Wednesday, March 26, 2014

State Legislature Fails to Pass MMJ Bill by Deadline

Originally posted at on March 17, 2014.

Despite intense lobbying and countless public hearings, the state legislature failed to pass a bill addressing medical marijuana by Thursday’s midnight deadline.   This means that SB 5887 and HB 2149 (the “Cody Bill”) have been shelved, at least for now.

The next regular legislative session starts in January 2015.  This session will last 105 days, as opposed to this year’s 60-day session.  In the meantime, the Governor may call an extraordinary session. Extraordinary sessions are to address specific issues, usually the budget. There is no limit on the number of extraordinary sessions in a year, but they only last 30 days.  In other words, today’s development is by no means the end of the story.  We may see the legislature address medical marijuana in the coming year during an extraordinary session (assuming one is called) or in the next regular session starting in January.
Despite how you felt about SB 5887 and HB 2149, the legislature’s failure to act was problematic.  The consequences of this inaction are addressed below. 

Do not interpret the legislature’s failure to pass a bill as an endorsement of our current medical marijuana laws.  The failure to pass a bill was likely the result of disagreement on the severity of changes to our MMJ laws, as opposed to whether change is needed.  During this session, both the house and the senate individually passed bills making significant changes to the laws, including the elimination of collective gardens (the house proposed to eliminate gardens in May 2015 and the senate in Sept. 2015).  Thus, as a whole, there is legislative agreement that our current MMJ system should be reworked; specifics on timing, taxes, and a patient registry remain uncertain.

Cities and counties will likely fill the void left by the state legislature.   Countless local authorities have already passed moratoriums on medical collective gardens, including King County. Even Seattle, a city with arguably the most pro-pot policies, enacted legislation that could eliminate collective gardens by January 2015.  

Expect the Department of Revenue and local zoning code enforcement officers to continue to play a role on curtailing MMJ growth.  In the last year, as MMJ has grown, the state Department of Revenue and local zoning code enforcement officers have targeted medical marijuana establishments and organizations.  Expect this to continue.  Tax assessments and code enforcement actions are effective at shutting down businesses, incur minimal expense, and result in less public outcry than criminal prosecution. 

Even though the state failed to act, the Feds may—which is worse.  Washington has been fortunate to avoid the erratic and aggressive criminal prosecution of MMJ, like you see in California and Montana.  However, if the state legislature continues to ignore Washington’s largely unregulated MMJ industry, it’s uncertain how the DEA will respond. 

On the plus side, the legislature did manage to adopt HB 2304.  This is a welcome development.  The bill expressly allows for concentrates, and distinguishes those from infused products by a 60% THC threshold.  Prior to this change, the Liquor Control Board ("LCB") had created a work-around, allowing for concentrates as “infused products for inhalation.”  The LCB will likely replace this term with “concentrates,” which would result in few changes, other than allowing processors to avoid adding small amounts of inert oil into concentrate for the purpose of qualifying the product as “infused.” 

Under the bill, marijuana concentrates are defined as “products consisting wholly or in part of the resin extracted from any part of the plant Cannabis and having a THC  concentration greater than sixty percent.” 

Infused products are defined as “products that contain marijuana or marijuana extracts and, are intended for human use, and have a THC concentration greater than 0.3 percent and no greater than sixty percent.” 

The consumer transaction limit for concentrates mirrors what the LCB already put into place:
·         1 ounce of useable marijuana (flower)
·         16 ounces of solid infused product (like a brownie)
·         72 ounces of liquid infused product (like a soda)
·         7 grams of concentrates

In addition to allowing for concentrates, HB 2304 expressly protects a license applicant’s financial information from public disclosure.  As a result, the law now expressly grants marijuana license applicants the same privacy protections afforded to alcohol license applicants. 

Specifically, the law was revised to state that “financial information, including but not limited to account numbers and values, and other identification numbers supplied by or on behalf of a person, firm, corporation, limited liability company, partnership, or other entity related to an application for a . . . marijuana producer, processor, or retailer license” is not subject to public disclosure under our states public records act.