Washington state's I-502 and Oregon's Measure 91 legalized possession of certain amounts of cannabis, as well as production, processing and sales by licensed and regulated businesses. But if the voting results from the Walla Walla region are any indication, the majority of area residents are not in favor of cannabis growing or sales.
Although Washington's I-502 passed statewide (55.7-44.3 percent), the citizens of Walla Walla County rejected it (44.96-55.04 percent), as did residents of Columbia County (45.68 -54.32 percent).
In Oregon, Measure 91 passed (56.1-43.9 percent) despite Umatilla County's ballot-box beatdown of the progressive policy (37.2-62.8 percent).
With local reticence outweighed by statewide approval, the Washington state Liquor and Cannabis Board allotted two retail locations to Walla Walla County; one to Columbia County; and two to the city of Walla Walla (with a third proposed).
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But municipalities in Washington and Oregon subsequently were granted the privilege of banning retail, production and processing operations. Local-level governments throughout Washington, when deciding whether to approve cannabis business, have generally acceded to the majority viewpoint of their populace.
On the municipal level in the area, cannabis production, processing and retail sales are:
• Walla Walla: Allowed as conditional uses as of Oct. 22, 2014.
• College Place: Prohibited as of Sept. 8, 2014.
• Waitsburg: Allowed in Industrial Zones.
• Dayton: Prohibited as of July 2014.
• Prescott: Ordinance allows Copperhead Farm to produce cannabis, according to the city clerk-treasurer.
• Milton-Freewater, Ore.: Prohibited as of December 2015. But a measure on the ballot for Nov. 8 will ask voters: "Shall Ordinance 975, banning certain marijuana business activities, be approved and continue in force?," reported the Walla Walla Union-Bulletin. Milton-Freewater residents thus will have a direct say in whether their South-valley burg will be known as green-friendly.
• Pendleton, Ore.: Prohibited. But as in Milton-Freewater, an approval measure on the ballot in November will ask voters whether to allow recreational cananbis sales and whether to repeal the city's prohibition of medical cannabis producers and dispensaries. Voters also will be asked whether to assess a 3 percent tax on any subsequent revenue. Both medical and recreational cannabis must be approved for the city to collect tax revenue, including its portion of Oregon's 17 percent cannabis tax, reported the East Oregonian.
In unincorporated parts of area counties:
• Walla Walla County: Prohibited as of Nov. 17, 2014.
• Columbia County: Allowed by ordinance: production in Agricultural Zones (A-1, A-2 and A-3); processing as conditional use in Heavy and Light Industrial Zones; and retail as a conditional use in Commercial Zones.
• Umatilla County: Prohibited as of Aug. 5, 2015.
Washington state-licensed producers/processors
Licensed producers are authorized to produce cannabis for sale only to licensed wholesale processors or licensed retail stores. Processors are allowed to process, package and label cannabis concentrates, usable cannabis and cannabis-infused products for sale at wholesale to retailers or other licensed processors.
Under state guidelines, cannabis producers are sorted by tier, depending on the operation's overall square footage of dedicated plant canopy.
• Tier 1: 2,000 square feet or less
• Tier 2: 2,000-10,000 square feet
• Tier 3: 10,000-30,000 square feet
As of mid-July, there were six actively licensed producers/processors in towns in Walla Walla County — one each in Prescott, and Waitsburg, and two each in Walla Walla and unincorporated Touchet — and a handful of other county businesses and partnerships had pending producer or processor licenses.
The producers in Touchet, and LaGranja Farms near Waitsburg, are in the discordant position of being actively licensed by the state, but being located in unincorporated areas of a county (Walla Walla) that first put a moratorium on such operations then banned them outright. Indeed, since the summer of 2015, LaGranja's operators have battled the county in various courts, in a thus-far-unsuccessful bid to legitimize the business the state Liquor and Cannabis Board authorized them to run.
After initially operating under a three-tier tax structure, cannabis in Washington state now is levied a flat 37 percent excise tax at the retail level, paid monthly by the retailer to the LCB. Local sales and use taxes also apply to retail cannabis sold in the state.
Beginning in fiscal year 2018, if total excise taxes paid in 2017 are greater than $25 million, the state must give 30 percent of the taxes (on a per-capita basis) to the counties, cities and towns where no ban or moratorium is in place and where licensed retailers are located. Retailers also are responsible for paying federal taxes; ironically, cannabis remains illegal as far as the federal government is concerned.
Producers are not considered farmers under state law, and must pay retail sales tax on all the equipment, plants and supplies used in their operations. And since cannabis is not considered an agricultural product, producers also must pay business-and-occupation tax on any cannabis they sell to processors or other producers. Producers are allowed to sell cannabis plants to cooperatives that register through the LCB. These sales, as well, are subject to B&O and retail-sales taxes. As cannabis is federally illegal, the usual tax deductions do not apply to any cannabis-related businesses.
Washington state-licensed 502 retailers
Across Washington state, recreational cannabis retailers report sales on an upward swing, dipping only two months since July 2014. The state now reaps over $20 million in taxes from cannabis sales each month, according to regularly updated data available online at 502data.com.
The Walla Walla Cannabis Company, which opened in September 2015, and the Walla Walla Weedery, which started selling in November 2015, have followed suit, generally doing increasingly brisk business.
The Cannabis Company started out strong, with over $240,000 in sales in its first two months combined, but lost its short-lived monopoly on the market when the Weedery opened. Nonetheless, the town's original retailer has done over $1.2 million in business overall, posting steady sales gains each month since February, and in June cleared $157,000 in sales. The Weedery has taken in nearly $2 million overall, and has sold more than $300,000 in products in each of the last three months.
In Oregon, retail recreational cannabis stores are not yet open, but are likely to start operating in the final quarter of 2016, according to the state's official website. However, some existing medical-cannabis dispensaries are participating in early start recreational sales, which allows them to sell limited amounts of recreational cannabis until Dec. 31. Also at dispensaries, sales of cannabis-infused edibles (formerly available in the state only to medical-cannabis patients) began June 2.
The Oregon dispensaries closest to the Walla Walla Valley are in Huntington, near the Idaho border, and Hood River, along the Columbia River Gorge between here and Portland. But thankfully for area cannabis users, legal production and sales are in full swing in Washington — although it's illegal to transport cannabis purchased in one state to another state.