Strictly Business: Marijuana debate far from over

By Gordon Oliver, Columbian business editor

Published:

 
photoGordon Oliver, Columbian's business editor

It seems like every day brings a new surprise in the awkward transition of marijuana from outlaw status to social acceptance. In the blending between those ready to seize a rare entrepreneurial moment and those whose job is to regulate and tax a product that’s still illegal in 48 states, it’s been tough to select the most discordant set of circumstances.

Here’s one: A newly minted marijuana supplier in Vancouver is given a 15-day, no-questions-asked window to bring inventory into his 2,000-square-foot growing facility that turn the once-illegal plant starts into a legal consumer product. A follow-up story about that business is elsewhere in today’s Columbian.

And another: A retail sales lottery applicant learned, after winning a Liquor Control Board lottery to open a store in Battle Ground, that the prospective landlord didn’t want a marijuana retailer after all. Now the applicant, Orchards Feed store owner Loren Carlson, is looking for a new place to sell Mary Jane that still meets state requirements.

Then there’s the state Liquor Control Board’s disqualification of a North Bonneville retail applicant because his proposed store site was less than 1,000 feet from a park — that is, an RV park. On top of all that, another applicant was approved at the same address, near the same “park.”

Such conflicts between marijuana legalization and government regulation, law enforcement, finance, and community values keep piling up. And while unregulated, illegal sales may be a purer form of unfettered capitalism than legalized sales, many entrepreneurs are lining up for what they perceive as a once-in-a-lifetime opportunity to get rich quick in a new market with proven consumer demand.

The last time an illegal substance was legalized on this scale was at the end of Prohibition in 1933. Legalization was a half-step process of selling booze in state-run liquor stores, and it took until 2013 for Washington to treat hard liquor like any other consumer product (albeit with much higher taxes than most). That change, like marijuana legalization, came from voters by initiative. But the transition is muddled this time by the conflict between state and federal law.

The Obama administration has been deferential to legalization efforts in Washington and Colorado, but many institutions aren’t sure they want to be on the wrong side of the federal government. That’s why, among other legalization rough spots, most banks don’t want to deal with the emerging marijuana industry. It’s why the Columbia River Gorge Commission had to debate whether to allow the growing and selling of marijuana within the national scenic area, in light of federal laws against marijuana. (It decided to defer to county decisions). And it’s why the owner of a medical marijuana dispensary is challenging Washington’s sales tax on his business in federal court, saying he can’t pay the tax without incriminating himself in a criminal case for pot distribution.

At some point, the legal fights will fade and the larger questions about legalization’s effect on society will come into our homes and families. That discussion could be the toughest fight of all.