use marijuana legally. Marijuana tourism, thoughtfully regulated, can also boost our recovering economy. That’s why I support allowing a limited number of 21-and-over venues where adults can consume marijuana products purchased from licensed retailers. We should also limit marijuana smoking at outdoor events such as Hempfest to 21-and-over restricted areas.

2. Fighting the Illegal Market. Drug dealers contribute to the cycle of crime and violence inherent in illegal markets: They don’t “card” minors, they sell contaminated products and they escape taxation. Washington needs to ensure that I-502 licensees can produce and sell a sufficient supply to displace the illegal marijuana market. I am concerned that current rules may not allow for enough production (a total of 80 metric tons statewide, when the RAND Corp. estimates current use closer to 175 metric tons) or sufficient retail stores (only 21 in all of Seattle) to wrest the market from drug dealers. The Washington State Liquor Control Board must be prepared to react quickly to supply shortfalls by increasing production limits and granting more retail licenses.

As law enforcement partners, we need to do our part to ensure the regulated marijuana market works. Once I-502 is fully online, we must take action against those who continue to grow and sell marijuana illegally. Entrepreneurs must be required to meet I-502’s newly established quality and safety requirements, pay taxes and obtain required licenses, just like any other regulated businesses.

3. Addressing Medical Marijuana. Three years ago (before I-502), both houses of our Legislature enacted SB 5073, which would have regulated medical marijuana dispensaries similarly to Colorado’s system. Unfortunately, key provisions of the bill were vetoed, leaving an unregulated system of medical marijuana sellers, self-identifying mostly as “collective gardens.” The Washington Court of Appeals recently confirmed that existing state law legalizes neither medical marijuana nor collective gardens, but merely provides qualified patients and their designated providers with an affirmative defense to criminal prosecutions. Seattle’s unregulated medical marijuana industry can help patients as a stopgap until I-502 stores open, but we must ultimately fold medical marijuana producers and stores into a common statewide regulatory system.

Legitimate medical users have different needs than recreational users, so state law should ensure that stores carry products tailored to patients’ medical needs. SB 5887, which the state Senate — but not the House — passed earlier this year, would have done this, along with a partial tax exemption and higher possession limits. Without SB 5887, and in the absence of a change in state or federal enforcement policy, medical marijuana will likely remain a gray market for at least a year after the first I-502 stores open sometime this summer. The Legislature must enact legislation that comprehensively addresses this issue next year.


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Comments:

Posted Thu, May 8, 4:34 a.m. Inappropriate

The only reason there is legalization is that Pete Holmes and other government officials see it as a revenue source.

Cameron

Posted Thu, May 8, 11:13 a.m. Inappropriate

If that's what it took to get something done that should have been done years ago, I'm OK with that.

Posted Thu, May 8, 8:45 a.m. Inappropriate

The biggest savings will not be in tax money coming in, but in less money going out to police and prosecute the use or cultivation. It will take time for sure, but I'm glad to not feeling like a crook when enjoying a puff late at night at home.

BarExam

Posted Fri, May 9, 4:22 p.m. Inappropriate

There will be MORE prosecutions and MORE resources spent in the future. It will be a revenue war not a drug war, but they'll be one in the same. Medical marijuana is going to be eliminated, and the state and the feds will be doing everything they can to eliminate growing.

They'll fail at that, just as the original drug war failed, but if you think they're not going to ramp it up again, I think you're quite naive. And believe me, the most enthusiastic drug warriors, and spreaders of Reefer Madness II propaganda, will be Seattle's "progressives." It will be nothing if not entertaining.

NotFan

Posted Fri, May 9, 9:39 p.m. Inappropriate

This is what I-502's implementation has looked like so far in prosecution terms: https://aclu-wa.org/news/court-filings-adult-marijuana-possession-plummet. I find your doomsday enforcement scenarios extraordinarily unlikely.

Support for marijuana legalization - not decriminalization, full legalization - has hit the majority point nationwide. The notion that Seattle is going to be a leader in pushing back on that national trend stretches reality a bit too far, I think.

Posted Sat, May 10, 1:50 a.m. Inappropriate

Washington State's new scheme is anything BUT "full legalization." If there was "full legalization," anyone could go to any nursery and buy marijuana clones and seeds for the price of lettuce plants or flower seeds. It would be so common that no one would even bother to conceal it or steal it.

When was the last time your tomato patch got raided? Notice any thieves taking your spinach? Remember: Unlike booze, wine, beer or cigarettes, marijuana is a simple commodity. It is a common plant. It's pretty easy to grow. Most of the difficulties are associated with the need to conceal the growing from authorities.

The "full legalization" scheme actually aims to REDUCE the supply of marijuana to support prices. This is what the restrictions on store locations are about, and it's why there's a lottery for grower licenses, and ongoing prohibition on personal cultivation unless someone has a medical certificate;. But that's slated for elimination too.

"Progressives" lie every bit as much anyone else about marijuana, and then add insult to injury by claiming to favor "full legalization." Anyone who looks under the hood cam see exactly what a lie all of this is. NO ONE in the political arena is telling the truth that any gardener can see. No one.

NotFan

Posted Thu, May 8, 9:50 a.m. Inappropriate

Will some one please tell me where in I502 there any reference to reconciling medical marijuana into to I502? At A WA democratic function, that I attended, the author of I502 stated that I502 would not have any impact on the medical marijuana community.

jeff

Posted Fri, May 9, 6:22 a.m. Inappropriate

There is no reference to reconciling medical marijuana with I502 in I502 - it's in Section 141 of Third Engrossed Substitute Senate Bill 5034, the 2013-15 state operating budget, via a floor amendment introduced by Sen. Ann Rivers on April 5, 2013.

Posted Fri, May 9, 11:28 a.m. Inappropriate

The need to consolidate the markets arises from the fact that MJ is still illegal at the federal level. The state asked what were the conditions to prevent federal pre-emption and the US DOJ had two conditions:

1) setup the regulatory structure in such a way as to prevent "leekage" into nearby prohibition states, and

2) setup a regulatory regime for the currently unregulated medical market, perferabbly, by the feds, by merging the two markets into a single unified system

Likely the feds will crack down on dispenseries if we do not do this.

gomer

Posted Fri, May 9, 4:17 p.m. Inappropriate

I fully expect a federal crackdown, very much with the involvement, encouragement, and connivance of the state government. The bureaucrats here are absolutely no different from the Sopranos. They want their money, and they are not about to let a mere state legislature get in the way. Anyone who's watching carefully can see this. I've lost count of the number of people who are learning how to grow their own marijuana in preparation for the coming attack on the dispensaries.

NotFan

Posted Thu, May 8, 1:05 p.m. Inappropriate

What prosecution? Seattle has not been prosecuting anything. The people losing money are the taxpayers that now have teenagers addicted to marijuana and have to pay for treatment becuase everyone is too stupid and short sited to see or care how much this is hurting youth. Considering schools call and ask to have teens arrested for possessing, trafficing and using weed on school grounds and the cops do nothing. thanks Pete

kerbyrock

Posted Thu, May 8, 2 p.m. Inappropriate

Well, thank goodness we're not wasting time cracking down on students throwing parties with alcohol and parents buying beer or on teachers looking the other way when students smoke in the parking lot or behind the bleachers. We need to devote police time to cracking down on marijuana before it makes those students to lazy to get their homework done or drive drunk on the way home from prom.

Mickymse

Posted Thu, May 8, 6:21 p.m. Inappropriate

With targeted pricing at the grower, processor, and retail levels and a 25% tax for each transfer between levels people are kidding themselves if legal weed at $5000 per pound is going to affect the black market.

2wheeler

Posted Fri, May 9, 1:02 a.m. Inappropriate

No kidding. I'm familiar with these issues, and believe that both Washington State and Colorado will see relatively low tax revenue from legalization.

Over time, I think home growing will expand, especially if the dispensaries are shut down. The price differential, at least for bud, is too wide to support prices in the long run. The signs are already there, in the form of widespread discounting.

The state stores will survive on derivative products (oils, edibles, and so on) but even then only if the dispensaries are shut down. In the meantime, the trade in clones and seeds is exploding, as customers see the differential for bud and worry about the monopoly-driven crackdowns to come.

For those who can't or won't grow their own, the illegal trade will always be able to undercut the state. Enlisting the police, courts, and prisons to support a state marijuana monopoly is going to be a very dicey game.

To borrow a favorite "progressive" Seattle term, I think the word for this is "unsustainable." It's going to be quite interesting once the "progressives" realize that marijuana tax revenues will drop off quite rapidly after an initial publicity-driven surge.

NotFan

Posted Fri, May 9, 6:14 a.m. Inappropriate

The problem with this analysis is that Washington doesn't have a state marijuana monopoly. All producers, processors, and retailers are private entities. Moreover, unlike Colorado's law, which requires vertical integration, Washington's law prohibits it - producers and processors can be the same entity, but they cannot have any financial interest in retailers. So, price competition will be robust.

It might be cheaper to grow your own at home (if you have cheap space available and want to grow long enough to recoup the initial outlay for the not-inexpensive equipment, in the case of indoor growing), but it's going to be more convenient for most people to buy the high-quality product that will be available in the stores at competitive prices. The illegal trade will not be as attractive for suppliers because both demand for illegal product and profit margin will shrink while the risk of arrest will remain (and perhaps increase).

Posted Fri, May 9, 4:10 p.m. Inappropriate

I do think arrests will go up, because WA State will have every reason to protect its system. What was once the drug war will turn into the revenue war.

It's not expensive to grow one's own. In fact, once someone has acquired a few clones and/or seeds, and successfully produced a crop, they'll never have to buy any plant stock again, if you like what you decided to grow. Lights are cheap enough, and so is fertilizer. It only gets expensive once someone decides to scale up. The expenses are mainly for concealment, not growing, and wind up being mostly an initial capital outlay. The incremental cost of growing an ounce of high-quality bud is about $10, maximum.

The state will be selling it for 30 to 40 times that. Plenty of daylight, and profit, in between. There's a reason why the dispensaries currently run sales (usually in the form of giveaways) every day of the week. From what I've observed, there is rampant uncertainty among pot smokers, especially those who smoke medically -- typically the same people who've been frozen out of the "pain management" system by the medical establishment's newly puritanical stance on prescribing vicodin for (as an example I know about) the guy who fell off his motorcycle 20 years ago, was put back together with screws and plates, and used 40 mg of hydrocodone a day without incident until being cut off as an "addict."

Those are some of the people who are very, very worried -- and I think with very good reason, given the track record of dishonesty by this area's "progressives" -- that WA State's THC-centric recreational system will screw them. Along with others who have simply noticed the huge gap between the price to grow and the price to buy, you've got a big growth in clones and seeds going on. I do NOT somehow predict that the state's sales or tax revenues will be zero, only that they'll be far less than currently envisioned, especially over time. The actual users are suspicious as all get-out of what's coming, and I believe there are enough people preparing for the worst.

Try going to a bookstore in town, say, Elliott Bay, and see how fast their marijuana growing books fly off the shelves. I really don't think the "progressives" are going to see their revenue dreams come true over time. And the drug war? That's going to continue in a major way. In fact, five years from now we'll have MORE marijuana busts and imprisonment than we do now. This is 1,000% about the money. That's all the state is interested in, and nothing stands between Washington State and a fee if the state can help it. "Progressives," being the most tax hungry of all, will lead the charge in the next drug war here.

NotFan

Posted Fri, May 9, 5:53 a.m. Inappropriate

The total tax burden likely will fall somewhere between 30% and 40% (between hard alcohol and cigarettes), depending on the retail markup. See J.P. Caulkins, et al., ""How much will the 25/25/25 tax scheme actually impact the price of cannabis?" It's important to remember that the 25% levied on the wholesale price does not produce the same amount of tax as the 25% paid at retail - 25+25+25 does not equal 75 in this case. Plus, producers and processors can be the same entity and eliminate a level of taxation.

Of course, legal marijuana could very well cost $5,000 per pound, or $11 per gram, at the retail level. That's what some dispensaries are charging patients now (and more).

Posted Fri, May 9, 4:14 p.m. Inappropriate

If you talk to the dispensaries, I think you'll learn pretty quickly that the real money is in the derivatives. This explains all the hash oil fires we've been seeing lately. It'll be interesting to watch how the state cartel and its stores handle all this, and where it goes over time as home growing becomes much more popular. This will wind up being a very big threat to the state, and Seattle's revenue-hungry "progressives" will be leading the charge.

NotFan

Posted Fri, May 9, 10:07 p.m. Inappropriate

I guess we exhausted our "Reply" options above, NotFan. I'll reply here to your earlier lengthy reply.

$10/ounce is completely unrealistic in Seattle. You don't seem to have accounted for real estate costs, and I'm skeptical about power costs, too. You can't produce a consistent personal supply year-round without kicking out extra for the lights cannabis plants need in the Seattle Gray.

"The state will be selling it for 30 to 40 times that." No. The state will not be selling marijuana (your "state cartel" coinage is similarly off-base). Private entrepreneurs competing for market share will be selling marijuana. Where their prices will ultimately land is pure conjecture at this point. There is plenty of daylight and profit between actual production costs and current black/gray market prices of $200-280 per ounce.

You make much of your observations that seeds, clones, and growing books seem to be flying off the shelves. Have you given any thought to the possibility that a lot of would-be producers who stayed out of the market before I-502's passage are eager to plant a foot in the emerging industry that is now legal under state law and tolerated under federal law? Marijuana production is not just for outlaws anymore. The moderately-risk-adverse and business-savvy entrepreneurs are knocking on the door.

We should welcome competition from people willing and able to comply with public safety and health regulations and contribute their fair share in taxes like every other Washington State small business.

Posted Fri, May 9, 10:17 p.m. Inappropriate

Derivatives -- the licensed processors will extract marijuana concentrates in regulated, safe environments. Amateurs that blow up residences will get sued and prosecuted. Not that difficult to handle, not a "threat to the state."

Posted Sat, May 10, 1:36 a.m. Inappropriate

The incremental cost of electricity is 10.8 cents a kilowatt hour in Seattle. A marijuana plant yields 2 ounces. You can do the math. The actual cost to grow marijuana is very cheap. As for the difficulty, it's roughly on a par with growing tomatoes. Has its tricks, but not exactly rocket science. Concealment in an artificially scarce environment is the only reason it must be grown indoors, at least in the summer time.

If the state wasn't running a cartel, it wouldn't be excluding new growers or holding a retail license lottery. Anyone without a license to grow that plant will be liable to prosecution by the agents of the state's cartel, which operates according to monopoly/oligopoly pricing rules straight out of Microeconomics 101, "the theory of the firm." Of course, this city's "progressives" never studied anything other than art history, so they wouldn't have a clue. Let's just say that it's basic -- real, real basic: support prices and profits by restricting quantity.

The very LAST thing that the "progressives" want is competition. The wingnuts are puritans and so are the "progressives," but the "progressives" want the money so they'll team up with the wingnuts. And they'll both lie about it. In a truly open and competitive market, marijuana would be grown in the central valley of California for $3 an ounce, and sold for $15 or $20 to those who want to buy it at the store.

The growing cost isn't my number; it comes from a study done several years ago by RAND Corp. In Washington, the state cartel will move heaven and earth to prop up prices and tax revenue on a commodity that, if truly legal, would be ubiquitous and damned close to free. Over time, the state is going to find it impossible to defend its cartel, at least for the commodity product.

NotFan

Posted Sat, May 10, 2:28 p.m. Inappropriate

p.s.: I can see that Alison Holcomb is one of those "progressive"art history majors I mentioned. I'd ordinarily explain what an incremental cost is (as in my statement, "The incremental cost of growing an ounce of high-quality bud is about $10, maximum.") but I think it would fly right over her head. By the way, I think $10 an ounce was being generous. RAND pegged the cost in CA's central valley at $3 an ounce, and I believe that might be a fully loaded cost.

NotFan

Posted Fri, May 9, 5:52 a.m. Inappropriate

"If that's what it took to get something done that should have been done years ago, I'm OK with that."

Apply, rinse and repeat for a number of issues then right Ben? How about adult consentual prostitution? As long as is it is taxed and regulated as in many countries of the world. Sex should be a taxable event.

What about harder drugs? Should the indoor smoking ban be repealed for private clubs and businesses as long as they pay the State? Should non-tribal casinos with electronic gaming be allowed as long as they are taxable? This is fun! And it could replace the proposed tax increases with voluntary contributions.

Cameron

Posted Sat, May 10, 2:01 a.m. Inappropriate

I'm fine with legalizing and taxing prostitution. If it's good enough for Nevada and Craigslist ...

NotFan

Posted Sat, May 10, 5:39 a.m. Inappropriate

There are many personal choice "freedoms" that the Government restricts,but magically will consider allowing if they are able to realize a significant enough revenue stream. Unfortunately, in Olympia unless you are able to outbid their current contributor base, like the Tribes on gaming and the lawyers and lobbyists on smoking, you will never get the opportunity to exercise those freedoms.

Cameron

Posted Sat, May 10, 10:12 a.m. Inappropriate

Notfan, to answer yor question regarding the states status as a cartel. The state is not holding a lottery for growing licenses. The lottery is for retail licenses in areas where applicants exceeded the number of allocated outlets. Your rant would be more palatable if it relied more on facts.

redtail

Posted Sat, May 10, 11:56 a.m. Inappropriate

You're correct. It's a lottery for retailers. The state cartel has already slammed the window shut on growing. They don't want competition. The cartel wants to do what cartels always do: restrict quantity to raise the price. This state's "progressives" are all about the ripoff. And what's this about "allocated licenses" for retailers? That's not "full legalization," that's classic cartel behavior too.

I don't smoke pot and am not involved in the business in any manner. But if I did use it, I'd be doing what a lot of these people are doing: getting information and seeds and cultivars, and making plans to grow it myself, concealed as well as possible. We don't know exactly what the state and the feds are cooking up, but we do know that it'll be a lot more restrictive than the current situation, and a lot more expensive.

These "progressives" are never, ever to be trusted either with your money or your personal freedom. They don't respect the latter in the least, and they want to take as much of the former as they can get away with. If that means ramping up the drug war under a different pretext, they'll do it in a heartbeat. If marijuana had been "fully legalized," there would be no more barriers to entering the business than there are to growing cherries and selling them at the farmer's market. You'd never see this kind of cartel bullshit:

http://liq.wa.gov/mjlicense/apply_for_a_marijuana_license

From here on out, it'll be details like:

- How quick to completely shut down the medical side

- What propaganda to use against those who grow it at home. I predict a lot more articles like this will appear in Seattle's media:

http://www.mercurynews.com/crime-courts/ci_25718377/san-jose-marijuana-grow-houses-have-hidden-dangers

- How nasty and intrusive to be against those who grow for personal use

The drug wars aren't over in Seattle. They are going to ramp up in a big way.

NotFan

Posted Sun, May 11, 10:11 a.m. Inappropriate

Notfan.....you spend an awful lot of time talking about what other people believe. Care to explain to me what my beliefs are?

redtail

Posted Sun, May 11, 1:58 p.m. Inappropriate

How about we start by saying that you believe in non-sequiturs?

NotFan

Posted Mon, May 12, 10:42 a.m. Inappropriate

Actually NotFan i do believe in non-sequiturs. I also believe that
Allison Holcombe is not one of those "progressive art history majors". She is however a lawyer with the ACLU and the author of I-502. As such she might have some valuable insight.

redtail

redtail

Posted Wed, May 14, 1:24 a.m. Inappropriate

@ Peter Holmes
So, sounds like you will not do anything about ordinance about
major marijuana activity needing a license from the state. So,
how does this stance jive with the recent court of appeals ruling?
So, if a collective garden/dispensary/access point stays under
the major marijuana activity and follows what is allowed under
State v. Shupe, is it business as usual?
Otherwise, why in the heck would a I-502 retailer open up shop with
200 dispensaries in Seattle alone + all the black market, until this
confusion is cleared up? First mover...to bankruptcy. Will you
enforce the current ordinance or is it just a big nothing burger
from Licata?

@NotaFan
Got it. You don't like I-502 and state cartels and libtards.
Btw, the Rand study you mention modality of growing is about
mechanized, industrial farms, like one would see in eastern WA
wheat circles of about 1000 acres. Huge scale, low prices.
I highly doubt the Feds will allow anytime soon those types of farms.

@AlisonHolcomb
Much respect, but not a fanboi.
Seen your influence with Senator Kohl-Welles and Rivers.
Maybe even, Rep. Cody, but don't think so. Too bad things
couldn't be hammered out for medical and revenue for cities.
Agree with your analysis of three tier system, but failed to
mention that there will be significant failure rates. But hey,
that's business. With the lack of will and leadership in the
Wa state legislature and local jurisdictions, how can a Federal response not happen?

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