The Fight For Medical Marijuana
Every state has its own exceptional canna-people, people active in staying informed and trying to change the law for the better, for the patients and for the people, one such person here in Washington State is John Kingsbury. I’ve long respected his opinion and asked him to write an article on recent events here in Washington State and the fight for what was once medical:
During March 2015, while commenting on negotiations surrounding the so-called Cannabis Patient Protection Act, the Washington State bill designed to “merge” the medical and recreational markets, John Davis, co-manager of the gray-market cannabis collective Northwest Patient Resource Center (NWPRC), made the following statement, “From what it [the proposed legislative bill] started, man, I couldn’t have hoped that we would get better.” “It really sets us up for the future”. Davis, along with a number of other owners of Seattle-area collectives, was bullish on his future. They were predicting that the regulation of medical and the merging of the markets would include them, while their competitors would be left out. But on Friday, November 18, a Thurston County Superior Court judge reaffirmed what the Washington State Liquor and Cannabis Board (WSLCB) had already told them in January 2016 – they had guessed wrong; the future of the market would not include them. The judge’s ruling was in response to a lawsuit filed against the Liquor and Cannabis Board by Davis and seven other disappointed applicants who had failed to secure one of the new licenses allotted by the State. The litigants included: John Davis of the Puget Sound Group, Joshua Berman of PDA Lounge, Kenneth Adams of the Cannabis Care Collective, Sam Sadis and Phil Dawdy of Cloner’s Market, Greg Adrianse of New Millenium, Kirk Edwards of KF Industries, and Patrick Seifert of Rainier Xpress.
By April 2015, the final version of the so-called Cannabis Patient’s Protection Act (CPPA) mandated that gray-market collectives would be closed by July 2016. In order to replace the hole in supply left by the closing of those collectives, the Liquor and Cannabis Board (LCB) was required to estimate the number of new stores that would be needed to serve the anticipated influx of medical cannabis patients into the regulated system. The CPPA directed the LCB to establish a merit-based system by which it should prioritize the new applicants in the awards process for the limited number of new licenses. Having been well-established in the medical market, many of the Puget Sound collective owners felt entitled to some of those new slots, and when the State began receiving new applications on October 12, 2015, a few were first in line to submit their applications. By December, however, many of those applicants who had acted as cheerleaders for the CPPA in March discovered they had not made the cut, and had been told by the LCB that the new license quotas had already been filled. Their cheerleading for the Act had been a business miscalculation.
The reasons the plaintiffs’ failed to acquire slots in the new merged market differed by their circumstances; But, on January 29, 2016 they banded together to file a lawsuit against the Liquor Control Board, alleging a flawed process and a failure by the LCB to adhere to the requirements of the so-called Cannabis Patients Protection Act. The lawsuit alleged six different failures by the Board in the implementation of new system. In the end, the judge narrowed the issues down to two: Did the Board Act arbitrarily and capriciously a fail to follow proper rule-making procedure by setting the number of new slots at 222 (for a total of 556 stores total state wide)? And, did the Liquor and Cannabis Board fail to properly follow a merit-based application system, resulting in the improper denial of licenses to the aggrieved applicants?
On Friday, November 18, the judge said “no” to both questions. The judge stated that the case was essentially an Administrative Procedures Act case, and decided that the LCB had followed a reasonable process in determining the number of new slots available, and in establishing the rules by which it determined who qualified and what a merit-based system should look like.
The plaintiffs’ first objection to the process was that the numbers of new licenses allotted were flawed, and that the LCB had failed to follow proper rule-making procedure in deciding that number. The new license cap had been set by recommendation of BOTEC, who had been contracted to estimate the appropriate number, and this alone, the judge ruled, was an adequate basis for setting a license cap. The plaintiffs’ attorney argued that, because of the alleged flaws, the cap should be “opened-up”, or at least the judge should rule that the plaintiffs had been unfairly locked-out and they asked that the judge order that the plaintiffs be awarded licenses regardless of the cap. Opening up the process seemed like a strange request from a group who included some who had lobbied the city of Seattle to maintain a very small allotment as late as October 2015, before the plaintiffs knew that the new market place would not include spaces for them. In the end, the judge decided that establishing the new license cap number did not qualify as a “significant rule’, so following a broader rule-making procedure was not required by the law.
The applicants’ second argument, that the Board did not follow the merit-based system mandated by the Cannabis Patient Protection act, nor by the Board’s own rules under WAC 314-55-020(3), was based on the primary complaint that, by permitting applicants to cobble together organizations in a manner designed to meet the requirements of priority one status, the end result was Frankenstein entities that were often inexperienced, less-qualified entities than the plaintiffs themselves. The plaintiffs’ position was that, since, in most cases, the plaintiffs had previous, well-established experience in serving the medical market that the new licenses were intended to serve; their applications demonstrated more merit above the often cobbled-together organizations that had received many of the new slots. Furthermore, the plaintiffs ‘attorney argued, since the complainants were eventually qualified as priority one, their qualifications as medical collectives should have qualified them early before the other, less-qualified applicants had been awarded all of the available slots.
An examination of the applications showed, however, that the accuracy of each plaintiff’s “priority one” status at the beginning of the process was not entirely true. Since the plaintiffs’ individual situations were different in each case, the legitimacy of their claims about qualifications also varied. In the end, however, the judge ruled that the LCB’s interpretation of the merit-based system was appropriate. And she agreed with the State that the plaintiffs were actually requesting extraordinary treatment by insisting that their previous status as medical cannabis collectives should have necessarily pushed them to the front of the line. The judge denied their request to award them licenses, or to repeal the rules related to the license application process.
Will the plaintiff’s appeal to a higher court? “We will need to go back and decide what we want to do now”, said Spencer Palace, attorney for the plaintiffs. The plaintiffs have thirty days to file an appeal.