Bellingham attorney discusses marijuana business law

Bellingham attorney Heather Wolf didn’t plan to get into marijuana law. She practices land use and zoning law, and last year clients started asking her about where they could open retail marijuana stores.

Wolf, who has been an attorney since 1997, got involved with Whatcom County’s adoption of zoning laws on behalf on her clients, and used her zoning expertise to help clients figure out where they could legally locate marijuana businesses. Since then, marijuana business law has become more than half of her practice at Brownlee Evans Wolf & Lee.

BBJ: What interests you about marijuana business law?
It’s fascinating. It’s a brand new world. We’re all trying to work through this brand new legislation, which has problems. And it’s complicated–every jurisdiction in Whatcom County has its own set of regulations for these businesses.

BBJ: Who are your clients now?
It has really evolved. I do a lot of transactional business work now. There has been a great need for that in doing leases and contracts between the owners of these businesses, and also with people who are financing these operations.

I represent a lot of folks in the process of getting producer/processor licenses, some of whom actually have gotten licenses. I also represent retailers who have gotten licenses in Whatcom County. And I do represent landlords who are leasing property to marijuana businesses, although that’s a smaller part of my practice. I represent a lot more applicants for licenses than landlords.

BBJ: Where are your clients? How big of an area?
Whatcom County. I don’t represent anyone in San Juan or Skagit Counties but I’ve gotten inquiries.

BBJ: What do you think of the ruling in Fife in September that said local governments can ban marijuana businesses through their zoning laws?
I didn’t necessarily agree with that ruling but I wasn’t surprised by it. I’m hoping that the Legislature will still take action on that. I think they could clarify that local jurisdictions can not prohibit these businesses. I think they could also throw a carrot to the local jurisdictions who allow marijuana businesses by allocating some of the tax revenue to them.

There’s a lot of fear around marijuana businesses. No one has really seen them before. So, these businesses are very careful and compliant. Once there’s a track record of these facilities running and not causing any problems, I think some of that fear will go away.

BBJ: Does the Fife ruling change things for local businesses?
In Bellingham it’s not an issue because they have a clear ordinance that says where businesses can locate. Ferndale is complicated because they allow businesses in certain zones but they put a moratorium on new businesses, so I don’t know how that is going to pan out. (Editors note: Since the interview, Ferndale’s City Council voted to end the city’s temporary ban on new marijuana businesses.)

BBJ: Do you think regional moratoriums undermine the initiative?
Absolutely. One of the stated purposes of the initiative was to get rid of the black market. How do you create a viable legal market when you have so many jurisdictions prohibiting these businesses? Marijuana is not going to go away. I think that situation needs to be resolved.

BBJ: Is marijuana business law a big part of your practice?
Currently it’s maybe 60 percent of my practice. We’ll see if that continues to be the case once these folks are up and running. It’s like any other startup business–in the beginning you tend to need a lot of assistance to comply with the regulations.

BBJ: What are some of the biggest challenges for marijuana businesses?
Banking is a huge challenge. Banks in the state aren’t even opening bank accounts for these folks. I’m hoping that some banks are going to start taking accounts. It’s just a huge issue from a practical and security perspective. These ever-changing laws of the local jurisdictions are a big hurdle.

BBJ: What changes to marijuana law do you anticipate in the next few years?
I anticipate that it’s going to be legal throughout the country. Maybe not next year, but eventually. My guess is that not much is going to happen on the federal level. If that’s the case, and each state has slightly different laws, it may limit the ability for folks to do any sort of cross-state investment.

There’s a residency requirement for financiers in Washington. So anyone who provides any money to a marijuana business has to be a Washington resident. That’s a big issue because there’s no commercial lending so far. You have to be either highly capitalized yourself, meaning that you’re a Microsoft millionaire, or you have to have a pool of people in Washington who you can borrow money from. Everyone involved has to live in the state and their spouses have to live in the state.

Say marijuana is legalized in California and Oregon, but if nothing changes on the federal level there’s still not going to be any interstate commerce. Businesses are still going to have this issue where they have to do financing in the state. A lot of our business work is dealing with these private lending and investing issues.

BBJ:: Why do you think all the states will legalize marijuana before the federal government does?
It seems like there’s just gridlock on the federal level. They would have to change the Controlled Substances Act and I think they’d need some bipartisan cooperation to do that. It just doesn’t seem reasonable now.


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