Mike Henery wanted to open a retail marijuana store. The Gig Harbor, WA resident thought that everything was going smoothly. He created a company– MMH, LLC– in December, 2013. Henery got the good news on May 1 that he would receive one of 17 licenses for retail marijuana outlets in Pierce County. The ganjapreneur then leased a location in Fife, WA to house his retail store. Only one thing stood in his way: the city of Fife.
When Henery went for a business license on July 7, the city’s Court Clerk refused his application. A week later, with no other relief available, Henery filed a complaint with the Pierce County Superior Court.
This isn’t a David and Goliath story. While MMH, LLC can be seen as the little guy, Fife isn’t much of a giant. The city has a population of only 9,333, making up 1.1% of Pierce County. In sharp contrast to Fife’s low profile are the cast of characters who would soon descend upon the legal drama.
Jennifer Combs of VSI Law Group filed Fife’s reply to MMH’s complaint on August 4.
Combs explained that the Fife City Council, by a 5-2 vote, passed Ordinance 1872 on July 8. This local law put a one-year moratorium on retail marijuana operations within the city limits, an area of about five and a half square miles.
Fife’s main argument was that its ordinance remains consistent with Washington’s state constitution. The city further argued that, if local bans were not permitted, the state’s marijuana law couldn’t be enforced since it is trumped by federal law. The second argument gave the case a higher profile.
Washington State Attorney General, Bob Ferguson, filed a motion on July 31 to intervene. He said in a press release that he was not arguing for either party. Instead, his argument would be to protect I-502, the ballot initiative that legalized marijuana for adult use in the state.
“This case presents a significant threat to the implementation of Initiative 502,” Ferguson said the day after he filed his brief with the court. “My office will continue to vigorously defend I-502 and uphold the will of the voters.”
Ferguson’s argument split on the issues. Included in his brief was a recounting of the AG’s assertion, previously stated in a January memo from his office, that localities do have the right to set zoning and other local rules.
“That authority comes directly from article XI, section 11 of the Washington Constitution, which provides that ‘[a]ny county, city, town or township may make and enforce within its limits all such local police, sanitary and other regulations as are not in conflict with general laws.’” Ferguson wrote.
On the question of federal preemption, the AG expressed his disagreement with Fife’s claim. Ferguson made his opinion clear that if the Court ruled against the ban in Fife, I-502 still holds up to judicial review. He argued that the federal Controlled Substances Act, or CSA, does not prohibit state marijuana laws.
The American Civil Liberties Union of Washington took up the case against the local bans a week after Ferguson intervened. The ACLU-WA received permission to file a brief on behalf of three state-licensed marijuana businesses. The interested parties, Downtown Cannabis Company in Pacific, Monkey Grass Farms in Chelan County and Rainier on Pine in Tacoma stated their intent to challenge similar marijuana business prohibitions.
Alison Holcomb, Criminal Justice Director for ACLU of WA, filed the brief. In it, she asserts that the assumption that localities may prohibit marijuana businesses “would completely block the implementation of the comprehensive regulatory scheme enacted by Initiative 502.”
Holcomb joined Ferguson in defense of the state law against “federal preemption.”
Fife argued that it can’t be forced to follow I-502 because federal drug laws prevent the state initiative. Holcomb retorted that, on the contrary, Congress specifically “saved state drug laws from preemption” by federal law in the Controlled Substances Act.
The day after the ACLU and the Attorney General filed their briefs, lawyers representing Pierce and Lewis counties, the city of Yakima and the town of Wilbur did the same. The other jurisdictions stated that they had a compelling interest in the case and argued in favor of Fife’s motion for summary judgment allowing the prohibition to stand.
“I-502 contains no express or implied intent to preempt the City’s plenary constitutional authority to regulate.” Lawyers said about the question of state preemption. “If this Court finds that state law preempts the city ordinance, it must move to federal law analysis,” which they say will invalidate I-502.
After all the briefs were filed, Judge Ronald Culpepper scheduled oral arguments for August 29 at 9am. The day before the hearing, Marijuana.com got some insight on the issue of federal preemption from Jim Doherty, a former drug prosecutor who now works with groups like Law Enforcement Against Prohibition.
“I’ve sat through a number of presentations about the federal preemption issue,” Doherty said in a phone interview. He shared his opinion that the federal government isn’t pressing the issue because it would be a close case.
Doherty said Fife could be an important test case about federal preemption, depending on “how it’s handled by the appellate court.” If Judge Culpepper brought the issue forward, it could create a legal mess for both state and federal governments.
The Department of Justice’s “Cole memo” allowing states to carry out their marijuana laws as long as they follow certain federal priorities has been crucial for the growth of cannabis. A court ruling to the contrary would render the memo useless as protection.
Unfortunately, Henery won’t be setting up his shop in Fife any time soon and neither will anyone else. After hearing oral arguments on August 29, Judge Culpepper denied MMH’s motion for summary judgement the same day and upheld the right of localities to disallow marijuana operations. While Culpepper stated that he would not directly address the federal preemption issue, he did mention his feelings on how he would have ruled.
“I think I am inclined to agree with the interveners that there is no federal preemption here. The statute itself grants the State quite a bit of authority. The Feds do not preempt the State’s authority to legislate in this area.” Judge Culpepper said.
While the judge stated unequivocally that the purpose of his ruling was not to judge whether I-502 is good or bad, he did express his personal feelings about the law to some extent.
“It may be great legislation, maybe not so great, but it does set up what appears to me to be a fairly well thought-out, comprehensive system of licensing and regulation of marijuana production, processing, and retailing.”
Culpepper summed up the crux of the case, in his opinion, as being an issue of state goals in I-502 conflicting with municipal laws backed by the state’s constitution.
“The plaintiffs have apparently valid licenses issued by the Liquor Control Board, which is authorized to set up the regulatory scheme to suppress the black market, to raise taxes, all the good things Initiative 502 hopes to do, but Fife does not allow them to do their business within the borders of Fife.”
The judge concluded that the local rules do not “irreconcilably conflict with I-502.” With the burden of proof on the parties opposing Fife’s ban, this was enough to settle the issue without moving on to the federal preemption issue.
Marijuana.com caught up with Holcomb to get her opinion on what the ruling means for the future. She provided us with the following statement in an email:
“The ACLU of Washington disagrees with Judge Culpepper’s ruling on local bans, and the decision is likely to be appealed, but ultimately this issue should be put to rest by the legislature. Patchwork implementation will undercut the goal of undermining the black market and frustrate the will of the voters who passed Initiative 502. If the legislature nevertheless decides to allow cities or counties to ban licensed and regulated marijuana businesses, such bans should only be enacted by a vote of the local residents, the same way the Washington State Liquor Act allows for ‘dry counties.’”
With many localities in both Washington and Colorado prohibiting marijuana operations by zoning them out, these issues will continue to be considered and addressed on many levels. As for what marijuana businesses should do while the courts and legislature sort it out, Judge Culpepper had a suggestion.
“I think if I were going to set up a shop, I would do it right across the border.” Culpepper said.
Fife represents another battleground in the continuing War on Marijuana–in a state where weed is legal.