Lengthy Litigation in The City of Wenatchee

On June 3, 2014, SMP
Retail, LLC moved forward with suing the city of Wenatchee, seeking to overturn
its ban on state-licensed cannabis businesses, creating Washington’s first I-502 litigation matter against a municipality with
such a ban.

Wenatchee became
the first target (out of the 69 cities and counties with bans or moratoria) for
such a lawsuit because it prohibits cannabis businesses based on federal law
alone. SMP’s arguments are that: 1) Wenatchee has no authority under State law
to “opt-out” of I-502; and that 2) Wenatchee cannot rely on federal law for its
ban because no positive conflict exists between state and federal law, that
I-502 and federal law can stand together.

The
City of Wenatchee requires individuals and business entities to obtain a
business license from the City before engaging in any kind of business, trade,
or profession within Wenatchee city limits. Under Wenatchee City Code 5.76.020,
a business’s activities must be lawful under city, state, and federal law to
qualify for a City of Wenatchee business license. On October 24, 2013, the
Wenatchee City Council voted four to three against a proposed ordinance that
would have permitted State-licensed cannabis businesses to operate within
Wenatchee city limits. After the October 24, 2013 council vote, Councilman
Bryan Campbell stated that “Federal law is superior over the state,” and
Councilman Keith Huffaker stated, “It’s still federal law. If we want it
changed, we need to go to the federal government and get it changed.”

The Liquor
Control Board ultimately allocated three cannabis retail locations to the city
of Wenatchee and SMP Retail was chosen to move forward in the licensing process
where no retail lottery was held in the City. Nonetheless, on May 3, 2014, the Liquor
Control Board received a written Notice of Objection to SMP Retail’s cannabis
application from Wenatchee. SMP Retail filed suit approximately one month later
in Chelan County Superior Court to finally settle the matter once and for all.

Wenatchee
has made it publicly known that it will re-visit and reconsider its ban on
I-502. If the city ends up settling the case (going for regulation or zoning
instead of prohibition), while no legal precedent for cities and counties will yet
be set, it will be one less ban in Washington State and a tiny victory for
recreational cannabis in Washington. 

The Canna Law Group is a practice group of Seattle-based law firm, Harris & Moure, pllc. The Canna Law Group focuses on cannabis business law and litigation under both medical and recreational cannabis laws in Washington State. The Canna Law Group can be contacted via phone or web at (206) 224-5657 orwww.cannabislawseattle.com.