Sequim City Council extends moratorium on marijuana businesses in hopes of gaining portion of tax revenue

By Joe Smillie
Peninsula Daily News

SEQUIM –– There won't be any marijuana in Sequim until the city is assured a share of tax revenues from the infant legal pot market.

The City Council voted 4-1 Monday night to extend for another six months a ban on marijuana business that was instituted in February with hopes the state Legislature will provide municipal governments a portion of the excise taxes placed on marijuana growers and sellers.

“We need, we want, more tax money,” Mayor Candace Pratt said.

City Manager Steve Burkett said Initiative 502, the 2012 measure that legalized pot in Washington, intended that taxes be distributed to state and local governments.

“In the spirit of the law that was passed, we want more money,” Pratt said.

The state Liquor Control Board allowed Sequim one retail marijuana outlet.

As laid out in Initiative 502, half of the proceeds from marijuana taxes go to fund Washington's basic health plan trust, with another 30 percent funding other public health programs and 18.7 percent going to the general fund.

The state anticipates as much as $2 billion in tax revenue off marijuana.

Councilwoman Genaveve Starr, who said during the council meeting that she has smoked marijuana, cast the lone dissenting vote at Monday's meeting.

Council members Laura Dubois and Ken Hays were absent.

Sequim voters gave 52 percent approval to I-502, which passed in Clallam County by 55 percent and in neighboring Jefferson County by 65 percent.

“Your job is to represent us, the people who elected you and who did vote for this initiative,” said Judith Parker.

She was among the seven people who spoke during the public hearing. All asked for a repeal on the moratorium.

“This is the face of the 502 voters in Sequim,” said Susan Molin, 70, who said she uses medical marijuana.

“Who else would be able to afford the exorbitant prices anyway?” she asked.

Molin then asked marijuana users at the council meeting to raise their hands. About half of the 30 people present, including Starr, did.

Burkett said Washington's current medical marijuana system has been ruled illegal by multiple courts and said he felt the city should let other cities deal with the “unintended consequences” of recreational marijuana first.

“I don't see a whole lot of negative impacts to that,” he said.

“I think there is a downside,” countered Thomas Ash, a state licensed recreational marijuana grower from Dungeness.

“I think the suits that have followed other communities have shown this kind of approach can have its own problems.”

Burkett noted several times Monday that the moratorium was aimed at reform of the tax distribution and did not stem from fears of violating federal law.

State Attorney General Robert Ferguson last week announced the office will challenge a ban in the Pierce County city of Fife that prohibits marijuana because it is illegal under federal law.

When the council initially deliberated the moratorium, Councilmen Ted Miller and Erik Erichsen said they voted to ban pot because it is still illegal federally.

For David Halpern, whose Emanon Systems was drawn in the May lottery to operate Sequim's retail marijuana outlet, the moratorium means expenses.

He is continuing to remodel the site of his storefront at 755 W. Washington St., Suite C, to comply with liquor board requirements that his facility meet strict state security standards, regardless of the local ban.

“I have to be continuing my remodel in order to keep moving my license forward,” Halpern said.

“And this delay is costing me, but it's also costing them in sales taxes and construction taxes and employment.”

Halpern's attorney is considering his options, he said, which may include filing a suit against the city.

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Sequim-Dungeness Valley Editor Joe Smillie can be reached at 360-681-2390, ext. 5052, or at jsmillie@peninsuladailynews.com.

Last modified: August 12. 2014 7:43PM
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