Seattle City Attorney Urges Legalization of Home Cultivation and 'Marijuana Use Lounges,' Abolition of Medical Dispensaries


Office of Pete Holmes

During the session that begins next week, the Washington State Legislature is expected to tackle regulatory issues raised by I-502, the 2012 ballot measure that legalized marijuana for recreational use. In a 20-page memo released yesterday, Seattle City Attorney Pete Holmes, one of I-502's leading backers, offers some suggestions, including integration of the medical and recreational marijuana industries, legalization of home cultivation, and simplification of marijuana taxes. He also urges the Seattle City Council to legalize "marijuana use lounges." Here is a description of Holmes' major proposals:

Medical Marijuana. Holmes urges the legislature to abolish commercial suppliers of medical marijuana that operate as "collective gardens":

Collective gardens—intended to be truly cooperative, closed systems, and not commercial storefronts generating profits for entrepreneurs—are exploited via a loophole that does not limit how quickly collective garden memberships can change. Robust commercial activity involving hundreds, even thousands, of individuals with medical authorizations purchasing marijuana from a single storefront is rationalized as legitimate collective garden participation by constantly rotating the identities of the 10 members of each garden. Such inventiveness may not violate the letter of the law, but plainly undermines its spirit.

Holmes worries that these "unlicensed, unregulated, and untaxed suppliers will always have an unfair economic advantage" over the marijuana merchants approved by the Washington State Liquor Control Board (LCB). By serving recreational users in the guise of medicine, he says, these dispensaries are undermining the goals of I-502, cutting into state tax revenue, and inviting federal intervention. Instead Holmes endorses the approach embodied in legislation introduced by Sen. Jeanne Kohl-Welles (D-Seattle): "All marijuana-related business activity, whether for medical or recreational use, would be regulated under a single framework—the one already created by I-502 and the LCB's work over the past two years." To help ensure that the needs of bona fide patients are met, Holmes would allow them to obtain waivers exempting them from the state's hefty marijuana taxes. He also would have the LCB certify "medical-grade cannabis" and "medical cannabis consultants."

Home Cultivation. Currently patients and their designated providers may grow up to 15 plants (or more, if they can present evidence that it's medically appropriate). Holmes would instead let every adult 21 or older grow up to six plants at home. He says this change, which will please recreational consumers but is bound to raise patients' hackles, would "further reduce the need for 'valid documentation' that fosters medical marijuana 'authorization mills,'" "bring Washington's marijuana law into line with the other three states to legalize marijuana for adult use (Colorado, Oregon and Alaska) and Washington, D.C.)," and "establish more equity between marijuana and home beer brewing and wine making."

Taxes. Holmes says Washington's marijuana taxes, currently 25 percent at each of three levels, "should be collapsed into a single tax, applied at the point of sale, adjusted upward to make the change revenue-neutral, and characterized as a consumer tax rather than one paid by the business." That last change, he says, would "eliminate licensee double-taxing under I.R.S. Code § 280E, which prohibits businesses engaged in (federally) illegal marijuana commerce to deduct business expenses—including excise taxes paid by such businesses."

Local control. Holmes recommends that the legislature let local governments regulate but not ban cannabusinesses (as many have done), perhaps sweetening the deal by sharing marijuana tax revenue with them. A dispute over revenue sharing helped kill marijuana legislation last year.

Penalties for underage users. Holmes thinks penalties for underage cannabis consumers, which currently are more severe than penalties for underage drinkers, should be the same. He also suggests that it's unfair to charge merchants who sell marijuana to people younger than 21 with a felony instead of a misdemeanor, which is how selling alcohol to underage consumers is defined.

Cannabis consumption. Holmes notes that consuming marijuana "in view of the general public" remains illegal under I-502, but that phrase is not defined. He suggests that the state legislature define this offense in a manner similar to the offense of possessing an open alcohol container "in a public place," defined as a place to which the "general public" has "unrestricted access." The implication is that cannabis consumption in certain age-restricted establishments might be allowed.

Holmes goes further, recommending that the Seattle City Council legalize "marijuana use lounges" where people could consume cannabis via vaporizers and edibles (but not smoking, which is banned by state law). "These lounges would be open to customers 21 years of age and older with mandatory ID checks, prohibit alcohol, and have minimum ventilation requirements," Holmes writes. "Because state law does not allow consumption of marijuana where it is sold, patrons would have to bring their own. Lounges could charge a cover and sell food and nonalcoholic beverages." Such businesses would fill a need for tourists and other cannabis consumers who do not have ready access to private residences where marijuana use is allowed.