State could test federal power on pot

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SEATTLE -- In the waning days of a campaign to legalize marijuana in California two years ago, all nine ex-directors of the Drug Enforcement Administration simultaneously urged Obama officials to come out in strong opposition.

The pressure worked: Attorney General Eric Holder declared his office would

"vigorously enforce" the federal ban on marijuana "even if such activities are permitted under state law."

Whether that was a real threat or just posturing is unclear: California voters rejected Proposition 19.

The test case instead could be Washington, where voters on Nov. 6 will decide whether to directly confront the federal ban on marijuana and embrace a sprawling plan to legalize, regulate and tax sales at state-licensed pot stores.

Speculation on the potential federal blowback is rife.

Would the Obama administration pick a legal fight over states' rights to try to block Initiative 502? Would federal prosecutors charge marijuana growers and retailers, even if they are authorized by state law?

Or would -- as some opponents and supporters predict -- federal authorities denounce the law but largely leave Washington alone?

The Justice Department won't say. But legal and drug policy experts, asked recently to speculate, say any federal response is likely to be dictated as much by politics as by law.

Seattle City Attorney Pete Holmes, an I-502 supporter who talks frequently with federal authorities, thinks the Justice Department would back off after "a long, intense, fairly high-level conversation" with campaign and state officials.

"In the end, I think the feds will go with the will of the voters," said Holmes.

Since the legalization movement took hold in the 1970s, at least 11 states -- most recently, Rhode Island in 2012 -- and several large cities have stripped criminal penalties for possession of small amounts of marijuana, usually making it an infraction akin to a ticket.

Full legalization has been proposed and rejected by voters in Alaska, California and Nevada, and is on the ballot this November in Colorado and Oregon.

I-502 is the most comprehensive proposal yet. It legalizes 1 ounce of marijuana for people 21 and older, and creates a seed-to-store, closed, state-regulated monopoly estimated to raise more than $560 million in new taxes.

Details would emerge in a yearlong process at the Liquor Control Board, but a state fiscal analysis estimates I-502 would result in as many state pot stores -- 328 -- as there were state liquor stores, with 363,000 customers consuming 85 metric tons of pot, all of which would have to be grown in Washington.

That would be a "whole new ballgame" demanding federal action, said Kevin Sabet, a former senior drug policy adviser in the Obama administration. He predicts the federal funding that requires a drug-free workplace could be endangered, as could federal highway and law enforcement grants.

"These are the options that would be on the table," said Sabet, an opponent of I-502. "The idea that a state can collect funds, collect taxes off an illegal activity -- I can't imagine that would be allowed."

Federal criminal prosecution of users, growers or sellers also would be an option. A 2005 U.S. Supreme Court case, Gonzales v. Raich, upheld the power of federal agents to arrest and prosecute medical marijuana patients, in part because that pot could cross state lines.

It's unclear, however, whether the federal government would use that power. The DEA views all medical marijuana dispensaries as illegal but has selectively enforced federal law. Last month, the agency sent cease-and-desist letters to about 26 of the estimated 150 dispensaries in the Seattle area, citing their proximity to schools. Most dispensaries, however, stay in business.

Should I-502 pass, arrests may have to wait until December 2013. By then, the state Liquor Control Board would begin issuing grower, processor and retailer licenses -- and federal law would be violated on an industrial scale.

By then, I-502 may already have its day in federal court.

One of the most-discussed possibilities is for federal prosecutors to seek an injunction blocking Initiative 502, based on Article 6 of the Constitution, which makes federal law "the supreme law of the land," pre-empting state laws when they conflict.

In a "pre-emption" challenge, federal lawyers could contend I-502 actively requires someone to break federal law. Such a challenge, for example, could hinge on requirements for the state to issue marijuana grower and retailer licenses, and to collect marijuana taxes.

Based on that theory, the Arizona attorney general, the Oregon Supreme Court and a California appeals court recently ruled that federal law partially pre-empted medical-marijuana laws in those states.

But University of Chicago constitutional law professor Aziz Huq said the history of pre-emption cases were "messy" and full of "internal contradiction." At times, the U.S. Supreme Court has been reluctant to toss state laws, he said, even when they conflict with federal drug laws, such as Oregon's assisted-suicide law.

John McKay, the former U.S. Attorney who filed I-502, said he thinks the measure would survive a pre-emption challenge but hopes Congress, faced with a rebellion among states over marijuana law, would allow states to "opt out" of criminal prosecution in favor of strict regulation.