SEATTLE MOVING TOWARD RULES FOR MEDICAL-MARIJUANA SHOPS

Seattle is taking the first steps toward regulating medical-marijuana
dispensaries, putting itself on an increasingly lonely pot-friendly
island as other Puget Sound cities move toward outright bans.

On Wednesday, the Seattle City Council will consider whether to
require that medical-marijuana operations get a city business license
and comply with city land-use, fire-safety and other rules.

It is a baby step, but if passed, it would be the furthest any city in
Washington has gone to bring the booming medical-marijuana industry
out of the shadows and into the business mainstream.

Seattle officials, including City Attorney Pete Holmes, have debated
going further, including clustering medical-marijuana grows in
specific land-use zones.

But Holmes - as well as attorneys for marijuana operations - say full
regulation raises the risk of intervention by federal authorities.

"This is a tolerant city, and I don't see that changing. But we'd be
doing our citizens a disservice if we ignore the federal prohibition"
of marijuana, said Holmes.

The proposal comes as the state's 13-year-old, voter-approved medical-
marijuana law is dramatically changing on July 22, due to Gov. Chris
Gregoire's partial veto in May of a proposed landmark bill that would
have legalized and regulated dispensaries and grow farms.

Her veto made dispensaries, which have boomed throughout the state in
the past two years, clearly illegal. But she also authorized new 45-
plant "collective gardens" for up to 10 patients at a time, clearly
establishing for the first time a right for patients to band together
in growing collectives.

As a result, dispensaries appear to be eager to shift, in business
model and in name, into collective garden co-ops.

At a packed meeting at the Cannabis Defense Coalition's Sodo
headquarters last month, Seattle defense attorney Aaron Pelley told
the gathered dispensary owners and marijuana growers how that could
happen. The new law suggests that, by rotating several of the 10
patient memberships in each garden, medical-marijuana operations would
be able to have large customer bases, Pelley said.

"I don't see anything in the law that says you can't," he said to the
crowd of about 80 people. Pelley warned the crowd that lewd, explicit
ads featured in alternative weeklies "make you a target," and no
business model was a hedge from federal prosecution.

The crowd buzzed as the concept began sinking in. After the meeting, a
business attorney also attending was flooded with inquiries.

The potential for a forest of new collective garden co-ops, combined
with Seattle's go-it-alone approach, means that storefront marijuana
distributors are likely here to stay. Currently, 51 dispensaries have
Seattle business licenses, with at least a dozen more that are
underground, according to city staff.

King County Prosecutor Dan Satterberg agrees that collective gardens
offer a viable, legal model and are "the clearest legal protection"
medical-marijuana distributors have had, said Ian Goodhew,
Satterberg's lead attorney on the issue.

He warned that cooperatives that exploit the law - such as by
launching huge grow operations under a single roof - could still draw
prosecutors' attention, and that Satterberg has been frustrated by bad
actors exploiting the state law to make lots of quick cash.

"The Legislature has authorized medical-marijuana patients to grow
collectively. They should use it and comply with standards in the new
statute," said Goodhew. "That way law enforcement and prosecutors stay
out of regulating the use of people's medicine."

Cities forced to act

After Gregoire's veto forced municipalities to act, most regional
cities took the opposite approach to Seattle by banning or halting new
medical-marijuana operations.

In the past month alone, Issaquah, North Bend, Snohomish and Kent
passed moratoriums, joining a long list that includes Shoreline,
Federal Way, Edmonds and others that cracked down.

In Kent, police served search warrants, seizing patient records and
marijuana, at four dispensaries less than 24 hours after the City
Council passed an emergency moratorium last week. Jay Berneburg, an
attorney for several Kent dispensaries, said such "heavy-handed"
actions are likely to cluster marijuana business "in civilized cities
like Seattle and Tacoma."

"Political support is clearly on the side of medical marijuana, not on
the drug warriors," he said.

Federal prosecutors have taken an increasingly belligerent approach in
the 15 states that authorize medical marijuana. A June 29 memo from
the Justice Department reiterated that local U.S. Attorneys have
discretion to press cases in their jurisdictions, and that "state laws
or local ordinances are not a defense to civil or criminal enforcement
of federal law."

Although Seattle, if it passes the ordinance, would be an outlier in
Washington, it would join dozens of cities nationwide that regulate
marijuana dispensers. In California alone, 42 cities have ordinances,
while nearly 250 have moratoriums or bans, according to Americans for
Safe Access, a medical-marijuana advocacy group.

"Many localities have [passed ordinances] where state laws don't
regulate the activity," said Kris Hermes, a spokesman for the group.
"It's been left to municipalities to pick up the slack."

Seattle, nonetheless, is treading lightly with the new proposed
ordinance. City Councilmember Sally Clark said the city sought "to
keep ourselves clean from federal intervention."

She said that requiring medical-marijuana dispensaries or cooperatives
to follow city codes - complying with fire or construction rules - is
a matter of safety.

"I don't think city workers who are checking off electrical use
permits or checking on change of use permits are at risk" of federal
prosecution," she said.

The specter of public employees facing federal prosecution for
enforcing medical-marijuana regulations was raised by Gregoire in her
veto. The U.S. Attorneys in Seattle and Spokane, in a letter sent just
before the veto, said state workers were not immune, criminally or
civilly.

But there is no record of state medical-marijuana regulators facing
federal prosecution, even in states with fully licensed dispensaries
and grow farms. Constitutional scholars and political analysts widely
describe it as extremely improbable.

Over the next several months, Seattle will consider further
regulation, including possible zoning restrictions that could channel
collective gardens - particularly larger-scale, multigarden operations
- - into commercial or industrial zones, Clark said. Staff was
researching current zoning rules for gardens, farms and pharmacies.

Oscar Velasco-Schmitz, founder of the Dockside Co-op, a medical-
marijuana dispensary in Fremont, said he welcomed Seattle's proposal
as a first step.

"It acknowledges that the citizens of Seattle have a need for medical
cannabis," he said, "and are looking for a safe way" to get it.

But Douglas Hiatt, a longtime marijuana defense attorney, said he'd
sue Seattle if it enacted the ordinance because it would force
cooperatives to acknowledge they were selling a drug still illegal
under federal law.

"You cannot regulate an illegal substance," said Hiatt. "It would be a
total admission of guilt and Exhibit 1 in a federal [criminal] case."