Opinion editorial by Rep. Terry Nealey: Legislature navigates uncharted territory on implementation of legalized marijuana initiative

Special to the Prosser Record-Bulletin

On Feb. 19, the Washington State Economic and Revenue Forecast Council released its quarterly revenue forecast, writing into its report for the first time in its 30-year history, projected revenue from the sales of recreational marijuana. Nearly $51 million in marijuana tax revenues are projected for the 2015-17 budget cycle as a result of voters approving legalized recreational marijuana through Initiative 502 (I-502).

This session, the Legislature is finding itself with more questions than answers as it struggles with implementation of I-502. As a member of two House committees – Finance and Judiciary – both of which are dealing with these issues, I have had a front seat at the discussions and debates as we navigate uncharted territory. With the exception of Colorado, which is slightly ahead of us in implementation of its own legalized marijuana initiative, no other state has had to struggle with this issue.

For example, there’s the concern of where marijuana can be sold. The state Liquor Control Board, tasked with creating the framework for licensing and regulating marijuana production, distribution and possession for persons over 21, received nearly 1,700 applications in November from people seeking to grow, process or sell marijuana. Yet, more than three dozen Washington cities, with the blessing of the attorney general, have adopted moratoriums of up to one year on marijuana businesses – because many are concerned marijuana remains illegal under federal law. The city of Prosser is not among them, although it has placed a moratorium on medical marijuana dispensaries because they are unregulated. These other moratoriums, however, are complicating implementation of I-502, because they create a patchwork of where retail sales can and cannot be established across the state.

There’s the issue of taxation. The initiative created three new excise taxes: 25 percent on the producer, 25 percent paid by licensed processors, and 25 percent on the selling price on retail sale of marijuana products. This is in addition to any other general, state and local sales taxes. There are concerns such high taxes would fuel the black market that could offer cheaper prices.

The initiative directs new marijuana revenue to several sources within the general fund, but many others want a piece of the pie, including local governments and law enforcement agencies.  Several bills have been introduced to redistribute this revenue, such as House Bill 2732, which would set aside $20 million for law enforcement, and House Bill 2144, which would entice cities and counties to allow marijuana businesses by giving them 30 percent of the state’s excise tax on retail pot sales.

Then there’s the issue of medical marijuana (MMJ). Patients don’t want to be lumped in the same category as recreational users. They are protesting the high taxes, saying they shouldn’t be included, since other prescription drugs are tax exempt. The House approved House Bill 2149, that would abolish unregulated medical marijuana dispensaries, a.k.a. “collective gardens,” and make patients buy their cannabis from the same stores that serve recreational customers. The measure may not be popular with some patients, but it demonstrates the Legislature’s struggle to address the issue while establishing some uniformity.

I opposed I-502 because, as a former prosecutor, I witnessed the societal effects of marijuana on our communities. It is now law and we must respect the voters. Yet, I wonder whether the benefits will eventually outweigh the problems we may have stepped into. Time will tell. The Legislature is scheduled to adjourn March 13, but the questions and challenges remain. Moving forward, I welcome your thoughts and input as we navigate this very complicated journey.

Editor’s note: Rep. Terry Nealey, R-Dayton, represents the 16th Legislative District and is a former prosecuting attorney for Columbia County. Nealey serves as ranking Republican on the House Finance Committee. He is also a member of the House Judiciary Committee and serves as the House Republican representative on the Washington State Economic and Revenue Forecast Council. He can be reached through his website at www.representativeterrynealey.com.

State Representative Terry Nealey, 16th Legislative District
404 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
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