Still cloudy on legal marijuana

Local businesses not yet sure what form cannabis retail will take

By Cami Joner, Columbian retail & real estate reporter

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Local law enforcement waits for guidance.

photoGlass pipes are sold at Mary Jane's House of Glass, Thursday, November 8, 2012. (Steven Lane/The Columbian)

Washington voters on Tuesday opened a whole new market to legitimize marijuana growing, packaging and selling and also created a potentially lucrative new source of state tax revenue.

And despite its narrow defeat in Clark County, the statewide passage of Initiative 502 to legalize recreational pot use among adults effectively thumbed its nose at the federal government’s long-standing anti-marijuana policy. Possession in small amounts becomes legal on Dec. 6 in Washington, based on the initiative. Posession still may be risky for non-medical users because state law is trumped by federal law, which classifies pot as a Schedule 1 controlled substance under the Controlled Substances Act of 1970.

That’s why local businesses say they need more answers before they’ll feel comfortable stocking their store shelves with marijuana for sale, said Bobby Saberi, co-owner of Mary Jane’s House of Glass, a Vancouver-based chain of nine head shops.

His chain’s eight Washington stores won’t dispense marijuana without some assurance the activity would be tolerated on a federal level, Saberi said.

That question could be part of a year-long discussion state officials anticipate as they craft rules for implementing Initiative 502, said Mikhail Carpenter, a spokesman for the Washington state Liquor Control Board, which will regulate marijuana shops.

The board is charged with creating a system of state-licensed marijuana growers, processors and retail stores, where adults over 21 can buy up to an ounce under Initiative 502. The Washington State Patrol also will help establish a standard blood test limit for driving under the influence of pot.

“The initiative gives us up to one year to draft the rules and we expect it will take the full year,” Carpenter said.

Pot retailers will operate as licensed private businesses, unlike the state-run liquor stores that went away with the June 1 implementation of Initiative 1183, passed by voters in November 2011.

Licensed marijuana businesses “won’t be state stores,” Carpenter said, adding that licensed dispensaries will only be allowed to carry marijuana, marijuana-infused products and paraphernalia.

That mix of merchandise would likely appeal to the demographic composition of Mary Jane’s customers, who include a large percentage of prescription cardholders for medical marijuana, Saberi said. Marijuana as medicine has been legal for qualified patients in Washington state since 1999 and can either be grown by these patients or obtained through collective gardening efforts sanctioned by the state.

Saberi added that his store would be a natural fit to sell recreational marijuana if it weren’t for the legal risk. Mary Jane’s sells glass pipes and paraphernalia, T-shirts and hand-made candles. Founded with a single Vancouver store 12 years ago, the company now employs 38 people in nine stores. It operates five stores in Clark County and one store each in Longview, Tacoma, Federal Way and Portland.

“We don’t want to jeopardize our existing business,” Saberi said. “My question is, what’s the state going to do to help protect the citizens from the federal government?”

Feds yet to weigh in

But the U.S. Department of Justice hasn’t yet made a formal statement on I-502, according to Tonia Winchester, outreach director for New Approach Washington, which campaigned for the initiative. The group is encouraged because U.S. Attorney General Eric Holder, who was a vehement opponent of California’s legalization initiative in 2010, has remained silent on similar marijuana initiatives that passed this year in Colorado and Washington.

“We’re very optimistic that we can have a collaborative, and not combative dialogue this time around,” Winchester said.

But marijuana’s status as a controlled substance hasn’t changed, the DOJ said in a written statement issued Wednesday.

“The Department of Justice’s enforcement of the Controlled Substances Act remains unchanged,” said the statement, which added the department is in the process of reviewing similar initiatives in Washington and other states.

Questions also abound for growers and processors, as well as for businesses that have long had zero tolerance policies banning employees from using marijuana, a drug affectionately known of as “weed.”

“The argument is going to be, how can you tell if they’re high?” said Terry Johnson, owner of ARCpoint Labs, a Vancouver company that provides drug and alcohol testing and background screening.

Amy Robinson, a business and employment attorney for the Vancouver office of Jordan Ramis, said employers likely will have the last say in drug policy violations because of a legal precedence-setting case in 2011. In the case, Roe v. TeleTech Customer Care Management, the Washington Supreme Court ruled that employers can fire any employee who violates the company’s rules against pot smoking, even if the worker has a doctor’s prescription to use pot for medicinal purposes.

Johnson said the effects of smoking marijuana fade quickly but can often be detected in the body for weeks or longer, depending on how often or how much marijuana the user has been smoking or ingesting.

Johnson questioned how the state would enforce laws against driving under the influence of marijuana.

“It can show up for a long time,” he said, although the initiative also calls for establishing a standard blood test limit for driving under the influence.

“That’s going to be tough with these laws,” Johnson said.

In a written statement, the liquor control board says it plans to build marijuana regulations “from the ground up,” gathering input from experts, including the medical-marijuana industry, law enforcement and drug-treatment providers. It will likely hold public meetings around the state.

In the meantime, the federal government could respond to I-502 in several ways, including launching a lawsuit charging that Washington is in violation of federal law, Winchester said.

“We want the federal government to respect the wishes of Washington voters,” she said, adding that the measure was written to benefit entrepreneurs across the state, while banning marijuana imports from other states or countries.

“That would be in direct violation,” Winchester said.

‘Productive dialogue’

She added that I-502 was drafted with input and backing from the likes of ex-U.S. Attorney John McKay, Seattle City Attorney Pete Holmes, ex-Seattle Police Chief Norman Stamper and Charles Mandigo, former special agent in charge of the Seattle FBI office.

“In drafting it, we took into consideration wanting a productive dialogue with the federal government,” Winchester said.

Just how that will translate to the retail side of marijuana sales is unclear, said Saberi, of Mary Jane’s.

The law includes a 25 percent sales tax on marijuana. Forty percent of the new revenue will go to state and local budgets. The rest of the taxes are to be used for substance abuse prevention, research, education, and health care, according to New Approach Washington.

“It’s going to be heavily taxed, from what it appears,” Saberi said.

The law also prohibits entrepreneurs from launching all-encompassing businesses that grow, process and sell pot.

“Right now, we have not made plans to turn our stores into dispensaries,” he said. Saberi added that he hopes state officials reach out to businesses such as Mary Jane’s when it comes to hammering out the details of Initiative 502.

“We have a good business model,” he said. “I hope they’ll reach out for help so it will be an industry we can be proud of.”