Plan would punish cities with unofficial pot bans by taking their liquor money

A state lawmaker wants cities in Washington to make a choice: allow marijuana business or ban them.

But don’t hang out in the gray area in-between, he says.

State Rep. David Sawyer, D-Parkland, wants to penalize local governments that haven’t enacted specific bans on marijuana businesses, but still block state-licensed marijuana shops from opening because the drug remains illegal under federal law.

Sawyer’s proposal, House Bill 1099, would take away most of a city’s liquor revenues if it doesn’t adopt a policy either banning pot businesses or allowing them to open.

The measure zeroes in on Lakewood, Pierce County’s second-largest city, he said.

While Lakewood City Council members never approved a formal ban on marijuana businesses, city licensing rules nonetheless require that all businesses comply with federal law, effectively preventing pot shops from locating there.

The language has prevented three business owners from receiving licenses to open pot businesses in Lakewood, even after they secured the proper licenses from the state, city officials said.

“It was frustrating because I did an entire build-out of my store under the impression that this was going to be OK,” said one of those business owners, Jordan Michelson. “I kind of got the rug swept out from underneath me.”

Washington voters legalized recreational marijuana more than four years ago by passing Initiative 502. Lakewood voters supported the initiative, but Sawyer said that hasn’t caused city officials there to embrace legal weed.

“They’re ignoring the will of the voters,” said Sawyer, chairmain of the House committee that deals with marijuana policy.

“I feel local governments don’t get to decide which state laws they want to ignore,” he said.

While I-502 legalized recreational marijuana use for adults 21 and over, it was silent on whether cities or counties could enact local bans on pot businesses.

An attorney general’s opinion from 2014 clarified that nothing in the law requires local governments to allow marijuana businesses within their jurisdictions. Several trial court judges later agreed with the attorney general’s stance.

In the Mid-Columbia, marijuana retail sales are banned in Richland, Kennewick, Pasco and West Richland, but not in Prosser and Benton City. There are no authorized marijuana retailers in Franklin County.

Mid-Columbia residents voted heavily against I-502 in 2012, with 56.5 percent of Benton County voters and 61.l3 percent of Franklin County voters saying no to legalization.

Under Sawyer’s bill, cities like Lakewood would lose 70 percent of liquor revenues they receive from the state unless they either enact an official marijuana ban or allow pot businesses to operate by January 2018.

Without a change in its policy, Lakewood would lose about $540,000 per year if the measure becomes law, said City Manager John Caulfield.

That money comes from a state account that pools all revenue from permits, licenses, fees and penalties involving alcohol, which the state shares partly with cities and counties.

Caulfield said losing the money would cause the city to have to lay off four or five police officers, since liquor revenues are earmarked for public safety programs.

“We have an overarching policy with the state Legislature: Please don’t do anything that harms us,” Caulfield said. “Certainly, taking state revenues that are for public safety purposes harms us.”

Caulfield said “it’s way too early to say” whether Lakewood officials would consider changing the city’s marijuana policies should Sawyer’s bill move forward.

Lakewood officials are opposing the bill, as is the Association of Washington Cities.

“It does penalize our community for seeking compliance with federal law,” Caulfield said.

Ezra Eickmeyer, a lobbyist representing a group called Cannabis Retailers for Smart Regulation, testified in support of the legislation. He said getting rid of local pot bans is essential if the state wants to end the black market, which was one of the goals of I-502.

“If we can’t provide legal retail access, the illicit market is going to continue to be the place where people go to buy their marijuana,” Eickmeyer said. “And as we all know, most drug dealers on the illicit market don’t ID for age.”

Candice Bock, a lobbyist for the Association of Washington Cities, said she’s not aware of another city besides Lakewood that would be directly affected by Sawyer’s bill.

But many small cities may have similar laws on the books that haven’t been tested, she said, since the state has set a cap on how many marijuana retail outlets can open statewide.

Sawyer has previously tried to prevent local governments from enacting any bans on marijuana businesses without voter approval. His effort passed the Democratic-controlled state House in 2015, but stalled in the GOP-led state Senate.

That same year, state lawmakers passed a law saying local governments that ban pot businesses can’t receive a portion of marijuana revenues distributed by the state.

Sawyer is concerned that some cities with de facto bans could still try to claim marijuana revenues. In addition to forcing cities like Lakewood to forfeit liquor revenues, his bill would clarify that cities and counties with unofficial bans can’t share in the state’s marijuana revenues, either.

The proposal received a hearing Tuesday in the House Committee on Commerce and Gaming. Committee members were scheduled to vote today on whether to advance the measure.

While the bill has some bipartisan support, state Rep. J.T. Wilcox, R-Yelm, said he’s not sure the Legislature should be adding even more pressure on cities and counties to allow marijuana businesses.

“I don’t see why we should be in the business of compelling them to do it, regardless of what their values in the city are,” said Wilcox, who is the House majority floor leader.

“I believe at this point, if they don’t allow marijuana sales, they don’t get to share in marijuana revenues — that sounds like enough of an incentive to me.”

This story was originally published January 18, 2017 at 8:03 PM with the headline "Plan would punish cities with unofficial pot bans by taking their liquor money."