A crash in Seattle resulted from a chase that started in Snohomish County after the robbery of a marijuana retail store last month. Robberies at retail cannabis stories have surged in recent months, bringing calls for harsher penalties but also the ability for the marijuana industry to use banking services. (Snohomish County Sheriff’s Office)

A crash in Seattle resulted from a chase that started in Snohomish County after the robbery of a marijuana retail store last month. Robberies at retail cannabis stories have surged in recent months, bringing calls for harsher penalties but also the ability for the marijuana industry to use banking services. (Snohomish County Sheriff’s Office)

Editorial: Legislature, Congress must update cannabis rules

Ten years after state voters legalized marijuana, the industry and public need more protection.

By The Herald Editorial Board

In the nearly 10 years since Washington state voters passed Initiative 502 — legalizing the possession, production and sale of recreational marijuana to adults — the state’s cannabis industry has grown. As of 2020, the industry employs 18,360 workers, paying total wages of more than $867.5 million, and for that year generated nearly $661 million in tax revenue for state and local governments, according to a recent economic impact analysis for the Washington CannaBusiness Association.

That growth has also prompted the need for changes in how a growing industry does business and how it is regulated. At the same time, said Aaron Pickus, a spokesman for the business association, the legalization of recreational and medical marijuana in a majority of states, has led to innovation in both marijuana and hemp products.

Cannabis, Pickus said, “isn’t taking on aviation or apples” as a leading industry in the state, but it will need to compete with the industry now thriving in other states.

Even as the state Legislature’s work begins to draw to its March 10 close, lawmakers have legislation before them that would begin to address some of those needs.

Innovation arising from the production of marijuana and hemp in recent years has brought new and perhaps unanticipated products onto the marketplace, such as CBD, but also a range of cannabinoids that contain THC — the main psychoactive compound in marijuana — some of which have escaped the state’s regulation and are available online and outside of legal retail cannabis shops, such as in convenience and vape stores.

Companion bills, House Bill 2123 and Senate Bill 5981, seek to bar the sales of these new products containing THC. Each would also fund a grant program to aid in enforcement at the county level and convene a panel of scientists to consider recommendations on the new products and whether they could be offered in the state’s regulated retail stores.

Another, Senate Bill 5927, in response to a rash of robberies at retail marijuana businesses in the state, would stiffen sentences for those found guilty of first- or second-degree robbery involving a marijuana business, adding 12 months to existing sentences.

And Senate Bill 5671 would have sought to modernize the state Liquor and Cannabis Board by adding two additional voting members and four former state lawmakers who would be nonvoting members to the current three-member board. That bill failed to advance, but there is support among lawmakers to convene a panel for further discussion regarding the LCB and ways to improve its responsiveness.

There’s general and bipartisan support for these measures, Pickus said, but in a short 60-day session nearing its end, time is short to get these and other legislative priorities done.

Outside of the Legislature, Pickus said, the LCB is expected to adopt rules this month on testing marijuana products for pesticides. A similar process for testing for heavy metals is expected to follow.

At the same time in Congress, the House for a sixth time adopted provisions of the SAFE Banking Act, including it in other legislation aimed at increasing America’s competitiveness with China and encouraging semiconductor manufacturing and research in the United States.

The SAFE act would allow U.S. banks and credit unions to provide financial services to the cannabis industry, in states where its production and sale is legal. Currently, providing banking services to the cannabis industry is prohibited under federal law, even in states where marijuana is legal.

But that prohibition leaves a legal and legitimate industry in Washington and several other states, to do business on a cash-only basis. In the case of retail shops, the presence of that much cash has left those businesses a tempting target for crime, and reports of robberies and thefts — most of them armed robberies — are increasing across the state.

A Seattle-based cannabis retailer, whose own shop has been robbed, has started tracking robberies at retail marijuana shops across the state on a publicly available spreadsheet, finding 154 robberies since 2017, but more than 50 just in 2022’s first two months.

In Snohomish County, last month, two men robbed a cannabis shop near Lynnwood at gunpoint, but left without money — after firing a shot into the ceiling — because the employee didn’t have access to the shop’s safe. One suspect was arrested. And in January, an Everett shop was robbed at gunpoint twice in a matter of weeks.

The rash of robberies has prompted the state’s Liquor and Cannabis Board to call on Congress to pass the SAFE Act.

“The root of the problem is that retailers are a cash-only business because Congress has not acted to allow credit and debit card transactions,” LCB spokesperson Brian Smith told the MJBizDaily.

The SAFE act would allow the use of credit and debit cards at retail locations, the use of checking and savings accounts, access to credit and loans and employee payroll services. This would also provide relief to those businesses that provide goods and services to those in the marijuana industry.

While the House has passed the legislation six times, the banking reforms have been held up in the Senate each time, from both sides of the legalized marijuana debate.

Senate Minority Leader Mitch McConnell, R-Ky., recently objected to the banking reforms’ inclusion in the competitiveness bill, alleging that the House majority only wanted to “help Americans get high.”

Yet, on the other side, Senate Democrats, including Senate Majority Leader Chuck Schumer, D-New York and Sens. Ron Wyden, D-Ore., and Cory Booker, D-N.J., have opposed the banking bill, favoring broader legislation that would remove cannabis from the federal list of controlled substances and lift restrictions for those using marijuana in states where it is legal from federal services, including public housing.

While broader legislation is necessary — removing marijuana from the controlled substances list, for example, would ease restrictions on scientific research into cannabis’ medical uses — it seems unlikely that broader federal legislation is anywhere close to passage with a closely divided Senate and a minority leader whose views on marijuana haven’t advanced past the era of “Reefer Madness.”

With a rash of robberies, public safety requires more immediate changes that would make the industry — from growers to distributors to retail sales — less attractive to criminals, including both use of banking services and harsher penalties for those preying on legitimate businesses.

And recognizing that federal legislation to legalize marijuana is likely to become a reality at some point in the future, the state’s cannabis industry, its regulators and lawmakers need to plan for that future with reforms that prepare for federal legalization and the opportunities for growth that will provide.

The cannabis industry may never rival Washington’s industries for apples or aerospace, but 10 years after voters determined to make marijuana legal in the state, work remains to ensure recreational marijuana can remain a safe and thriving business for all, whether they use cannabis or not.

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