Earlier this week the Metropolitan King County Council lifted its moratorium on legal marijuana businesses. Marijuana businesses, however, will be strictly limited to certain locations in unincorporated King County. Licensed marijuana production and processing facilities will only be able to locate in rural areas on parcels that are 10 acres or more. Additionally, licensed retail stores must be situated at least 1,000 feet apart from each other in order to limit the concentration of stores in certain areas. More on the new legislation can be found here.
The big question for me is – why do local jurisdictions keep imposing moratoria on legal marijuana businesses? It has now been over two years since the first legal marijuana businesses were licensed by the State of Washington. None of the dire consequences that were voiced when cities and counties were first considering whether and where to allow legal marijuana businesses have come to pass.
The reality is that unlike virtually every other legal business, licensed marijuana businesses operate under the strict scrutiny of the State of Washington and are subject to additional regulations at the local level. Even in jurisdictions that allow legal marijuana businesses to operate, these businesses are generally subject to stringent zoning and other land use development regulations. The third edition of my ebook – Turning Green to Gold has recently been released and details how local zoning regulations and building code requirements affect the siting and operation of legal marijuana businesses.
In trying to determine whether to prohibit or strictly regulate where legal marijuana businesses may locate, local jurisdictions often overlook the big picture – which is that the fewer places that allow marijuana businesses to operate, the less likely it is that the legal marijuana marketplace will succeed. In order to defeat the black market, there needs to be sufficient locations for legal marijuana businesses to operate.
Licensed marijuana businesses are already at a significant disadvantage due to the federal illegality of marijuana. Marijuana businesses cannot open bank accounts, claim standard tax exemptions and deductions, obtain federal intellectual property protection, obtain bankruptcy protections, etc. Having very few choices in where to locate your business creates another obstacle to being able to operate a viable legal business.
For more information on the regulation of marijuana businesses, please contact Heather Wolf.