Main Menu
Posts tagged I-502.

Washington’s Initiative 502 decriminalized, licensed and regulated marijuana sales under state law, and prospective retail licensees are gearing up to begin operations. On June 3, 2014 a suit was filed by one prospective licensee against the City of Wenatchee over its prohibition on issuing business licenses for business activities that are not lawful under city, state, and federal law. Because the sale of marijuana remains unlawful under federal law, Wenatchee has made clear that it will not license marijuana businesses that are duly licensed by the state Liquor Control Board to operate in Wenatchee. In October 2013, the Wenatchee City Council voted 4-3 against a proposed ordinance that would have allowed business licenses to be issued to state-licensed marijuana businesses.

The suit challenges Wenatchee’s authority to prohibit business activity that is lawful under state law and licensed by the state. This issue is being hotly debated by Washington legal authorities. In January the Washington Attorney General issued a non-binding opinion in which he concluded that I-502 did not prevent local governments from banning marijuana businesses within their jurisdictions. In April, a Washington Court of Appeals issued an opinion concluding that local governments could prohibit collective medical marijuana gardens because they remained unlawful under the State’s medical marijuana law. It remains an open question whether Washington courts will allow a local government to prohibit business activity that is lawful under state law or whether the state-licensed and regulated marijuana market will preempt local bans.

This suit will be closely watched by local governments and marijuana businesses alike. If the reaction of Wenatchee’s Mayor reported, as by The Wenatchee World, is any indication, local governments are not excited about becoming the subject of costly litigation to establish the boundaries of state and local law: “‘I’m trying to balance a budget.’ . . . ‘We’ve got big issues in the city. Having the distraction of this marijuana issue is not something I want to deal with.’”  These concerns could rise dramatically if Wenatchee chooses to respond to such suits by arguing that the state’s licensing and regulation of marijuana businesses is in conflict with federal law. That claim would expand the lawsuit while threatening newly forming marijuana businesses statewide, and could invite the participation of groups like the American Civil Liberties Union and possibly Washington State itself to defend state law.

Unless expressly stated otherwise, any federal tax advice contained in this communication (including attachments) is not intended to be used, and cannot  be used, for the purpose of avoiding federal tax penalties.

This e-mail is for the sole use of the intended recipient(s). It contains information that is confidential and/or legally privileged. If you believe that it has been sent to you in error, please notify the sender by reply e-mail and delete the message. Any disclosure, copying, distribution or use of this information by someone other than the intended recipient is prohibited.


Search This Blog



About Us
We regularly update clients about changes in real estate law and on industry trends. This includes briefing clients on legislative proposals in the federal tax, housing and other legal areas affecting their businesses. Staying current enables you to anticipate and prevent legal problems as well as capitalize on new developments.
Read More

Recent Posts


Select Category:


Select Month:


Back to Page

We use cookies to improve your experience on our website. By continuing to use our website, you agree to the use of cookies. To learn more about how we use cookies, please see our Cookie Policy.