Liquor & marijuana discussed by WA House Government Accountability & Oversight Committee

The Washington House Government Accountability & Oversight Committee met today and discussed liquor and marijuana issues.

Liquor
Representative Hurst opened the meeting stating that prior to the adoption of Initiative 1183, state-run liquor stores had very low rates of liquor "loss" (theft).  He noted that, right now, many private stores that sell liquor  are reporting very high loss rates.  The problem is worst along the Interstate 5 corridor and is mostly related to organized crime.  Rep. Hurst went on to say that if this loss problem isn't addressed before January that the legislature will have to take action.

Jim Cooper from WASAVP and Thurston County Together! provided testimony.

• There has been a 5-fold increase in liquor outlets in our state since the adoption of I-1183.  
• He suggested that the Committee consider mandating retail models that prevent liquor thefts.  
• He stated that a mandatory Responsible Vendor Program should be established.  
• Money is needed at the local level to enforce laws related to alcohol and address related problems -- promised funds have not been realized by local jurisdictions.  
• Finally, he noted that new data about the effect of liquor privatization on youth are soon to be released.  He asked that the Committee not make changes to the system until they review data dealing with youth use, hospitalization, and theft.

Rick Garza from the Liquor Control Board reported that a recent news article reports that the Port Angeles area has seen a significant increase in youth theft of liquor within the last year.  Liquor theft is not just an I-5 corridor and organized crime problem.

Marijuana
Mr. Garza noted that, among many sources of information, the Liquor Control Board looked at the Colorado medical marijuana model, which is highly regulated, when thinking about what the WA recreational marijuana model should look like.  In CO, about 50% of medical marijuana retailers failed within the first few years.  When asked why so many marijuana businesses failed, Randy Simmons from the LCB said that, among other reasons, many of the CO medical marijuana dispensaries were too small to survive.  Market forces favored larger businesses.

When discussing marijuana retail outlets, Mr. Garza noted that the number of proposed outlets is similar to the number of liquor stores prior to I-1183.  For example, prior to I-1183 King County had 60 liquor stores and the LCB plans to license 61 marijuana stores in the county.

Some Committee members expressed concerns about whether the number of stores will be able to meet market demand.  Mr. Garza stated that 24% of the current marijuana market is people who are under the age of 21 and that the LCB's plans for marijuana retailers do not include serving this part of the market.

The LCB plans to spend time in all marijuana businesses to gain compliance with I-502 rules.  It was suggested that it will be up to local law enforcement to address other related problems.

Concerns expressed by Committee members included:

• targeting youth in advertising;
• banking;
• large amounts of cash in businesses and the possibility of armed robberies;
• firearms on premises of marijuana businesses;
• not enough information about prevention, education, and treatment; 
• marijuana business interests expecting that they can change the initiative  in two years;
• the development of Big Marijuana;
• who will get business licenses.

Jim Cooper testified that:

• The alcohol and tobacco systems do a poor job keeping the substances out of the hands of kids.  
• Prevention, intervention, and treatment services and programs have been decimated by the economy.  
• The success of I-502 should be declared only if not one more kid starts using marijuana.  
• Prevention and education funding needs to be put in place now.  
• A ban on commercial advertising of marijuana should be put in place.  
• Public smoking laws need to be enforced.
• The medical marijuana law should be repealed or medical marijuana should only be available through pharmacies.   

Medical marijuana & recreational marijuana systems
Rep. Hurst expressed skepticism about the medical marijuana market and its ability to function with I-502 in place.  While some people may be accessing medical marijuana for health reasons, the vast majority use it for recreational purposes.  

When working on the Legislature's budget proviso about the medical and recreational marijuana systems, Rick Garza reported that the Department of Health will deal with health-related items, including age requirements, while the Liquor Control Board will deal with the business side of things.

A representative from the Washington State Department of Health noted that there is "not much" regulation of medical marijuana in our state.  She also reported:

• "Intractable pain" is the most common reason for medical marijuana authorizations in Washington.  
• None of the dispensaries today are legal under state and federal law.  
• The DOH has no regulatory ability to shut down illegal dispensaries.  The Department or Revenue, the Liquor Control Board, and the federal government do have the authority.  

Rep. Condatta asked that the DOH address prescription drug abuse as well as marijuana abuse.  The DOH representative listed several initiatives they have implemented to address the issue.

The representative from Department of Revenue closed the meeting stating that they have not taken any targeted action against medical marijuana businesses but are gearing up for actions in the future.