After legalizing marijuana, Washington and Colorado are starting to regulate it

October 9, 2013

An employee of Good Meds medical cannabis center in Lakewood, Colo., handles a jar of pot. (Matthew Staver/The Washington Post)

Nearly a year ago, Washington and Colorado legalized recreational marijuana sales. Now it’s time to regulate them.

The two states have taken slightly different approaches to the rules. Washington’s are slightly more restrictive. There will be limits on the number of sellers’ licenses available there, keeping plants for personal use is not allowed and advertising is restricted to 1,600 square inches (about a meter squared). Colorado, on the other hand, has already begun accepting licenses without a cap, cultivation for personal use is allowed and stores could open as soon as January. Much of the state regulations are set, but the regulatory fight rages on at the local level.

“It’s really kind of become a series of local battles to kind of decide what the path forward is,” says Brian Vicente, a lawyer who helped to write and promote Colorado’s law.

Among Colorado’s 10 largest counties, four have moved toward legalizing non-medical marijuana sales and three have voted to ban it. In all, the nonprofit Marijuana Policy Project has counted more than 60 local governments there opposed to recreational sales and more than 40 that have moved to allow them. Dozens have also imposed moratoriums, says Mason Tvert, communications director for the MPP.

“There’s also a lot of localities that are holding off or just kind of delaying what they want to do because they want to see how things go,” he says.

The same is true in Washington. The Yakima City Council passed a six-month moratorium Tuesday  to give staff time to review and prepare to implement the law, according to local reports. Columbia County, Walla Walla County and the city of Pullman have all imposed similar temporary stays in the past few weeks. But other cities are forging ahead. On Monday, for example, Seattle passed zoning rules setting limits on the size and location of stores selling recreational pot.

Washington won’t accept licenses until Nov. 18. And the number of stores will be capped at 334 statewide, with per-county caps based on population. The King County cap is largest, at 61, followed by Snohomish County’s 35-store cap and Pierce County’s 31-store cap. Official estimates put the total revenue haul at close to $300 million for fiscal 2014  and nearly $2 billion by the end of fiscal 2017.

Colorado, on the other hand, began accepting license applications for recreational sales Oct. 1 from existing medical dispensaries in good standing. Others interested will have to wait until next summer to apply.

“That’s something we actually wrote specifically into amendment 64,” Vicente says. Medical dispensaries have proven their ability to abide by regulations, he said. “These are businesses that have been through the state system.”

But one key part of the state’s marijuana policy has yet to be determined: how to tax it. A November referendum should resolve that. If approved, the state would impose two taxes: a 15 percent wholesale tax when the product is first sold or transferred and a 10 percent sales tax on retail products. Proposals to legalize and tax marijuana in other states range from 15 percent in New Hampshire to 25 percent in Nevada.

The pair of taxes is estimated to increase annual state revenue by $67 million. The first $40 million raised by the wholesale tax would go to public school construction. Of the smaller sales tax, cities and counties would receive a 15 percent cut. A spring Public Policy Polling survey, commissioned by the MPP, showed support for the dual pot taxes at 77 percent.

Aside from the taxes and local regulations, many regulations governing sales, licensing and advertising in Colorado and Washington have been set. Licenses in Colorado could go into effect as soon as Dec. 30.

CORRECTION: An earlier version of this story misstated the estimate revenue from the proposed Colorado marijuana taxes. They are expected to increase annual state revenue by $67 million.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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