Following up on our posts on Washington Initiative 502, my colleague Claire Mitchell had the chance to speak with Colin O’Keefe of LXBN regarding the initiative and its implementation for businesses. In the brief interview, Claire explained the rulemaking by the Washington State Liquor Control Board currently underway and offered thoughts on what Washington’s marijuana industry may look like. 

The Washington State Liquor Control Board (WSLCB) announced its tentative timeline for implementation of Initiative 502 (I-502) yesterday. WSLCB developed this timeline in order to keep the public informed and to identify significant milestones in the implementation process.

Rulemaking began in early December with the filing of CR101 for the Producer License, a notice of proposed rulemaking. WSLCB is still accepting

As we pointed out in our post “Understanding the Conflict Between Federal Law and Washington Initiative 502,” possession and sale of marijuana remains illegal under federal law even as states push to legalize marijuana for medical or recreational use. We quoted Jenny Durkan, the U.S. Attorney for the Western District of Washington, as stating that the U.S. Department of Justice’s (“DOJ”) “responsibility to enforce the Controlled Substances Act remains unchanged” in the face of state initiatives like Washington Initiative 502, that legalized the possession of certain amounts of marijuana. 

Adam Nagourny of the New York Times reported today on the sobering case of Matthew R. Davies, who was indicted last July on federal charges of cultivating marijuana, following a DOJ raid on two dispensaries and a warehouse filled with nearly 2,000 marijuana plants that Davies owned and operated. Davies reportedly saw a big business opportunity after California legalized the use of marijuana for medical purposes. “We thought, this is an industry in its infancy, it’s a heavy cash business, it’s basically being used by people who use it to cloak illegal activity,” Nagourny quotes Davies as saying. “Nobody was doing it the right way. We thought we could make a model of how this should be done.”Continue Reading A Cautionary Tale in the Conflict Between Federal and State Law Over Marijuana Legalization

In Part I of our “Understanding Washington Initiative 502” (“I-502”) series, we described how I-502’s licensing regime is scheduled to go into effect late next year. There is no question that I-502 legalizes possession of certain amounts of marijuana under Washington law, and the state licensing structure aimed at regulating the production, distribution, and retail sale of marijuana reflects this fact. But as a Schedule I drug subject to the federal Controlled Substances Act (“Act”), possession and sale of marijuana remains illegal under federal law. I-502 does not change this basic fact, regardless of whether the Washington State Liquor Control Board succeeds in establishing the rigorous regulatory regime envisioned by I-502. 

I-502 intends to establish a well-regulated market that will allow Washington state to tax a commodity that had been pushed into the underground economy. Achieving that goal depends on capital investments in the regulated marijuana market in Washington State. But will investors be willing to fund a marijuana start-up if federal law diverges significantly from state law – particularly when federal law includes criminal sanctions? That will depend on the federal government’s response to states like Washington and Colorado that have chosen to de-criminalize marijuana.Continue Reading Part II: Understanding the Conflict Between Federal Law and Washington Initiative 502