Washington’s Cannabis Industry – the Woes and What’s Next - Part 2

If you missed Part 1 of this important topic, click here

Season 3, Episode 5 – Who is in favor of the cannabis industry? Who’s against it? Who is looking around the room unable to make a decision? Relighting the ongoing discussion about the Washington cannabis industry, brings us to Part 2 of a deep dive into what’s happening in our state. In this podcast episode, we explore what’s approved and what’s in a holding pattern in specific counties. Who has voted in favor of letting cannabis-related businesses operate, and who is saying “no way”. In this second of two parts podcast, JDSA attorney Lindsey Weidenbach keeps us tuned in with Washington’s Cannabis Industry – the Woes and What’s Next - Part 2.

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Announcer:  This is JDSA's Law Talk. This is the program that gives you the straight facts on our laws and how they affect your everyday personal and professional life.

Host:  What we primarily discuss are topics for statewide and national listeners, today's show dives a bit closer. For our local listeners, right here in north central Washington and the Columbia basin, it's our second installment in a two-part series on challenges facing Washington State's cannabis industry.

In this episode of JDSA's Law Talk, attorney Lindsey Weidenbach joins us again as we tailor the discussion to local issues impacting the regional cannabis industry.

Lindsey, always good to talk to you.

Lindsey:  Hi, Clint. How are you?

Host:  I’m fantastic. I'm your host, Clint Strand, by the way. Now, in our last episode we discussed what's happening that impacts the entire state of Washington. For our friends that did not listen to the podcast, and why didn't you? Go ahead to jdsalaw.com. Check out all of our podcasts.

Let's bring our listeners up to speed, though. What are some of the major issues that we're dealing with here?

Lindsey:  Yeah, Clint. Big picture, we're looking at over-supply, which is driving down prices. We have a tracking system that's caught into some seed-to-sale issues and delays.

Diversion is an issue here in Washington. We're seeing our cannabis leak into other states. And then, Jeff Sessions rescinded the Cole memorandum, which was a Justice Department policy giving us eight points, sort of, to live by. And with the rescission of that, it created some chaos and you can read more about this at the blog at jdsalaw.com.

Host:  You certainly can, Lindsey. I except, coming up next we are going to talk about regional implications of cannabis law and how it's changing right here on JDSA's Law Talk.

Announcer:  You're listening to JDSA's Law Talk. When you need legal advice, call JDSA Law, the highest quality legal support since 1946.

Host:  If you'd like to read more in-depth articles on important legal topics, read through our news articles and blogs at jdsalaw.com.

It is JDSA's Law Talk, I'm your host, Clint Strand, talking with Lindsey Weidenbach about the cannabis industry.

Now, Lindsey, we set the scene starting out this talk, now let's talk regionally right here in north central Washington, what is causing continued challenges?

Lindsey:  Well, here in Washington, AG Bob Ferguson has taken the position that local governments, so cities and counties, can preempt I-502. They can pass laws that ban or limit the production and sale of cannabis. And so, here locally, we're seeing the counties taking varying positions.

Chelan County has a conditional use permit process that they've rolled out. Yakima County has completely banned it and they have since 2014. Okanogan County put up a moratorium in 2016 and they put another one up in 2017 and that's just been repealed or they're reopening their market. And all of these impacts, all of these different varying ways of dealing with cannabis impact our local growers.

Host:  I understand that there is a desire to make sure counties craft what's best for their local populaces, but it feels like some of these counties are simply looking at ways to say, "We don't want this here, period. How do we make this happen?"

Lindsey:  There is a bit of a moral code behind it.

Host:  And that's something that each county basically has to deal with because Bob- Bob. Bob Ferguson-

Lindsey:  Bob Ferguson. Our friend, Bob Ferguson.

Host:  Our friend, Bob, he's not going to put the hammer down. He's going to leave this up to the counties no matter what.

Lindsey:  Yep. Yeah, and we've seen that come down in a few cases, as well. That the city of Wenatchee had banned retail stores and a retail licensee sued the city. And AG Ferguson joined that lawsuit and issued that opinion.

Host:  Well, let's talk a little bit about Chelan County, the county that Wenatchee and Leavenworth and Chelan and Entiat all reside in ... and Cashmere.

Lindsey:  And Cashmere.

Host:  Yes. So, let's talk about a process that if you deal at all with counties you know intimately.  If you don't, let's get you updated on conditional use permits, everybody's “not so” friend.

How exactly did this originate?

Lindsey:  Well, Chelan county placed a ban on marijuana after they had allowed people to get licensed and start growing. So, it was a retroactive ban which created a lot of issues and was creating some litigation. And the county was always saying, "Hey, our intent isn't to actually ban it. We need some time to create and come up with sensible, logical zoning regulations for this plant."

Host:  Now, we're not going to make conditional use permits the boogie-man here. There are reasons why it's needed.

Lindsey:  Absolutely. And these are conditional use permits on steroids, though, Clint. Because it's not just what's in the conditional use permit. The code section covering marijuana in Chelan county also adds certain aspects that you need to cover on your conditional use permit for cannabis. So, they go above and beyond the typical CUP, conditional use permit process.

Host:  Without getting into the weeds, let us know what some of the challenges and implications of this are, like in a real-world format.

Lindsey:  It's a cost and a time situation for these folks. They run on really small margins. So, I would say the biggest challenge and impact locally is creating the funds for it and the time for it. When you're running a small business, running on these tight margins, adding the, you know, $1500 or so, filing fees and then getting all of the information together, one of the requirements on this CUP is that you have to have a mechanical engineer create a report that you're not going to be intrusively emitting odors. And so, there's an odor report that you have to submit and hiring that engineer is costly.

Host:  But again, when you're talking about property values and quality of life, look, it's not an accusation, it's an observation. Pot's kind of stinky.

Lindsey:  And they'll tell you, growers will tell you, if they're pot is good it means that it's ... like, the stinkier it is, the better it is.

Host:  Right.

Lindsey:  And so, yeah, that's why these conditional use permits do make sense. It makes sense that it would in an agricultural zone, or a rural zone. It makes complete sense.

Host:  So, none of us have a crystal ball, but when you look at the situation and you look at what's come before, and you look at what we are dealing with right now, what's your best guess at what the future holds?

Lindsey:  My best guess for the Chelan county area would be that it finds a happy medium where we roll back a bit of the encumbrances on the industry, but we do focus it on those agricultural and rural zones.

Host:  Alright. Very good. Coming up next in JDSA's Law Talk, we'll look to the south and talk about Yakima County's ban on cannabis. We'll look to the north, see what Okanogan County is up to and we'll bring it all together. That's coming your way next, right here on JDSA's Law Talk.

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Announcer:  This is JDSA's Law Talk. Hear more Law Talk programs now, at jdsalaw.com.

Host:  Remember you can always connect with us on Facebook and follow us on Twitter. Just search for @jdsalaw. It's JDSA's Law Talk. I'm your host, Clint Strand, talking with featured attorney, Lindsey Weidenbach, about cannabis. Let's get local, shall we?

Lindsey:  Let's do it.

Host:  Let's go to your friend and mine, the Palms Springs of Washington, that's right.

Lindsey:  It's so great.

Host:  It's Yakima. Yakima County, to be specific. Their ban on cannabis.

What's going on here?

Lindsey:  So, Yakima County banned it outright in 2014, right when licenses were getting rolled out. And they then took it to the voters, twice. They took it to the voters in their county once right after they banned it, somewhere in 2014/2015 and then again in 2016, I want to say? Or no, it was past November. It was November 2017, and they banned it both times.

Host:  Both times the people spoke and said, "We don't want it here."

Lindsey:  Yeah, both times. There were some issues with the way that the verbiage on that ballot was worded. It was a double negative. People were confused. Voter turn-out was 17% or something around there. So, there were issues on it, but yes, voters weighed in and they decided that the county commissioners were correct in banning it.

Host:  Can you wage a legal battle on a double negative? It's not like they said, "Do you or do you not want this scourge of reefer madness in Yakima County?" It's not like they said it like that?

Lindsey:  I wish they had. It would have been very clear. But, no, it was a bit of a double negative and it worked in their favor. And so this has opened a legal battle. The commissioners have been given 200,000 dollars of the county budget to initiate litigation, which they have. They have sued a retail store and they have sued a very large, the largest in their county, a producer/processor.

Host:  What if you want to enjoy marijuana, recreationally or medicinally? Illegal in Yakima County?

Lindsey:  No, you can certainly go outside of the county and purchase it.

Host:  And you can smoke it, or ingest, or whatever you want, inside the county? You just can't sell it in the county?

Lindsey:  Or grow it.

Host:  Or grow it. Okay.

Lindsey:  Right, right.

Host:  We all love unintended consequences, right? We do something thinking we're going to do one thing, but then another thing pops up. What are some unintended consequences from this ban?

Lindsey:  Well, you hope this doesn't happen, but an unintended consequence could be that it's just going to fuel the black market in the area.

Host:  So, let's leave the comfy confines of Yakima County and head north to Okanogan County. Apparently, they could be open for business again?

Lindsey:  So, another county that has rolled out two different versions of events. So, in June of 2017 we had the second moratorium come up on cannabis-related industries and this was the second moratorium that they had. But, it was the same reason that they rolled it out. It was smell, it was noise, it was traffic, it was neighbors calling in and saying, "Your conditional use permit process," they have one similar to Chelan County's, "didn't fix my issue because you didn't make it retroactive." The neighbors wanted the county to kick out the problem growers, and the county just simply wasn't going to do that.

Host:  So, if they're not going to make it retroactive, but property owners are saying, "It's affecting my quality of life, it's affecting my property values, et cetera, et cetera," who wins in this type of situation? It's a tough deal!

Lindsey:  It is a tough deal. Okanogan County did a really smart thing, though. They put together a task force of, I believe it was eight community members, non-industry folks, and industry folks. Those 16 people got together, they met, they said in the recent meeting ... they had a meeting in late February where they announced to the board of commissioners that they had some really great talks. They think that they've come up with some solutions and the planning department is writing those, now, into the zoning code and as of March 1st, we have a lift on that moratorium in Okanogan County.

Host:  Wait a minute. It's 2018. American political process. Can I actually use the word 'compromise?'

Lindsey:  I think they compromised.

Host:  Wow ...

Lindsey:  I know! I'm proud of them.

Host:  That's amazing. Cue the American flag.

Lindsey:  Well, and it was smart to do that. You know, Chelan County tried that, and it didn't ... I don't think we reached that compromise.

Host:  So, the compromise all parties thought were workable, things everyone could live with, essentially.

Lindsey:  Right, right.

Host:  Okay, so give me some details.

Lindsey:  So, the details that are coming out are that the committee has recommended to ban outdoor farms in neighborhood and commercial zones and indoor operations in those areas would require that conditional use permit. All cannabis farms, indoor or outdoor, in city expansion areas would also need a conditional use permit.

So, you're talking about coming to the county, giving them, essentially, your business plan, where you want to grow, what you want to grow, and getting their permission. And existing farms have until January of 2021 to come into compliance. And so, again, they're sort of taking what Chelan County did, giving growers more time to get in line with the regulations, or find a different place to grow.

Host:  But, again, this feels like a regulation that's suited ideally for Okanogan County. You're talking about an area ... if you've never been there, there's a lot of land in Okanogan County and not a lot of people. So, they can craft these so that growers can have these farms ... Smell is not ... well, it's going to carry, but it's going to carry where no one's going to smell it.

Lindsey:  Right. That's the hope.

Host:  Right.

Lindsey:  Yep.

Host:  And then if they do plan to locate next to urban areas, as urban as Okanogan County is, then steps need to be taken to mitigate the smell and other concerns that other folks are worried about.

Lindsey:  Right. And we're going to have some growing pains with this one, because when you do get out into those rural areas you find places that aren't suitable for growing, or maybe the land's not available, there's no space to lease out there. So, you're going to see a bit of that, but that's why the county commissioners and the committee gave the growers until 2021 to get all that figured out.

Host:  So, 2021 is where we can declare a happy ending if all parties are still happy by that point?

Lindsey:  Gosh! Fingers crossed.

Host:  Okay. Alright. We'll cross our fingers. We'll also step back. We'll take a quick break and when we come back on JDSA's Law Talk, we'll bring it all together. Talk cannabis, on JDSA's Law Talk.

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We're talking cannabis with featured attorney, Lindsey Weidenbach, and we have covered a whole lot of ground, so let's bring it all together. Let's talk about 2018. Summing it up in a word, what could that be?

Lindsey:  I'd say unpredictable. Again, and as expected, unless something fairly cataclysmic happens, though, our regional cannabis industry is going to continue to grow, but not without its challenges. But, this industry is adaptable. They've proved it time and again. And I believe that we'll just continue to march on.

Host:  Now, what you all do is, of course, you inform, and you educate the people who you serve. Apparently, JDSA has developed a handbook to help folks out, yes?

Lindsey:  We have, yeah. It's called Maintaining Compliant Business Practices in the Washington Cannabis Industry.

Host:  And very helpful, I'm sure it's enthralling reading, yes?

Lindsey:  Well, you know, we try to summarize the regulations as much as possible and make them reader-friendly.

Host:  Alright, very good.  Lindsey Weidenbach, thanks, so much.

Lindsey:  Thanks, so much.

Host:  And thank you, for joining us for this episode of JDSA's Law Talk. Now, remember, if you have a legal matter or require solid legal advice, connect with a member of the JDSA Law team at jdsalaw.com. You can also hear Law Talk episodes on other topics and submit your questions or suggestions for a future show.

I'm your host, Clint Strand. Thanks, again, for joining us on JDSA's Law Talk.

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