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Back You are here: Home Features Legal Perspectives Washington Exploring the Shut Downs of the Two Biggest MMJ Cooperatives in Washington State

Exploring the Shut Downs of the Two Biggest MMJ Cooperatives in Washington State


The March 2012 shut-downs of several prominent Bellingham cooperatives have underscored the ambiguities that plague Washington’s relationship with the medical cannabis industry. Any conscientious grower or provider knows that legal compliance is paramount to his or her business operation. However, in an industry beleaguered by new and often unclear federal, state, and city regulations, it is extremely difficult to ensure absolute legal protection.

It would be misleading to describe the March 15th police raids as a complete shock. First of all, cannabis is simply illegal under federal law. Therefore anyone operating in the medical marijuana business, regardless of state provisions and regardless of scale, is at some level of legal risk. And although Washington’s Medical Cannabis Act (RCW 69.51) provides for the lawful distribution of medical cannabis, local governments’ actual conduct toward such businesses has been inconsistent.

For Starbuds Cooperative and Northern Cross Collective, the trouble began in November 2011, when the City of Bellingham revoked and denied the cooperatives’ business licenses. Northern Cross had its license revoked, while Starbuds’ application was denied from the outset. The City cited “illegal” operations and “public safety concerns” as its reasons for denying the cooperatives’ licenses.

Starbuds and Northern Cross acted quickly to appeal the City’s business license denials. In their appeals, the cooperatives asserted their legal validity and emphasized their social purpose: providing necessary medicine to the City’s qualifying patients. In return, Starbuds and Northern Cross received cease and desist letters from the Bellingham Police Department, demanding that they close their doors immediately. The cooperatives remained open, and, without their business licenses, were operating in violation of municipal code.

On March 15, 2012, the Bellingham Police executed search warrants against The Joint Cooperative, Starbuds Cooperative, and Northern Cross Collective, shutting down all three businesses, seizing inventory and arresting five individuals.

The police conducted their raids at 4:00 p.m. on the Thursday before a Whatcom County Superior Court furlough closure day. Had the raids taken place at nearly any other time, the cooperatives would have been able to immediately seek a Temporary Restraining Order to attempt to halt the police’s actions against them. Instead, they were forced to wait until the following Monday to take any defensive action against the shut-downs. On that Monday, with several of their employees still in jail, Starbuds and Northern Cross submitted their Temporary Restraining Order to the Court.

Though the cooperatives’ subsequent legal fight has not achieved the same regional attention as the notorious March 15th raids, the Bellingham conflict has continued in full force. The hearing on April 10th. On that day, however, Whatcom County Superior Court Judge Charles Snyder announced that he would be recusing himself from the case due to personal bias. Judge Snyder felt that his experience with drug court and his ethical views regarding medical marijuana would interfere with his ability to decide the matter impartially.

The case was then transferred to Judge Steven J. Mura. After hearing the parties’ oral arguments on April 12th, Judge Mura denied the Temporary Restraining Order, which would have prevented the City from shutting down the police-raided businesses. In explaining his decision, Mura cited the cooperatives’ failure to prove that they had suffered irreparable harm.

In the same order, the judge also stated that the cooperatives would be allowed to continue operating legally. On one hand, this statement acknowledges the cooperatives’ fundamental right to do business under RCW 69.51A. However, as Judge Mura himself explained, this provision, if approved, would be “an empty order,” essentially authorizing the cooperatives to continue operating legally as long as they are operating legally. Though Judge Mura’s order did provide the cooperatives with a modest legal validation, it did nothing to stop the City’s shut-downs. Nor did the order resolve the questions that continue to burden Bellingham and the state as a whole: Who determines whether a cooperative is operating legally? What rights does a cooperative have in defending itself against police raids, arrests, and inventory seizures? And until statewide decision-makers address the biases that surround the very existence of medical cannabis, how can the community ensure that these disputes are handled in a consistent and transparent manner under Washington state law?

Until these and other issues are conclusively put to rest, Washington is likely to see more shut- downs like the ones that occurred in Bellingham. Unfortunately, not even the most diligent medical cannabis business can guarantee protection from city, state, or federal scrutiny. One conclusion is clear, however: the flaws of Washington’s medical cannabis laws and enforcement practices do not entitle any business to neglect its registration, documentation, taxes, or any other facet of legal compliance. While numerous issues remain unresolved, there is no question that full compliance is crucial for any cooperative that wants to stay in business. Northern Cross awaits a decision regarding a revocation of its business license by the City of Bellingham with a hearing to take place on July 6, 2012. Starbuds’ business license hearing will be held on July 13, 2012.

Hilary Bricken Cannabis Business AttorneyHilary Bricken, with Canna Law Group, is regarded as one of Washington State’s premier medical cannabis business attorneys. Hilary assists MMJ businesses of all sizes with everything from corporate structure and intellectual property protection to branding, licensing and medical marijuana law. 

Visit the Canna Law Group website here: http://cannabislawseattle.com
Follow Hilary Bricken on Twitter: 
https://twitter.com/cannabizlawyer 

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of THCbiz.

 


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