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Can Legal Marijuana Market Survive Moratoriums?

Clark County’s two remaining commissioners approved a total moratorium on any marijuana businesses, including retail, growing or processing, in unincorporated areas of the county.  The ordinance is like one passed by Pierce County after the state attorney general gave a formal opinion that local  governments could regulate marijuana businesses to the extent of totally banning them despite the state law allowing them.

This leaves the City of Vancouver and the city of Battle Ground as the only areas where retail sales of marijuana could legally take place under Initiative 502. Vancouver has also allowed growing and processing of marijuana in particular areas of the city.

The state law was intended to allow the development of a legal recreational marijuana market in Washington, despite the fact that marijuana remains illegal under Federal law. The Federal Department of Justice has issued statements which indicate licensed marijuana businesses would not be prosecuted for drug charges under Federal law so long as appropriate controls were observed. There have also been some signs that banking restrictions may be eased.

The state Liquor Control Board is charged with regulating the new industry. Because there were more applicants for retail licenses than were allocated to the county and cities, a lottery took place to determine who would be given a retail license.

Proponents of the law believe that the state would benefit from the taxes levied on sales of legal marijuana and that a legal market would eventually drive out the black market on marijuana sales. With no retail sales locations yet up and running anywhere statewide, these predictions remain speculative. Colorado, which has a somewhat similar law to Washington, collected more than 3 million dollars in tax revenue in February.

With fewer locations available locally due to the county’s actions, the legal market will necessarily be concentrated in Vancouver. Retail sales are expected to begin this summer. Whether the county’s moratorium strangles the industry in its cradle will probably not be known at least until the end of the year.

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