Legal Pot Tests Landlords, Lawyers and Bankers

Joni Balter is a longtime Seattle columnist and writer who contributes to local NPR and PBS affiliates.
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Voters in rural red-state eastern Washington joined blue-state, techie urbanites on the western side of the Cascade Curtain more than a year ago and legalized recreational marijuana for adults -- a rare example of a political idea the two sides could agree on.

For now, an adult can fire up a joint at home or bake pot cookies -- all legal. Many other details remain a work in progress.

In the long run, legalization should be good for Washington. Law-enforcement resources can be used more efficiently. Pot can be sold safely in private, state-licensed stores, with an entrepreneurial culture built around growing, processing and selling a legal product. Horatio Alger meets “Wayne’s World.”

But as experts design rules for the new industry, it is clear that no state can just flip a switch and make marijuana legalization run smoothly. Creating the new businesses and etiquette and protocol is daunting.

Stores in Colorado, which also legalized recreational pot, opened Jan. 1. The first retail outlets will greet customers in Washington in May or June -- 18 months after voters said yes.

A sample of the numerous rules and challenges:

-- Promoters of the Washington citizens’ initiative (it passed by 56 percent) didn’t want it to be easy for young people to obtain pot. For the federal government, which still considers marijuana illegal but is giving the two states a tentative pass, this is non-negotiable. Zoning rules reasonably don’t allow pot stores within 1,000 feet of schools, playgrounds, day-care centers, parks or libraries.

-- Legalization isn’t supposed to be a euphemism for pot promotion. Advertising is limited and can’t be near schools, day cares and playgrounds. The idea is to have one somewhat understated sign on the store. This isn’t Baskin-Robbins with 31 flavors bursting from a window display. And people seem fine with that, so far.

-- How legal is legal? Can smokers light up in public venues? No. The state treats pot somewhat like hard alcohol. It is lawful to drink alcohol in a bar, but marijuana has no analogous venue. (Exceptions were for a party marking the first anniversary of legalization last month, held behind two screened fences at Seattle Center, and an annual “Hempfest” that Seattle tolerated before pot became legal.)

-- Individuals with THC levels (tetrahydrocannabinol) greater than or equal to 5 nanograms per milliliter of blood can be busted for drugged driving.

This is almost the easy part, relatively, compared with the banking rules. Many banks are unwilling to handle pot transactions, because federal law and regulations treat such activity as money laundering.

Bank of America Corp., which already manages some of Washington state’s banking needs, has agreed to handle state revenue from marijuana, but private pot businesses are on their own.

No one is going to benefit from an arrangement ensuring that the new enterprises are cash-only endeavors, save for a few bad guys looking for an easy robbery target. For the effort to be successful, banking rules need a serious tweak. The governors of Washington and Colorado have asked the federal government for flexibility so that legal pot businesses can gain access to banking services. No luck so far.

President Barack Obama signaled his willingness to allow the two-state experiment to unfold when he said, in the possible understatement of the decade, that he had other fish to fry. The Department of Justice subsequently gave a wink and a nod to Colorado and Washington provided the rollout is well-managed.

Among other things, Washington voters didn’t change employment law. Many employers can still test workers for drugs and punish rule-breakers.

“Non-union private-sector employees can be fired for using, even if it had no impact on their ability to do their jobs,” said Michael Subit, an attorney who practices employment law in Washington.

At last summer’s Hempfest, Seattle police handed out bags of Doritos as a humorous way to educate people about the new marijuana rules. (They attached a new rule to each bag.) But many officers stayed on the perimeter, leery of venturing into the crowd and appearing to condone public drug use. Others fretted they might test positive from secondhand smoke -- if the department opted to check. (The smoke inside Hempfest can be extremely thick.)

Many people wouldn’t be comfortable with a school bus driver who smokes pot, and that makes sense while those employees and others in similar positions are on the job. Over time, with perhaps additional legislation and new union contracts, lawyers I talked to say it will become clear who can and can’t smoke pot on their own time.

Renters in apartment buildings who light a joint after a tough workday may think the new law ensures that cherished freedom. Not if a landlord deems the place smoke-free.

“Private landlords can make rules for the use of their property,” said Bruce Turcott, the assistant state attorney general working with the Liquor Control Board on the new pot rules.

Washington is one of the most zealous anti-cigarette locales in the world, so any landlord who doesn’t want a tenant to smoke easily wins that argument. That seems reasonable.

The grayer area involves liquid pot and edibles. Most building owners probably wouldn’t know or care about those items. But if they did, they might have to specify that in writing.

The marijuana experiment isn’t as carefree as it might seem. I almost voted no out of concern for teenagers who might view legalization as permission to smoke too early in life. I voted yes at the last minute, because I figured that Seattle, famous for its love of process and regulation, would impose enough of its rules to keep a lid on things -- pun apologies.

The many detractors of legal pot include those who fear that the new laws can only increase use. The Denver Post recently reported anecdotal evidence of an increase of marijuana-related incidents among middle- and high-school students in Colorado. Marijuana use has been linked to developmental and social problems for young smokers.

Some people argue that pot is less worrisome than alcohol, which is probably true -- for adults, anyway.

Taking that a little further, Randy Simmons, deputy director of the state Liquor Control Board, which is overseeing the recreational marijuana program, reflects the mindset of both red and blue Washington. He describes himself as an anti-government state employee.

“I like people to have the ability to make their own decisions,” he said. “This initiative allows them to do that.”

The Northwest has long been a laboratory for new ideas -- for society and business.

After all the public hearings on legalization, all the rule making, adventurous Washingtonians are ready to march toward the new frontier to see if they can keep the federal government at bay and make the bold experiment a success.

Legalization is still taking shape. Lawyers, lawmakers, regulators and new entrepreneurs will keep cutting and pasting until they get it right.


(Joni Balter is a longtime Seattle columnist and writer who contributes to local NPR and PBS affiliates. This is the second of three articles on marijuana legalization in Washington state. Read Part 1.)


This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author of this story:
Joni Balter at jcbalter@gmail.com

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net