Pot shop resists local ban, heads to court

With all the complications that local bans have caused for Washington’s recreational pot market, two state-licensed businessmen have decided to take matters into their own hands.

Tedd Wetherbee and Mike Henery own the Gallery, a pot shop-art gallery mash-up that celebrated its grand opening in Parkland, Pierce County, on March 1. Media attention hasn’t focused on the thousands of dollars in artwork that adorns the Soho-style space, but rather the business’s dubious legality.

The Gallery is the first state-licensed recreational marijuana outlet to open in a county that outlaws recreational marijuana. The two owners say their actions are not a jab at the county, but rather a response to something larger.

“This is two licensed businessmen exerting their right to operate,” Wetherbee said. “We got a license from the state. The state went through our backgrounds with a microscope and said, ‘You guys qualify, go do this.’ And so we’re doing this.”

One day after opening, Pierce County code enforcement descended upon the Gallery with a verbal cease-and-desist order, and on March 5 the county officially demanded they shut their doors. They have 14 days to respond and could face a $1,000 fine for each day thereafter they don’t.

Wetherbee says that doesn’t change anything.

“We plan on filing for an injunction to prevent them from trying to close us while the appeal process takes place,” he said. “And we can keep that process going as long as we want.”

In Washington, 52 of its 281 incorporated cities have enacted bans on the selling of recreational marijuana and 42 others have enacted moratoriums, or temporary bans. Pierce, Yakima, Clark and Walla Walla counties have bans in place to cover unincorporated areas, and seven more have moratoriums. There are 39 counties in the state.

All that stands between the owners of the Gallery and a fully legal operation is a Pierce County business license. In December 2013, the County Council passed an ordinance requiring recreational pot shops to obtain a conditional-use permit before being issued a business license. The biggest county roadblock, according to the ordinance, is that no permits can be distributed as long as marijuana is still considered a Schedule I substance by the federal government.

In the days leading up to the Gallery’s opening, Al Rose, the county’s executive director of justice services, said that selling marijuana, even with a permit from the state Liquor Control Board, would be a violation of Washington’s Uniform Controlled Substances Act and would constitute a criminal offense. Due to a lack in regulations, medical marijuana dispensaries are exempt from that policy.

“On your way here you’ll see three [medical dispensaries] within a half mile of us in one direction, and they’re opening every day,” Henery said. “We didn’t want to go that route. We never had any intention of going against the government by opening up an illegal dispensary. And yet these places are everywhere, without any regulation.”

Rose said that although recreational and medical marijuana are completely different beasts when it comes to regulations, they’re not going to crack down on recreational markets while allowing medical dispensaries to continue operating.

“With medical you can say, ‘Hey I’m running a dispensary and here’s my paperwork.’ That would be your defense. With recreational you don’t have that defense,” he said. He added that the county has more than 80 medical dispensaries and that the council is currently devising measures that would allow them to shut the dispensaries down if the Legislature doesn’t come up with a regulatory scheme by June.

In the 2012 election, 54 percent of Pierce County voters approved Initiative 502 authorizing the creation of a state-regulated marijuana market for adults. Other cities and counties that have outlawed recreational pot sales saw similar voting patterns. The situation is a source of tension between voters and local officials.

“This is the only time I’ve decided that I’m going to make a decision against what the majority says, and I do get criticized for it,” said Dan Roach, chair of the Pierce County Council and son of Sen. Pam Roach, R-Auburn, who is president pro tempore of the Senate as well as vice chair of the Senate Rules Committee.

Although he acknowledges people in the county want recreational marijuana, he says his time in politics has shown him people want lower taxes and public safety, two things he believes would be compromised by “marijuana users who start using harder drugs, go on to a life of crime, [and] end up in our jail system and all the rehab and social programs we have to fund.”

The city of Snohomish issued a similar ban.

“In order to get a business license, you have to comply with federal and state law. So our position is that if you violate federal law, you can’t get a business license,” said Snohomish Mayor Karen Guzak. Among Snohomish County residents, 54 percent voted in favor of I-502, and Guzak’s was the swing vote that ultimately allowed the City Council to adopt the ban in October.

The local-authority question prompted the state’s Attorney General Bob Ferguson to release a formal opinion in January 2014, saying that I-502 does not preempt cities and counties from issuing their own bans.

Ferguson’s opinion has since been upheld five times, including in a suit against the city of Fife that Henery and Wetherbee spearheaded last summer. The pair sued after the city’s temporary ban was made permanent, which effectively killed a different Gallery location the pair was already renting within the city limits. They are also suing Gig Harbor for damages after an attempt to open a Gallery location there fell through following an extension of the city’s moratorium.

Pierce County Superior Court Judge Ronald Culpepper upheld the Fife ban in August. Since then, similar cases involving Clark County, Kennewick and Wenatchee have all ended with judges ruling that I-502 does not require local governments to allow recreational pot in their areas. Culpepper ruled this way a second time in a challenge of the Pierce County ban.

Wetherbee and Henery are appealing Culpepper’s Fife decision to the Washington Supreme Court.

A Supreme Court decision – if the court decides to take up the case – would be the final word on whether local governments have the authority to opt out of I-502, or if federal law trumps state marijuana policy. Many areas are awaiting a Supreme Court ruling or for the Legislature to clarify the law.

Lawmakers are considering bills that would determine the powers of local governments to enact bans. SB 5519, the Comprehensive Marijuana Reform Act, would prevent local governments from adopting, renewing or extending any ban “unless it is submitted to a vote of the people at a general or special election and approved by a majority of those voting.” Sen. Jeanne Kohl-Welles, D-Seattle, is the bill’s prime sponsor.

One complaint from local officials is that I-502 contains no provision for distributing marijuana revenues back to local governments. Sen. Ann Rivers, R-La Center, has sponsored SB 5417, which would allocate a large portion of statewide marijuana revenues to the cities and counties that don’t have bans.

“I don’t know if [revenue] had anything to do with allowing marijuana, but it factored into their initial decision to ban it,” said Wenatchee City Attorney Steve Smith. “The local governments are left with all the enforcement responsibility, but none of the revenue.”

The city of Wenatchee was sued in June over a ban it enacted in October 2013. Although the highly-publicized suit ended with Chelan County Superior Court Judge T. W. Small ruling in favor of the city, the city council ultimately decided not to extend the ban. Today the city has multiple recreational-marijuana shops.

Guzak said she believes revenue is an important issue in navigating Washington’s new recreational pot system. Rep. Dan Kristiansen, R-Snohomish, said during a press conference in January that the lack of marijuana revenues going to local governments is a serious concern in his district.

“It’s important for those jurisdictions that are allowing recreational marijuana to be able to share in some of the revenue, because there are costs associated with having those businesses in a jurisdiction,” Guzak said.

Both SB 5519 and SB 5417 have cleared the Senate Committee on Commerce and Labor. If they gain the approval of the Senate Ways and Means Committee and then the entire Senate, they will move on for consideration in the House.

It could be a while before the Legislature finalizes any decision, and the Supreme Court is reviewing their case to determine if it will accept it for consideration, but Wetherbee and Henery say they’re a long way from throwing in the towel.

“We don’t relish in what we’re doing,” Wetherbee said. “We’re nervous; we’re apprehensive. But at a certain point in time you come to realize that you just have to do what you have to do. And if one person comes and breaks the ground, other people will follow.”