Legal Weed in Washington State Has Been Completely Screwed Up

“The most important room requires a finger."

Alex Cooley, vice-president of the medical-cannabis grower Solstice, is showing me around his company's 9,000 square feet of grow lights, hydration tanks, and ventilators. He puts a digit on a fingerprint-scanner, there is a bleep of approval, a door opens, and it’s immediately apparent what all the security is for. Pre-rolled joints, capsules of extract, throw pillow–sized plastic bags of buds — the room contains hundreds of thousands of dollars' worth of weed that's ready for delivery to cannabis dispensaries.

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It's the final stop on our tour of what Cooley calls “the first fully permitted marijuana grow in Washington state." The warren of basement rooms sprawls beneath an industrial building south of downtown Seattle, not far from the world headquarters of a far more famous distributor of legal drugs, Starbucks. I've seen marijuana plants at every stage of growth, from leafy baby cuttings in Solo cups to chest-high bushes heavy with glistening, aromatic buds. Now that the use of recreational marijuana in Washington is legal, Cooley seems poised to do incredible business.

Except he can’t sell recreational users a single bud.

A PILE-UP ON I-502
It has been more than a year since Washington voters approved Initiative 502 legalizing the use and production of recreational marijuana. But a legal and political haze is making it all but impossible for entrepreneurs, activists, regulators, and smokers to know when legal pot will actually be a reality in Washington — which puts the high-stakes marijuana legalization experiment at risk of failure not just in the state, but in the rest of country.

Some of the bizarre complications currently plaguing Washington are inherent in any conflict between state and federal government. Marijuana remains a Schedule I prohibited substance under federal law, although US Attorney General Eric Holder has said the Justice Department will allow Washington and Colorado — Amendment 64 there also legalized recreational pot as of January 1 — to proceed unhindered. Some arise due to cumbersome provisions in the Washington law itself. And others from the way the Washington State Liquor Control Board (WSLCB) has interpreted its authority to create a new recreational marijuana system.

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The vast differences between Washington's law and Colorado's law were immediately apparent to anyone who read or watched the news on New Year's Day. People all over the world saw ecstatic stoners buying marijuana in Denver while enduring terrible puns about the Mile-High State. Legal weed had come to Colorado! And not just the de facto, wink-and-nod legalization found in cities like Amsterdam — it was the world's first functioning system of taxed, regulated production and distribution of recreational cannabis.

So where were all the happy stoners in Washington? Where were the news reports about citizens of the Evergreen State — lots more opportunities for newscasters to make puns — lined up around the block to buy legal weed from Seattle to Spokane?

Both Washington and Colorado had been early adopters of marijuana permissiveness. After California passed the nation's first medical marijuana (MMJ) law in 1996, Washington was in the first wave of states to follow suit, passing Initiative 692 just two years later. Colorado did the same in 2000.

Major metro areas in both Colorado and Washington are particularly weed-friendly. In 2003, voters in Seattle passed an initiative officially making "the investigation, arrest, and prosecution of marijuana offenses, when the marijuana was intended for adult personal use, the city’s lowest law enforcement priority." Tacoma, the state's second-largest city, passed a similar measure in 2011.

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But this wasn't just an issue for citified liberals. Weed is one issue that reliably bridges the political divide between urbanites and rural residents in each state. In 2012, more Coloradans in rural areas of the state voted for Amendment 64 than for Barack Obama, and the amendment won in eight counties that went for Mitt Romney. The story was much the same in Washington, where I-502 won several counties in the heavily conservative eastern half of the state. There's unquestionably a greater amount of opposition to legal marijuana in rural areas than in cities, but neither measure could have passed without a strong minority of rural voters voting for it.

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And yet while Colorado was up and running on January 1, Washington has yet to sell its first recreational bud. That's mainly due to one crucial provision in that state's law: Where Colorado simply opened up the state's existing medical cannabis system to recreational customers, I-502 mandated that Washington start from scratch. Recreational marijuana has technically been legal to possess and use since in the state December 2012, but there's no legal way to acquire it — except, perhaps, to find it laying on the ground — until the state issues producer and retailer licenses for I-502's new "seed-to-sale" system.

Marijuana fans celebrated in the US state of Washington, as the drug became decriminalized at midnight on December 6.

At the moment, that system is nonexistent. The WSLCB, the body charged with regulating the recreational marijuana market, only started taking applications for growers, processors, and retailers last November. After allowing a controversial 30-day extension for applicants to get their paperwork in order, the WSLCB is tentatively expected to begin issuing licenses in the next couple of weeks. Maybe.

Even when Washington's aspiring weed moguls finally do get their licenses, they’ll have only begun the permit process. Each license holder must also secure business permits from local authorities who are often openly hostile to legal pot. Most growing operations will need construction permits to build their irrigation, electrical, and waste-disposal systems. Premises must be found. Leases must be signed. Finances must be secured to pay for all this, and not from traditional lenders — banks remain skittish about funding an industry that remains illegal under federal law, even after the Justice and Treasury departments announced in February that financial institutions may work with licensed pot businesses. Lastly, marijuana has to actually grow. It takes at least a couple of months to produce a crop.

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“Seed-to-sale” is why Alex Cooley can't sell any of his current crop to recreational users. (His company is hoping to open a new recreational growing facility several hours east of Seattle.) And it's why nobody really knows when you'll easily be able to buy an over-the-counter joint in Washington.

“They'll have stores open in late winter or early spring,” says UCLA professor and author Mark Kleiman, who advised the WSLCB when the organization crafted its early regulations. “A little slower than they'd hoped.”

Or maybe a little longer than that.

“There will be some shops that open, with product on their shelves, in the spring,” says Alison Holcomb, the Seattle ACLU lawyer who took the lead in drafting the legal language of I-502. “Entrepreneurs are entrepreneurs. It is going to happen.”

Or a little longer than that.

“June or July is the best-case scenario,” Cooley says. “I honestly think July or August. I would not be surprised if we're into September before there's a store.”

Or way longer than that.

“We may not see our first retail pot store for a couple years,” says Tom Gordon, a veteran Seattle real-estate broker who specializes in finding property for marijuana businesses. “We're going to see some of these producers and processors go into a building and find out, oh, it takes six months to get a change-of-use permit. And they can't drive one nail until they get a change-of-use permit. And oh, they've got to go up on the roof. They've got to do seismic. They've got to do an electrical plan. They've got to do structural. They've got to do an EIS (Environmental Impact Statement). Meanwhile, existing (dispensaries) are going to dispute the EIS and talk about carbon footprint. And suddenly they'll find they're running out of money."

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Okay, maybe not quite that long.

“It's a minimum of 10 months," Gordon concludes, "and that's if everything goes perfectly.”

“PEOPLE WILL DIE”
There is an obvious question: Why did I-502 mandate the creation of a new seed-to-sale system instead of taking Colorado's approach and opening up the existing medical system?

Holcomb, the ACLU lawyer, says you can't open up a medical marijuana system when there isn't one to open up.

“It wasn't really a choice for us to flip a switch and let medical take over for recreational, because we had no medical marijuana system,” she says. “We have some medical marijuana dispensaries operating in Seattle, but that's due to political tolerance, not to actual legality. In the rest of the state, you have very different political environments, and you don't have medical marijuana dispensaries.”

Actually, that's not quite true: Walk-in dispensaries are openly operating in larger cities like Spokane, Olympia, Tacoma, and Bellingham. But delivery-only services stand in for storefronts in areas with the “very different political environments” Holcomb describes. Searching on weedmaps.com for dispensaries in Eastern Washington cities like Yakima, Walla Walla, and Kennewick turns up only delivery services. The difference illustrates Holcomb's point about the legal gray area that dispensaries currently occupy.

“Our medical marijuana law is a bit of a mess,” she says. “We didn't have any way to flip that switch.”

Washington's MMJ industry operates under a creative interpretation — some might call it a “loophole” — of the 1998 law that allows for “collective gardens.” Right now, virtually all growers and shops are officially organized as collective gardens, typically requiring patients to sign a membership form to officially “join” the garden, and referring to the prices for medical cannabis products as “donations.” Kleiman calls all of this “legal bullshit.” The MMJ community says they're serving patients as best they can under a regulatory mess that they did not create.

Both sides lay the blame on then-governor Christine Gregoire's veto of provisions in a 2011 bill, SB 5073, that would have licensed and regulated dispensaries and provided explicit protections for patients. (She said the law would have made state employees vulnerable to federal charges for violating US drug laws.) That proposal had the support of a majority of Washington legislators, regulators, and medical marijuana advocates. With the stroke of her veto pen, Gregoire sent them all back to the drawing board.

On February 18, the state House of Representatives voted 67-29 to pass HB 2149, eliminating medical marijuana as Washington knows it. Based on recommendations from a group of state agencies, the bill would require all patients to register with the state, creating a central record of qualified patients. All current medical authorizations would be cancelled, requiring patients to return to their doctors and get new recommendations. HB 2149 would also limit the number of plants a patient may grow to six (vs. 15 under the current law), and the number of ounces of cannabis a patient may possess at one time to three (vs. 24 oz. currently). Home cultivation would be eliminated completely by 2020, and medical dispensaries would close by May 1, 2015.

MMJ activists say HB 2149 is proof that I-502 supporters were lying when they said legalizing the recreational market would not eliminate the medical market. They now fear patients will be forced into a recreational market that has little interest or ability to serve their medical needs.

That's why MMJ sellers Sky Nielsen and Nate Taylor of the Fweedom Collective originally opposed I-502. Although they're currently pursuing a recreational retail license, on a rainy morning in Fweedom's stylish dispensary in North Seattle, they calmly but intensely lay out a case for maintaining a separate system for medical users.

“You can't have one system that you say is helping everyone,” Nielsen says. “What makes this place a medical collective is the knowledge that we have. If you take this cannabis and put it in a bag and someone's selling it off their couch, it's the same cannabis. But what makes it medical is that we know what it's going to do, how it's going to affect you."

Cooley's prognosis for medical marijuana users is grim. “Patients folded into the I-502 marketplace within the first two years will be priced out of their medication,” he says. “There will be a supply shortage for at least the first year. You're looking at persons whose medications could double or triple in price. People will die.”

Holcomb responds that the push to bring the medical system under tighter control was inevitable, given the slippery behavior of some MMJ providers; doctors gave bogus medical authorizations to dispensaries providing little or no information about the origins or content of their products.

“The biggest factor driving these decisions is the perception of policy-makers of how medical marijuana entrepreneurs have conducted themselves,” she says. “If medical marijuana had been completely unproblematic in Washington state up to this point, there wouldn't be calls for reigning in or elimination of particular features of medical marijuana.”

Cooley and Nielsen acknowledge there are rogue operators at the industry's margins, but say they're minor compared to the harmful effects of shutting down MMJ providers who have conducted themselves responsibly.

“We've tested from the beginning,” Nielsen says, “and we've required our vendors to test.” In Fweedom's inspection room, he methodically examines a vat of weed bud by bud, looking for mold and other impurities under a magnifying glass. As with Solstice's product, all of the cannabis on display at Fweedom is classified by strain and labeled with percentages of THC and CBD. Nielsen says the testing provisions of 502 are “what we wanted to happen all along.”

NIMBY
The issue of whether or not I-502 will allow for medical patients to get the pot they need may very well be beside the point, because it's not at all clear it will even allow for recreational users to get the pot they want. After a series of drafts and revisions, the WSLCB settled in October on a total statewide cap of 2 million square feet of marijuana production, to be divided among all of the licensed producers. Originally, the most any one producer would have been able to grow was capped at 90,000 sq. ft.

After receiving more than 2,800 applications for licenses, the WSLCB announced on February 19 that they were cutting that maximum to 21,000 sq. ft. And so after months of preparation and investment, aspiring growers were told they had to radically adjust their plans.

“Who can do business under a statewide cap,” asks grower and environmental activist Jeremy Moberg of the Okanogan Cannabis Coalition, “where, at any moment, you can get a letter from the Liquor Control Board that says 'Yeah, we gave you 90,000 sq. ft., but we didn't mean it. We want you to grow 20,000 sq. ft.?'”

Why didn't the WSLCB just raise the cap beyond 2 million sq. ft. when so many applications poured in? And for that matter, why limit production at all? To keep prices high enough to prevent “diversion,” or in other words, to make sure legal Washington pot isn't so cheap that it starts being smuggled to other states to be illegally sold at higher prices.

Moberg says using diversion as an excuse for the caps is ridiculous. “If producing too much means that you can't control where the product goes, then you can't control where the product goes, no matter what. Any pot produced can divert. What you're saying is you don't believe in your traceability system.”

To control prices, he says, the WSLCB should allow growers to produce more than their caps specify — say, 1.5x the limit — and store the excess. Then, when supplies dip, the board could release that stored supply to keep prices stable. “Overproduction is what you want. Imagine a grain market with no grain silos. The price would fluctuate wildly. That's what they're building here. The WSLCB could have given themselves market manipulation tools, like the Fed does.”

Even accepting the argument that a cap is necessary to balance supply and demand, 2 million sq. ft. is almost certainly not the amount of space needed to hit that sweet spot. The WSLCB based the cap on a Washington Office of Financial Management estimate that the state's total pot consumption, through all channels, would be 85 metric tons in 2013. But a study released by the Rand Corporation in December estimated the most likely total would be 175 metric tons, more than double Washington's estimate.

There will be only 334 total licenses available for retail shops, which also seems low considering there are more than 150 dispensaries currently operating in Seattle alone; the WSLCB received 867 applications for those licenses. What happens if there are more qualified applicants than there are licenses? A lottery will be held to determine the recipients, with no consideration given to prior experience as a medical dispensary.

Regardless, there won't be 334 shops in the state. Various cities and counties are implementing their own local bans on recreational marijuana businesses, backed by a formal if non-binding opinion that state Attorney General Robert W. Ferguson issued in January. These localities include Pierce County, the second-most-populous county in the state, and Yakima, a city of 93,000. According to the Center for the Study of Cannabis and Social Policy, local bans and moratoriums now cover 1.6 million residents, more than one-fifth the state's population.

“Usually these small towns are pulling out the fed card,” says Gordon, the real-estate broker. “They're saying 'As long as something is federally illegal, we're not going to allow it. Why don't you go get a DEA pass? Then we'll let you do it.'”

Leading the charge against pot shops is the wildly inappropriately named chairperson of the Pierce County Council, Dan Roach. Despite the fact that his own district approved legalization, Roach has called pro-502 voters "the pothead constituency" and has vowed to take the Washington state government to federal court to establish Pierce County's right to ban pot businesses.

“I am going against what the will of voters was for Initiative 502,” Roach told a Seattle radio station, but “the caveat is the people who elected me expect me to be able to understand the issue on a local level and how it’s implemented and make a good choice on that basis.”

Meanwhile, counter-measures introduced in the state legislature would ban the bans, preventing cities and counties from outlawing marijuana businesses. Still, if licensees are unable to open businesses in cities and counties that are calling for bans, their licenses will not be reallocated to licensees in more pot-friendly areas of the state. They will simply go unused.

INSIDE OR OUT
Prices aren't the only thing on Moberg's mind. A wildlife biologist by training, he's also concerned that basing the production cap on square footage will hurt the genetic diversity of marijuana by incentivizing the production of a few fast-growing strains rather than a diversity of slower-flowering types. “We were telling (the WSLCB) until we were blue in the face, just put a poundage cap on production, don't limit production by square feet. It creates an incentive to grow as much as quickly as you can."

If Cooley is the quintessential urban cannabis grower, skating down city streets on his longboard with his dog by his side, Moberg is his rural opposite. His job as a biologist is to monitor salmon habitats, and he describes himself as a former “guerrilla grower” who spent 20 years dodging cops. “Lots of near arrests, lots of rip-offs, helicopters looking down on you, all of that.”

But when I-502 passed, he turned into a savvy coalition builder in Okanogan County. The largest county in the state but home to only 40,000 people, Okanogan's mixed strains of Western libertarianism and back-to-the-land hippiedom made it one of the rural counties in which I-502 won majority support. Moberg was “super exuberant” about I-502 — until he saw that the WSLCB's initial rules permitted only indoor growing.

“It started off as an environmental cause for me,” he says, citing the intensive energy needs of indoor growing. “I just didn't want to see incurring that carbon footprint for a recreational drug. I felt like there was this paradox there between Seattleites being fairly liberal environmentalists, but on the other hand being protective of what could be a huge industry for them. So you really didn't hear them squawking about the environmental impacts of indoor growing.”

With some fellow environmental activists, Moberg started the Okanogan Cannabis Association to lobby for sun-grown weed. Holcomb cites his presentation at a March 2013 hearing as the most important factor in convincing the WSLCB to reverse their indoor-only stance. And it helped Moberg build a statewide network of lawyers, elected officials, and other supporters. By the time the board started accepting applications for producer licenses, Moberg had decided he was ready to get back in the business, applying to start a 60,000 sq. ft. cannabis farm (his word) in the town of Omak.

While he has encountered some resistance to his growing plans, including an Omak ordinance prohibiting the issuing of licenses to recreational marijuana businesses, Moberg seems confident he and his supporters will win. “I've got quite a few attorneys that would love to take a crack at (the ordinance)," he says. "And I don't even think it would make it to court. I think at some point the insurance pool of the city would advise them not to fight it. But it does have the effect of scaring quite a few people away.”

BREAKING THE LAW
Imagine having to explain all the intricacies of I-502 it to the public. The stoned public. That's the problem that faced Jonah Spangenthal-Lee. As the official social-media spokesman for the Seattle Police Department, he made a worldwide name for himself with his irreverent tweets at @SeattlePD and blog posts at the SPD Blotter.

When I-502 passed, “I knew we were going to be inundated with calls,” Spangenthal-Lee says. “This is a huge change just for the average person who lives here, visits here, whatever. What does it all mean? I thought 'Let's try to answer all those questions at once.'”

The result, a post entitled "Mariwhatnow? A Guide to Legal Marijuana Use in Seattle" is exactly how law-enforcement agencies should talk to citizens about pot. It gave clear answers to obvious questions (smoking in public “could result in a civil infraction — like a ticket — but not arrest”), funny answers to ridiculous questions (Q: “SPD seized a bunch of my marijuana before I-502 passed. Can I have it back?" A: "No.”), and concluded with a video clip of the pipeweed scene from The Lord of the Rings. It was friendly, direct, and even kind of … cool.

Seattle's first post-502 Hempfest in August 2013 was another big opportunity for Spangenthal-Lee and the SPD to communicate with smokers in their own language. But he knew that if the police passed out pamphlets, people would have just thrown them away. So instead, the SPD printed up stickers with lighthearted but real legal advice — “Don't give, sell, or shotgun weed to people under 21 … Do listen to Dark Side of the Moon at a reasonable volume” — and affixed them to 1,000 bags of Doritos.

The Hempfest crowd snapped up all 1,000 bags in 10 minutes, and global media devoured the story. Today, one of the empty bags will cost you $10 on eBay.

Hempfest itself has posed a problem to the SPD since the “lowest law-enforcement priority” era began. When 40,000 weed enthusiasts gather in the open air to celebrate their shared passion, there's going to be some pot smoked. Generally, police and potheads have reached a mutual understanding: Don't be obnoxious, and police won't hassle you.

I-502 specifically prohibits the use of marijuana “in public view," but the line between public and private space isn't always clear. For instance, can private business owners allow consumption of marijuana on their premises? That question is being tested in an unlikely place: Frankie's Sports Pub. From his unassuming two-story sports bar amid the auto-parts warehouses and fast-food joints on the outskirts of Olympia, owner Frank Schnarr has become a complete pain in the ass for the WSLCB commissioners who meet a couple miles away.

Anyone who pays the $10 membership fee to join the "Friends of Frankie's" can enter a private club on the second floor, where they're free to enjoy their beers, shots, and sandwiches with a side of marijuana — or even a regular cigarette.

That's actually why Schnarr originally founded the Friends of Frankie's: to let his customers continue smoking after Washington's indoor smoking ban went into effect in 2006. After years of litigation, Schnarr won that fight. When I-502 passed, he decided to apply the “private club” model to marijuana smoking too.

On a quiet Thursday night in December, the scene at Frankie's is much like that of any other sports bar. A Chargers-Broncos game plays on the 160-inch projection TV. Billiard balls clack together on a couple of pool tables. Neon beer signs glow, NASCAR pennants sway, waitresses tote platters of hot wings and baskets of fries.

And patrons hold lighters over glass pipes.

“I like not being confined at home,” says a burly guy with a beard I'll call Justin, who says he owns a construction business. “I can come down, have dinner and a soda, and catch the game instead of sitting at home smoking and wondering what my neighbor is going to think. It's a safe environment. It's mellow. Relaxed. People aren't screaming and fighting. There's nothing bad going on here.”

That's a theme with all the people with whom I speak at Frankie's. “Every single friend of mine comes here,” says a nose-ringed woman in her early 20s. “Not everybody can smoke at home. If you take away the only safe place people can smoke, they're just going to find somewhere else. And even on busy nights, it's always calm.”

After the initial weirdness of watching — and smelling — people smoking pot in a restaurant wears off, the biggest difference I notice between this sports bar and other sports bars is the complete lack of aggression. This is the calmest, most mellow sports bar I have ever been in. That alone seems worth the $10 membership fee.

Just six days after my visit to Frankie's, the WSLCB adopted a rule making it illegal for any establishment with a liquor license to allow marijuana consumption of any kind on its premises. Schnarr has vowed to ignore the rule and fight it in court.

AT THE INTERSECTION
Nobody in Seattle knows where they'll be able to buy marijuana legally, but everybody knows where to buy it illegally.

A major bus transfer point in the heart of downtown, just a few blocks from Pike Place Market and the Space Needle, the intersection of 3rd Avenue and Pine Street is notorious for barely concealed drug dealing and frequently unconcealed drug use. Morning commuters in suits dodge crack smokers on the sidewalk. Furtive handshakes conceal exchanges of tiny parcels and folded-up bills. Well-scrubbed families of tourists scurry past howling street addicts. Empty bags and vials litter the restrooms at the nearby McDonald's.

This all goes on despite pledges from one mayoral administration after another to clean it up. The intersection has earned comparisons to "Hamsterdam," the area in The Wire where Baltimore police permitted open drug-dealing in order to keep it contained to one neighborhood.

"The police and a downtown development group expect 3rd and Pine to look a lot different by next year," according to one Seattle Times story. Another Times piece describes "a gantlet of open-air drug deals, the homeless, the mentally ill and crowds of loitering street kids," and asserts that "the corridor must be improved if the downtown is to grow."

The first story was published in 2001; the second in 2011. Either one could have been written today.

There's a lot more being consumed at 3rd and Pine than just marijuana, of course, and I-502 won't tame the chaos. But it could move the needle, even if it's a very small amount.

"We have to make 502 successful, no matter how fucked-up it is," Cooley says. "Because if we can't, the federal government is going to say, 'We gave it a chance. It doesn't work.'”

@jasontoon