HEARING IN OLYMPIA TO REVISIT HAZY MEDICAL-MARIJUANA LAW

Eight months after Gov. Chris Gregoire gutted the state
medical-marijuana law with a partial veto, dispensaries have feasted
or starved based on the real-estate axiom: location, location,
location. A new bill in Olympia to legalize nonprofit dispensers
could lead to a statewide dispensary boom.

Chris Cody tries to be a good neighbor in White Center, joining in a
Christmas toy drive and local art walks, and keeping the window of
his medical-marijuana dispensary as discreet as possible.

He maintains a low profile in part because his shop, Herban Legends,
is a block outside the marijuana-friendly Seattle city limits. Inside
Seattle, marijuana dispensaries flourish. Outside Seattle, there is
no protective regulation.

"It's definitely tricky, causing for more than a little anxiety,"
said Cody, a 31-year-old carpenter.

Eight months after Gov. Chris Gregoire gutted the state
medical-marijuana law with a partial veto, dispensaries have feasted
or starved based on the real-estate axiom: location, location, location.

Seattle, Tacoma and a handful of other cities recognize storefront
shops as resources for medical-marijuana patients. Most don't,
though, citing a muddled state law or the federal marijuana prohibition.

Legislators, still pained by the veto but pressed by cities to fix
the mess, are preparing to try again. A hearing is scheduled
Wednesday on SB 6265, a bill proposed by medical marijuana's champion
in Olympia, Sen. Jeanne Kohl-Welles, D-Seattle, to legalize nonprofit
dispensers and kick regulation to cities.

If passed, the plan could clear a legal haze hovering over storefront
shops. Although not explicitly allowed under state law, they have
operated via legal loopholes, most recently under a broad
interpretation of the term "collective garden."

And a new law could open the door to a statewide dispensary boom,
especially in some larger cities, such as Bellevue, that have refused
to allow them.

"I don't think it's fair that Seattle and Tacoma have people coming
from all over the place to purchase marijuana in their jurisdiction,"
Kohl-Welles said.

The bill sets off what is likely to be a big year for
marijuana-policy debates. Lawmakers are expected to send to voters in
November an initiative that would legalize and tax
recreational-marijuana sales.

Whether lawmakers have the stomach -- or the time -- to legalize
dispensaries is unclear in a session already crowded with a budget
deficit of roughly $1.5 billion and a gay-marriage proposal.

Police oppose dispensaries, and federal authorities recently raided some shops.

Cody, who has invested about $20,000 in Herban Legends, said he is
patient, if nervous. "We're still in this limbo," he said. "As time
goes on, more people will come on board. Things take awhile, and they should."

Shops as gardens

After Gregoire's partial veto of a 2001 bill that would have set up
statewide regulation of dispensaries, storefront shops gravitated to
perceived safe havens, particularly Seattle.

Sections of the bill that survived the veto authorized 45-plant
patient gardens. Those provisions were not intended to create
storefront dispensaries, but shops nonetheless reorganized as
networks of gardens.

Cities have made their own rules, many enacting moratoriums. Issaquah
requires a background check to obtain a regulatory license, and
Shoreline this month mandated buffer zones between dispensaries,
which are also called "collectives."

The legal uncertainty hasn't ended bigger dreams.

Bellevue real-estate broker Tom Gordon, who has helped 10
dispensaries find storefronts, said good commercial parcels can
attract inquiries from 40 to 60 people looking to open dispensaries.
Some are Californians or Coloradans who "tell you it's like the Wild
West out here, with less competition and a good taxing structure," Gordon said.

"I think we're only at 20-30 percent of capacity," Gordon said, "but
you can't find the sites," in part because few landlords are willing
to lease to dispensaries.

Storefront dispensaries began popping up at least 10 years after
Washington voters in 1998 authorized medical marijuana for qualified
patients. In November, federal authorities raided 10 shops, including
several in Seattle, accused some of using state law to hide money
laundering and, in one case, a backdoor sale of 5 pounds of pot going
to the Midwest.

Philip Dawdy of the Washington Alternative Medicine Alliance, a
medical-marijuana group, estimates about 135 dispensaries are open
now, half in Seattle. He said the new proposal in Olympia is needed
to end "a patchwork of regulations."

"Our goal is to have reasonably clear state law that is unambiguous
and won't lead to the feds making threats," Dawdy said.

The state Department of Revenue (DOR), which last year warned
dispensers they must tax their sales, said 15 marijuana-related
business paid a total of $243,600 in state and local taxes in the
first nine months of 2011, including $52,600 in local sales taxes.

That's nearly tenfold as much as the marijuana industry paid in 2010,
"but it is unlikely it represents all the taxable sales taking
place," DOR spokesman Mike Gowrylow said.

Resistance to registry

Although dispensaries say they intend to help those who need
marijuana, patients are likely to oppose the legislation Wednesday.

The new bill would guarantee arrest protection if patients join a
voluntary registry, an idea that is anathema to some. Those not
signed up would have lesser protection -- an "affirmative defense,"
if criminally charged.

"I don't understand why I need to register. It seems like a lot of
headache, paperwork and bureaucracy," said Ric Smith, a patient
advocate who is on kidney dialysis.

The registry is intended to mute law-enforcement opposition to
dispensaries. Police groups favor registries, and Kohl-Welles said a
registry was part of a deal to reach "the lowest common denominator
of support."

Cities have clamored for lawmakers to clarify dispensaries' status
after Gregoire's veto. The new plan would give cities in the nine
largest counties the ability to ban dispensaries and would give
cities in the 30 other, smaller counties the right to opt in.

While Bellevue is among communities that have denied licenses on the
basis that marijuana is illegal, the city "may support" the new bill
once the City Council sees it, city spokesman David Grant said.

Tacoma, at one point, had more dispensaries than pharmacies. The city
since has installed a moratorium, pending a review of its policy.

"I'm not sure you should be allowed to ban all citizen access to
something the citizens of Washington have said they want to allow,"
Tacoma lobbyist Randy Lewis said.

Gregoire's partial veto last year was based, she said, on a fear that
federal authorities could hold state employees liable for regulating
dispensaries. Executive policy adviser Jason McGill said the governor
finds "nothing objectionable" about the new bill because state
employees wouldn't be involved.

Even with Gregoire's support, the proposal's prospects are unclear.

Sen. Jerome Delvin, R-Richland, who co-sponsored this year's
dispensary bill, fears lawmakers may be too busy with the budget and
other issues.

"I think it falls behind some other pretty big policy discussions,"
said Delvin, a retired police officer.

If lawmakers act, though, expect more dispensaries. Jake George and
his wife, Lydia, a paralegal, opened GreenLink Collective in
Seattle's Sodo area after an expensive, six-month fight with Issaquah
to open there.

"From our experience, there are people who are curious and want to be
involved," said George, 32, a former electronics salesman. "If you
take the risk out, you'd see an influx."