A Time for Patience

It’s always a slap in the face to get blindsided by your local government at the 11th hour. And of course the same holds true in the cannabis industry. You’ve worked incredibly hard to secure your cannabis license from the state. You’ve spent a ton of money getting into compliance with state cannabis regulations (that keep on changing and affecting your bottom-line). And you’re likely paying heavily increased rent to lease a space that for any other business would be less than half of what you pay. This is all while having to deal with federal cannabis laws that make it difficult to bank and jack up your tax rates. Then to run up against a local moratorium on cannabis businesses or a drastic change in local cannabis regulations after months of operation is yet another bitter pill to swallow.

When I-502 first passed in Washington State, there were debates and lawsuits over what Washington cities and counties could do when it came to opting out of I-502 altogether. I-502 was silent on this point, and industry folks argued that cities and counties couldn’t ban cannabis businesses while local governments (and the state attorney general) argued that they could. Ultimately, with passage of HB-2136, the game of chicken between local governments and cannabis businesses came to an end since the legislature decided that cities and counties were free to ban cannabis businesses, though those that did would cease to receive cannabis tax revenues.

“Given the local government police powers and the fact that there is no right to have a cannabis business in Washington State, cities and counties see themselves as able to regulate cannabis businesses as they see fit, so long as their regulations are lawful and constitutional and comport with a local government’s duty and power to protect the health and welfare of its citizens.”

The issue of how cities and counties in Washington State may regulate cannabis businesses remains less than clear. Given the local government, police powers and the fact that there is no right to have a cannabis business in Washington State, cities and counties see themselves as able to regulate cannabis businesses as they see fit, so long as their regulations are lawful and constitutional and comport with a local government’s duty and power to protect the health and welfare of its citizens.

Because of this, Washington State licensed cannabis businesses are finding themselves in situations where their local governments are re-thinking local regulations or just deciding to get rid of certain (but not all) cannabis businesses. In 2016, Douglas County banned and then re-regulated its cannabis producers and processors because of odor and neighbor complaints. Also last year, Chelan County opted to ban all cannabis producers and processors that were not actively operating on or before September 29, 2016.

Now Spokane County joins this list with its November 29, 2016 emergency moratorium on any new or expanded outdoor cannabis cultivation, citing multiple odor complaints received by the Spokane Regional Clean Air Agency and claiming that its existing outdoor cannabis producer rules and zoning do not “adequately mitigate the impacts associated with the outdoor production of marijuana.”

“If Spokane County eventually decides to attack existing outdoor cultivation, the chance of a legal attack against the County isn’t made any better due to the law of non-conforming uses.”

So long as Spokane County holds a public meeting on this emergency moratorium within 60 days of its passage, due process (i.e., notice and a hearing) challenges to this change are not likely to be viable. Spokane County can even extend this outdoor production moratorium to one year so long as it develops a working plan in that time leading up to final resolution of the issue.

The sad reality is that cities and counties in Washington State can usually get away with using well established laws to preserve the integrity of their zoning plans through interim zoning or via a moratorium and by pointing to allegations of immediate threats to public health and safety. If Spokane County eventually decides to attack existing outdoor cultivation, the chance of a legal attack against the county isn’t made any better due to the law of non-conforming uses.

I would like to see Spokane County go the way of Douglas County and find a way to keep new or expanded outdoor cannabis cultivation alive while balancing the interests of irritated neighbors. In some ways, an even bigger concern for these outdoor cannabis cultivators may be private legal action by their neighbors to stop all outdoor cannabis farming.

In any event, be sure to stay tuned to see what Spokane County does with outdoor cannabis cultivation.