House Poised to Shut Down Medical-Marijuana Biz – Would Solve Complex Problem by Just Saying No

In Effort to Satisfy Feds, Choke Off Potential Competition for Retail Stores, Last-Minute Proposal Would Require Dispensaries to Close By September 2015

By Erik Smith
Washington State Wire

State House on penultimate day of 2014 session.

State House on penultimate day of 2014 session.

OLYMPIA, March 13.—On the final day of the 2014 Legislature, lawmakers are poised to pass a bill that would shut down all of the state’s medical-marijuana dispensaries and require patients to shop at the state’s soon-to-open highly-taxed recreational-marijuana stores.

The last-minute plan, dropped on the bar of the House late Wednesday evening, is the surprising result of a session-long effort to carve out a new role for medical marijuana, in a state where the once-forbidden drug will someday soon be sold to all comers. It started out as a bill to save the medical-marijuana biz. Now it ends it.

Lawmakers are saying it is the best idea they were able to come up after months of political argument and a showdown this week between Democrats and Republicans in the state House over marijuana taxation in general. Appalled advocates for the medical-marijuana biz were holding their heads in their hands Wednesday night. “This is just about the worst possible outcome there is,” said Craig Engleking, representing Americans for Safe Access, a national advocacy group for medical-marijuana patients and caregivers. “Patients would go from having the safe and reliable access they have now – to nothing.”

House Finance Chairman Reuven Carlyle, D-Seattle.

House Finance Chairman Reuven Carlyle, D-Seattle.

Even in a Legislature where strange things sometimes emerge under the pressure to get something done on the final day of a legislative session, this one was a stunner – a proposal that does a 180-degree turnabout from the original bill. Lawmakers say they are compelled to pass some sort of a bill regulating the state’s 500-or-so medical marijuana dispensaries. Otherwise federal law enforcement authorities might attempt to block the state’s bold new effort to allow legal marijuana sales to the state’s populace as a hole. For complicated political reasons, they weren’t able to reach agreement – so the easiest thing to do is to shut down the medical-marijuana sales channel entirely.

“We are attempting to take a modest step forward in regulating the medical marijuana market, which is totally, completely wild-West unregulated today,” said House Finance Chairman Reuven Carlyle, D-Seattle. “It is my belief, and the belief of many, that if we do not take a measured step forward and regain some control of the market, it is likely that the federal government will come in and take action.”

The plan will be introduced in the form of a striking amendment to Senate Bill 5887 on the House floor sometime today. House Democrats spent hours behind closed doors Wednesday night discussing the measure. It is unclear how the Senate will react. Medical-marijuana advocates are hoping the Senate will kill it.

Bolt From the Blue

Craig Engleking of Americans for Safe Access.

Craig Engleking of Americans for Safe Access.

You might say it is one of those measures that demonstrates why there are public-notice requirements for bills, and why there sometimes is a furor when the Legislature disregards them. By the time the state’s medical-marijuana patients and dispensary owners find out about it, the deal may already be done. Shocked Spokane dispensary owner Paul Lugo, owner of The Herbal Connection, contacted late Wednesday night by Washington State Wire, said he has been trying to read and follow and understand every gyration of the medical-marijuana bill as it has gone through torturous revisions at the statehouse. But there is no way he’ll be able to make it to Olympia in time to change any minds.

“How in the heck can they do this? How do they rewrite these things and have a vote on it the next day before anyone can even look at it and respond to it? How do you even have time to know what it says?”

Lugo noted that in Colorado, Washington’s partner in marijuana legalization, where state-sanctioned marijuana stores have already opened, commercial shops ran out of product within days and prices went sky-high. If the separate channel for medical-marijuana sales had not been preserved, patients who rely on marijuana and marijuana-based medicines for treatment of chronic conditions would not have been able to get the product they rely upon. The bill, as it passed the Senate Saturday, would have allowed Lugo to apply for a state license. Now it will require him to shut down by Sept. 2015.

Sausage-Making at its Best

The strange outcome comes as the result of an 11th-hour political argument in the state House. Republicans argued that if the state was going to make big revisions to Initiative 502, the landmark measure that legalized marijuana in this state and opened the door to state-licensed and regulated stores, then lawmakers ought to reconsider the tax structure as well. The heavy taxes that will be levied on commercial marijuana sales are expected to generate hundreds of millions of dollars every year – as much as $500 million, according to an early estimate from the state Office of Financial Management, though many suggest that might be optimistic.

But the initiative did not impose those same taxes on the state’s medical-marijuana dispensaries, which have been operating under a gray area of the law since voters approved the sale of marijuana for medicinal purposes in 1998. Until now, state officials have been loath to regulate and provide any sort of state sanction for the sale of a substance that remains illegal under federal law. And so the dispensaries have operated in a rather shadowy fashion, some remitting sales taxes, some not, as they serve an estimated 150,000 patients statewide. Best guesses at gross revenue put the figure at about $300 million a year.

The U.S. Department of Justice has promised to look the other way when the commercial retail stores open. But it has hinted that there will be legal repercussions if far-less-expensive medical marijuana, available through easily-obtainable physician “authorizations,” provides competition for the recreational marketplace. So lawmakers say they are compelled to pass some sort of legislation this year.

In the House, Republicans argue that the bigger issue of marijuana taxation ought to be considered at the same time – local governments deserve a cut, they say. They have leverage because a change to the tax structure would amend I-502; a two-thirds vote is required in order to amend an initiative within two years of passage. Thus their votes would be required. House Democrats are loath to give up a penny of projected tax revenue – they say they need it for public schools. And if a bill has to pass, and amendments to I-502 are impossible, the easy way out is just to shut down the entire medical-marijuana business.

A Horrible Result

State Rep. Cary Condotta, R-East Wenatchee.

State Rep. Cary Condotta, R-East Wenatchee.

The striking amendment, sponsored by state Rep. Eileen Cody, D-Seattle, would continue to allow patients to grow for themselves. But if they wish to purchase medical marijuana, they would have to do it in the same commercial stores that serve the populace as a whole. The bill would create a voluntary “registry,” and patients with a medical-marijuana card would be entitled to a sales-tax exemption. But they would still be subject to the same high marijuana tax rate that applies to other marijuana purchasers.

Because the new bill would not amend Initiative 502, no Republican votes are technically necessary. That eliminates their leverage in the bigger fight over taxation. State Rep. Cary Condotta, R-East Wenatchee, who had led the effort to give local governments a share of the marijuana tax revenue, said the resulting bill ignores the needs of patients. “This is horrible, and trying to circumvent the two-thirds vote is to me very tacky.”

The bill may well be a boon to the very black market that Initiative 502 was supposed to combat, Condotta said. Many cities and counties are enacting moratoriums that would prevent the state-sanctioned shops from opening, on the grounds that marijuana remains illegal under federal law. But much has to do with the fact that they don’t get a share of the tax revenue. If marijuana isn’t available across major swaths of the state, how are people who need it going to get it? “They’re just building the black market,” he said.

Dispensary-owner Lugo noted that 40 to 60 percent of the marijuana that flows to medical-marijuana dispensaries is grown by patients themselves. They’ll keep growing it, he said. “Where do they think that product is going to go?” Under rules adopted by the Liquor Control Board, they won’t be able to sell their excess to the new retail stores — only big operators can do that, under tightly monitored conditions. And if green-thumb gardeners can’t sell it to dispensaries, it’s going to go to the friendly neighborhood drug dealer. Odds are he’ll be able to compete rather well with the retail stores. He won’t be paying taxes.

What a Mess

State Sen. Ann Rivers, R-La Center.

State Sen. Ann Rivers, R-La Center.

Should the bill pass the House, the changes will require another vote in the Senate. At this point it is hard to predict which way that vote would go, given the fact that the Senate is under the control of a largely-Republican majority coalition with strong ties to the Republicans in the House. But the bill’s sponsor, state Sen. Ann Rivers, R-La Center, says it is something the Senate may have to accept in the interest of passing some sort of legislation this session. “It is a mess,” she said. Rivers said one of the biggest problems in striking a deal this year was that medical-marijuana advocates have not been united, patients fighting one way, dispensaries another. “The forces became factionalized, and they started to fight among themselves. So people get whipped into a frenzy, and then who loses? The very people we are here to help.”

But right now, it is safe to say, the disparate forces in the medical-marijuana community are in agreement – best thing to do is to kill the bill.

Ezra Eickmeyer of the Washington Cannabis Association works the doors.

Working the doors: Ezra Eickmeyer of the Washington Cannabis Association.

Ezra Eickmeyer, political director for the Washington Cannabis Association, was out working the doors of the House late into the evening Wednesday. Though the medical-marijuana biz faces the threat of federal law enforcement action, simply shutting down the stores is even worse. He noted that many of the stores sell specialty products in medicinal form – something that is unlikely to be seen on the shelves of the new retail stores. The solution to the state’s taxing marijuana problem “should not come at the expense of people who are trying to stay alive from cancer, or people who are just finding for the first time that this medicine can treat their kids’ epilepsy in ways that no pharmaceutical could,” he said. “They’re concerned about potential loss of tax revenues, and I will say there is some truth to that concern. But what they want to do to medical marijuana to fix that problem is just disastrous.”

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  • Healinhand

    It`s amazing to me that Elected officials are out to hurt the very people that elected them because of money. Elections are coming soon. I`m sure there will be a reflection……

    • NoPartyAllowed

      Excuse me peeps …. but the Irony here is thick…..I confess to being a bit amused by the fact this Kill MMJ effort originated in the democrat controlled House. The same tax and spend party hacks that preach health care is a civil right, now want to end WA medical marijuana so sick and dying people can buy pot from the state instead of growing their own.

      • ojnrwg

        The thing is, republicans are the one’s in favor of states rights. They aren’t doing their job in fashion of their original party stance. It’s just neo-liberal politics all around. That’s what we gotta change.

    • the kev

      Not me. The feds started the ball rolling with the dismantling of OUR constitution.

  • K.j. Hinton

    Works for me. Shut it ALL down!

    • Anon

      ^ You sir, need to do your research. Those “Dope Stores” are gonna make YOUR State Wealthier. So go ahead, “Shut it ALL Down”, don’t bitch when your state over-taxes you because they forwent something that could’ve taking MILLIONS of tax dollar burdens away from YOUR People. YOUR State. -_-

  • saveWAmmj

    Fuck Ezra, a sheep in wolves clothing…. PICK A SIDE EZRA

    • getbackJoJo

      He picked. He is on his own side.

  • STATE_DRUG_DEALER

    This is about taxes and shutting the grey market in untaxed weed down. Everybody knows the “medicine” from patient grows is the prime source for the street sales. Our State should not have to compete with a home grown supply of bootleg weed. The State of WA should be the only weed dealer in your neighborhood.

    The medical charade is over. “Patients” can buy their pot like everybody else.

    • ds3kah

      But its not a charade… how childish you are, making assumptions. We are saving lives.

      • STATE_DRUG_DEALER

        Saving lives!? LOL. My side hurts from laughing too hard. I am in pain.

        Pass the bong please. Save my life.

    • Baldone

      FYI, this ain’t gonna shut down the grey market; not with the prices that’ll be charged (due to this state’s extreme greed)! I’m assuming you’re being sarcastic–otherwise you’re an uninformed idiot.

      • Kris Murray

        wholesale prices are still falling, today about $4 a gram and very soon, 50 cents a gram and at that rate it can be taxed and still under $5 a gram with the retail shops charging $2 a gram

    • Kristen Emily

      It currently is taxed, dispensaries charge sales tax at the normal rate and also pay state B&O tax.

      • DonSkakie

        Some do, some don’t.

      • NoPartyAllowed

        Not enough…. they want the sales tax, BO tax, yes. That is small potatoes …. they want all those juicy i-502 taxes.

    • http://nobleexperiments.blogspot.com/ NobleExperiments

      If you are not an mmj patient with specific needs, you have no idea what you’re talking about. You should be ashamed of yourself.

      • Allison

        Having worked in a green-card prescription mill and witnessed the process up close …. I found there’s more truth to the “charade” scenario then you are willing to admit.

        You’re not so noble….shame on you.

        • Brenda S.

          When politicians actually follow the will of “We, The People” and legalize marijuana, the charades will end. Sick people will have legal access to real medical-grade potions. Regular users can get a safe supply of their chosen recreational product and state coffers will overflow. The only losers will be for-profit prisons, crooked politicians and all others who profit by its senseless prohibition.

        • Russell Orsborn

          there are alweays going to be frauds and scammers, we can’t ruin other peoples lives because of that, otherwise we should make cars illegal so drunks won’t kill us

        • Liz

          Yes there are those that abuse the system but that’s not what this person is talking about, they said if you are a mmj patient who has real needs that are specific.

    • freedom of speech

      And your an asshole too !

    • Brenda S.

      The issue is about taxation of medical marijuana, which is a valid medical treatment for many. Prescription drugs are not taxed; neither should medical marijuana. Don’t punish those who truly need it.

    • Liz

      These regulations will not change the fact marijuana is sold on the streets, it could very well increase those looking to buy from the black market if it goes through. Yes it is medicine for a lot of needy people including myself and changing 502 might make it so I can no longer access it.

      • STATE_DRUG_DEALER

        I’ll have a bright and shiny retail store in you neighborhood. Access it with the rest of the drug addicts, get in line and PAY me.

        • a budlegger

          frack you

        • Baldone

          “in you neighborhood”? You sound like a genius.

    • Evergreen Libertarian

      If people are getting a medical card from a doctor and the patients really do not need medical marijuana then maybe that is an issue to take up with the Medical Assurance Quality Commission since they license the doctors who are handing out these permission slip or whatever one cares to call them.

  • Jen Yi

    I wish people would stop perpetuating the myth that “drug dealers sell marijuana”. Drug dealers sell DRUGS: heroin, meth, ecstasy and other pills like oxyconton. People who take drugs don’t usually even bother with something as mild as marijuana, and drug dealers most certainly aren’t going to bother selling something that has a very small profit for very big risks.

    • Brenda S.

      I’ve been telling people the same thing for years, Jen. Real drug dealers understand risk and logistics. They may start kids off with weed to lure them in, but then get them hooked on something less bulky with a much higher profit ratio. Funny how our “leaders” can’t understand simple logic.

      • Allison

        Yes. In State licensed stores ONLY.

  • Jeffrey McPhee

    We at MCS of Central Washington operate a licensed, medical collective in eastern wa. We serve the sick and dying of our community with compassionate, accurate and lab tested cannbis based care plans. These politicians are set to destroy these peoples lives. I would expect each of these so called Christians may make their peace with god at their time for the pain and suffering they are set to bestow on innocent patients. These are your nieghbors, family and friends lives that about to be shattered. Shame on everyone in Olympia for letting this happen.

    • https://twitter.com/#!/zerses Moirrainefortruth

      Please tell me you and your collective are in Olympia today!

    • Kris Murray

      so you resell $1800/lbs at what? $4400? yup, thats for the patients all right

  • Tom Terrific

    So, where is the ‘funding’ for enforcement gonna come from? Where will they find an impartial jury? Will they try to overturn 502 because it didn’t eliminate the black market in pot? WTF?

  • Justin Kover

    Too bad we couldn’t move Initiative 1068.

    • DonSkakie

      Too bad Dawdy fouled the sheets and brought everything to a screeching halt. It had other problems as well though. Real Legalization will be filing tomorrow bro.

      • ds3kah

        Good to hear, Don.

  • Tom Sharples

    If WA’s medical cannabis was OK with the feds all these years, why the sudden need to change the law? Doesn’t make any sense – unless you’re just a greedy politician, cynically trying to grab more $ from those suffering from intractible pain.

    • Allison

      But it wasn’t OK with them. They repeatedly raided the so called “dispensaries” and grow sites.

      • Tom Sharples

        I was under the impression those raids were limited to facilities alleged to be operating outside the state’s parameters for medical cannabis. Altho I’m certainly not implying that the feds can be trusted.

      • SteveSarich

        If the Feds were really upset, they wouldn’t even have to raid the dispensaries. They could simply send out DEA letters, just like they’ve done before. The Federal Boogy-man was just another scare tactic the Democrats were using to justifying killing off medical cannabis in Washington. Obviously the Feds didn’t get the memo….maybe they would have raided a couple of dispensaries to make this scare tactic actually look like it had some validity.

      • gs33a

        And I just watched a couple of grows on a CNN documentary that would probably dwarf any grow in WA. Why are the feds allowing this to continue?

  • freedom of speech

    You bunch of worthless fucks , the people voted it in and you think that any one of you will get reelected go fuck yourselfs you gready basturds can all rot in hell !

  • freedom of speech

    Time to vote out the encumbants , each and everyone of them !

  • http://trixterphillips.wordpress.com/ TriXteR Phillips

    It sounds to me that Washington’s medical consumers and medical-use centric activists must come together with recreational consumers and other cannabis activists to draft an initiative that creates a well-regulated and patient friendly system with tiered home-grow plant and possession limits; a registry backup up by changes to Washington’s RCW 69.51A, and other relevant and applicable chapters, to provide full protection for legal patients who abide by these favorable laws; and regulations that create a legitimate and structured system for licensing and regulating a state wide dispensary system that does not permit the opting out by counties, cities, and other municipalities.

  • dltaylor51

    Time to get out and vote the democrats out of office,they are not fit to lead and everything they do has to be redone,enough is enough.

  • Arunigrace

    Greed, avarice, and pride go right before they all get their asses booted out of their offices. Politicians of Washington State *please* leave the marijuana farmers alone, leave the home growers alone, leave the small mom and pop retailers alone, and STOP trying to defy the will of the voters who put your stupid,selfish, egotistical asses in office; or prepare to lose your jobs!

    Take your big pharma friends, your Monsanto friends, your FDA and Dept. of Ecology friends, your Dept. of Energy friends, your big booze industry friends, your S&L banking friends, your tech industry friends, and your big AG friends and go elsewhere. Washington State doesn’t need your acts of endless backstabbing law-abusing bullshit.
    Leave marijuana/cannabis, and hemp farming and distribution ALONE. Let the citizens of Washington State rebuild their lives by letting them work the jobs that you could NOT provide. Thank you.

  • Guest

    Greed, avarice, and pride go right before they all get their asses
    booted out of their offices. Politicians of Washington State *please*
    leave the marijuana farmers alone, leave the home growers alone, leave
    the small mom and pop retailers alone, and STOP trying to defy the will
    of the voters who put your stupid,selfish, egotistical asses in office;
    or prepare to lose your jobs. Take your big pharma friends, your
    Monsanto friends, your FDA and Dept. of Ecology friends, your energy
    friends, your big booze industry friends, your S&L banking friends,
    your tech friends, and your big AG friends and go elsewhere. Washington
    State doesn’t need this bullshit.
    Leave marijuana/cannabis, and
    hemp farming and distribution ALONE. Let the citizens of Washington
    State rebuild their lives by letting them work the jobs that you could
    NOT provide.

    • Arunigrace

      Forgive me for the double post. I was writing while mad. Moderator can you please remove this?

  • Bob

    If they really want tax revenue, how about eliminating production caps? The law as it stands guarantees 100% of the current market will be for the cartels, with the state only selling extra 15% sales that will come from legalization. The only question in my mind is: “is it really possible for people to be this stupid, or have they been paid off ?”

  • JAhootz

    The way WA is handling both medical and recreational cannabis is a shame. It is my hope that there will be 20 different ways that cannabis regulation works across this country (the States should be incubators of various ways of handling it and eventually the best ways will win out), but boy am I glad I live in CO where it was handled in a sane and effective way for the most part.

  • Justin

    Never trust an article that spells the word “whole” as “hole”.

  • Mike Reveile

    It is all about extortion and how much you are will to allow. I don’t believe the state “Protects me” at all… not even under the guise of “occupational licenses”.

  • Al Boisvert

    want nothing to do with this type of so-called Legalization

  • Evergreen Libertarian

    Good afternoon Mr. Smith.
    I saw you on the House floor last night taking a few pictures. There were about a dozen of us sitting in the gallery who oppose the government interfering with the medical market. Most of us were wearing red. We began to arrive about 10 a.m. and did not leave until after the gavel fell for the last time. All together about 14 hours. We are patients, veterans, friends and family members of patients. We testified on legislation, wrote letters, sent emails and called on Representatives and Senators in their offices. Some of us belong to a political party and others do not. We are here and we are involved and we are not going away. Marijuana was legal for years in this nation for medical purposes and we will continue the effort until it is fully legal once again. When and if work sessions begin this summer or fall we will be there as well.

  • Richard Ford

    I see lots of people getting replaced in the House soon ha ha… This is America land of the free and if they don’t do the things we like its easy to replace them…. I have a bigger list of people to not Vote for now…

  • Healinhand

    WOW….All of this because of greed. Its a plant people. God put it here.It wasn’t manufactured in some lab.

  • Ministry of Truth

    Ezra wrote 5887 and sells securities for I-502 businesses.
    Now he gets credit for killing the very problem he created?

    Next the Wire will give him reedit for saving a kitten from a tree-
    after throwing it up there in the first place and sitting idly by
    while someone else actually rescued the critter. 1984 is alive and
    well in the Washington Wire coverage.