This week, the Washington State Liquor Control Board (WSLCB) held the first two of six public forums it intends to host across Washington State regarding the implementation of Initiative 502. The first forum was held at the WSLCB Headquarters in Olympia on Tuesday night. According to news reports, hundreds of people flocked to the event to not only provide comments, but to be part of history. Board members were surprised to see that there was standing room only at the event. WSLCB Chair Sharon Foster opened the forum with one word, “Wow!” The Board admitted that they had underestimated how many people would attend the public forums.

Last night’s I-502 public forum in Seattle had a similar turnout. As an article in this morning’s Seattle Times put it, “They came in suits and cowboy hats, with cropped gray hair and long ponytails, and they filled one room at Seattle City Hall and spilled into another, about 400 strong.” At the beginning of the forum, Board members took time to briefly explain the new law to attendees and describe the steps in the rulemaking process that WSLCB will take over the coming months to implement I-502. They also emphasized the importance of public input.

Following that introduction, there were comments directed specifically at the taxes the new law intends to impose. Some urged that the 25% excise tax that will be applied at each level of the licensing system that will eventually be created – producer to a processor, processor to a retailer, and retailer to the customer – is too high. Others countered that the tax was necessary. WSLCB officials noted that they do not have the authority to change the taxes that were voted for by the public. Instead, a change to the tax structure would have to come from the legislature. During the first two years a change to the initiative would require a two thirds majority.

Others expressed concern over the competition a licensed and highly regulated distribution market will face against the black market. Individuals noted that the price must remain competitive and there must be close attention paid to supply and demand. After attending the event, Seattle Times reporter Bob Young wrote, “Consumption estimates are crucial for the state in determining how big the system should be, how many growers it will need, and how many plants each will need to produce.” WSLCB officials explained that the Office of Financial Management fiscal impact statement has placed a price estimate of a $3 per gram producer price, a $6 per gram processor price and a pre-tax $12 per gram average retail purchase price. The agency also indicated that it is seeking proposals for marijuana consulting services to assist with the issue of supply and demand, among other things.

Of course the lingering question on everyone’s mind is what course of action the federal government will take. How the federal government will respond to both Washington’s Initiative 502 and Colorado’s Amendment 64 is presently unknown. Marijuana remains a Schedule I Controlled Substance under the Federal Controlled Substances Act of 1970. In fact, just this week, the U.S. Court of Appeals for the D.C. Circuit upheld the dismissal of a challenge over the government’s classification of marijuana as a Schedule I drug, the most restrictive category. Accordingly, Washington State residents involved in marijuana production, processing, or retail could still be subject to federal prosecution. The Department of Justice is currently analyzing the new laws in Washington and Colorado and will be providing guidance to both states sometime in the near future.

The WSLCB emphasized this week that these forums are an opportunity for interested citizens to meet WSLCB staff involved in implementation, be updated on implementation and to provide input to the Board for it to consider as it develops rules. The following is a list of the upcoming public forums:

• 2/7: Clark College, Vancouver, Foster Auditorium, 1933 Fort Vancouver Way, Vancouver, WA 98663
• 2/12: Spokane City Hall, Council Chambers, 808 W Spokane Falls Blvd, Spokane, WA 99201
• 2/19: Skagit Valley College, Mt. Vernon, Theater, 2405 East College Way, Mount Vernon, WA 98273
• 2/21: Yakima City Hall, Council Chambers, 129 North Second St, Yakima, WA 98901

An audio recording of the public testimony from Tuesday night’s public forum in Olympia is now available online. Yesterday’s forum in Seattle was streamed live. The links for both parts can be found below: 

Part 1: http://www.seattlechannel.org/videos/video.asp?ID=6346

Part 2: http://www.seattlechannel.org/videos/video.asp?ID=6347

Audio from future public forums will be posted on WSLCB’s website as soon as it becomes available.

Continue to follow the Stoel Rives Alcoholic Beverages Law Blog for more updates on I-502 and the WSLCB’s rulemaking process.