It should come as no surprise that there is a certain commonality to the questions our cannabis business lawyers get regarding the ever-changing and complex world of marijuana laws. So we figured there is no better way to answer the most common questions than by doing so on our blog. We are starting with Washington State because so much has been happening here recently and because everyone is doing what they can to be ready for business next month.
Over the next few weeks we will do similar posts for all of the states in which we have licensed attorneys and in which there are things to report (Alaska, California, District of Columbia, Florida, Illinois, Nevada, New York, and Oregon).
1. Can I still apply for an I-502 recreational marijuana license in Washington?
NO. The thirty day window to apply for an I-502 license was open from November 2013 through December 2013. Though the Liquor Control Board (LCB) has the power to re-open the window for licensing, it has not given any indication that it will do so anytime soon.
2. What can I do now to prepare for the next window?
Not much. Things are going to continue to change with the regulatory rules set forth by the LCB and possible legislative amendments from the Washington State Legislature. Still, in preparation for the next window, if it ever arises, you can start your Washington business now, acquire residency now, and do what you can to reserve your trademark. Other than that, it’s wait and watch if you didn’t make the first window.
3. Can I invest in an I-502 business?
That depends. If you or your spouse have been out of state and you do not have proof of three month’s residency before the date of the I-502 application of the applicant in which you are seeking to invest, the answer is NO. If you are a Washington resident and you have just met an I-502 applicant you consider to be an attractive investment and that applicant has already had its initial LCB phone interview, you can still become an investor, but the LCB will slap the applicant with a six-month processing penalty, putting them at the bottom of the pile of potential licensees. We note that many people out there (including a number of lawyers) are completely unaware of this and they have already or will get burned.
4. If I don’t qualify as a financier or as a true party of interest, can I still invest in an I-502 business?
NO. And if you do and if the LCB finds out it will cancel the license. There are some limited costs and expenses that landlords and out-of-staters can provide to I-502 licensees, but be careful.
5. I’m an ancillary delivery service, can I be a part of I-502?
NO. I-502 does not provide for cannabis delivery.
6. Can you recommend a bank?
Not yet. Federal prohibition still looms large and no Washington bank is taking on cannabis customers. A couple of credit unions are taking on limited numbers of cannabis clients.
7. Will you advise me on my medical marijuana business or help me open a medical marijuana dispensary?
NO. Due to a recent Washington Court of Appeals decision ruling that medical marijuana businesses are illegal in Washington, we have ceased providing legal advice to medical marijuana businesses or to those looking to start a Washington MMJ businesses.
8. Where can I find the zoning on my I-502 property?
Go to the Planning Department or the Community Development website in the city or county in which you plan to locate. You can do this for free and you should learn to do this anyway as zoning and distance requirements are a fundamental part of most marijuana business regulations. For reference, here is the City of Seattle’s zoning searcher tool.
9. What’s going to happen with medical marijuana in Washington?
We do not know. The legislature tried to overhaul MMJ last session but was unable to do so. Cities and counties are continuing to ban MMJ as they see fit. It’s anybody’s guess as to what will happen with the legislature in 2015, but if you’re really interested in the topic, rather talking to our attorneys, you should follow the legislature, monitor all relevant bills, and contact your representative.
10. If I can’t participate in I-502 in Washington, what are your recommendations for other marijuana states?
Right now we see Nevada and Illinois as the up-and-coming marijuana states. Both of these states have done a solid job of developing the regulatory sphere and barriers to entry. Of equal importance, neither state has a residency requirement. That being said, both states will charge you an arm and a leg to get your marijuana business license so do not even think about them unless you are really well capitalized.
We are also closely monitoring Florida and we have already done quite a bit of preliminary work with larger companies there, but legalization certainly is not a slam dunk. Even if Amendment 2 passes in November, it may not be worth your time or money. If Oregon legalizes marijuana this fall, the Beaver State will make our list of formidable marijuana markets. And, of course we are always following California and New York.