February 10, 2013 in City

Medical pot dispensaries hope legalization opens new doors

By The Spokesman-Review
 
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In a storage area at the Herbal Connection Club, owner Paul Lugo stores a few marijuana plants for some of his growers. Lugo doesn’t produce any at his shop.
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Among the antique stores and other shops of Spokane’s historic Garland District is a door painted with a happy snowman. Inside, the merchant is peddling medical marijuana while harboring hopes of soon expanding into the recreational market and cashing in on what many are calling the next great economic frontier.

The Herbal Connection quietly sells marijuana to card-carrying medicinal customers, as do nearly a dozen other medicinal pot shops currently operating in the Spokane area. The commerce continues despite raids and warnings in 2011 by federal agents that closed more than 40 medical marijuana dispensaries across Spokane.

Now, however, the merchants are openly preparing for a market that soon will include more than just medicinal use.

Emboldened by the voter-approved Initiative 502, which allows Washington residents 21 and older to possess an ounce or less of marijuana for recreational use, the new batch of pot entrepreneurs are hoping that federal agents will finally back off and respect the state’s decision to legalize pot even though Congress still considers it illegal.

“The last time, it got really big really fast,” Herbal Connection owner Paul Lugo said of the medical marijuana dispensary industry before the 2011 raids. “If one guy comes in and screws it up, the feds will be back here. But if you keep it low-key, say one shop per ZIP code, that would be more than enough space for everybody.”

Lugo said he chose the Garland location among the row of shops to comply with restrictions put in place by I-502 that prevent marijuana sales within 1,000 feet of schools, playgrounds or parks. The state is trying to figure out how to regulate the legal production and sale of marijuana and must have a system in place by Dec. 1.

Lugo and his colleagues are trying to navigate the ocean of unanswered questions surrounding Washington’s pioneering foray into marijuana legalization. The latest effort to bring clarity comes Tuesday as the state Liquor Control Board holds a forum at Spokane City Hall to gather information from the industry that largely has been forced to remain underground.

“The state has never had to go to the people they didn’t want to talk to before,” said Jen Lorz, co-owner of Northside Alternative Wellness Center. “It’s just one step in the beginning of many steps forward.”

However, those steps may be halted depending on the reaction of the U.S. Department of Justice.

“We are just waiting for the Justice Department to make a decision on how we are going to proceed,” said U.S. Attorney Mike Ormsby, the top federal prosecutor in Eastern Washington.

Ormsby ordered the 2011 raids that shut down numerous marijuana dispensaries and sent letters to commercial landlords advising they risk losing their property if they rent to dispensary operations.

Several defense attorneys who work with marijuana legalization advocates say they would advise against openly operating marijuana dispensaries at this point.

“If Mike Ormsby hasn’t changed his mind, they are in peril,” said Seattle attorney Doug Hiatt. “Until the Justice Department gives more reliable direction to the U.S. attorneys, I think it’s a bad mistake for anybody” to operate a medical marijuana dispensary in Spokane.

Jenny Durkan, the U.S. attorney for all of Washington west of the Cascades, has allowed medical marijuana dispensaries that follow state law to continue to operate. But those same businesses have been raided in Walla Walla, Spokane, Stevens and Whitman counties, Hiatt said.

“The law should be the same in Spokane as it is in Seattle. But it isn’t being enforced in the same way,” Hiatt said. “I don’t think there is a state, to my knowledge, where you have such a stark contrast. It really is an issue that should be straightened out so that people aren’t misled into thinking they are safe when they are not.”

Local attorneys Doug Phelps and Frank Cikutovich both said their phones have lit up with calls from potential clients who want to get in on what they believe are huge profits to be made under the state-operated stores outlined in the voter-approved I-502.

“I’ve met with no less than five clients a week since 502 passed,” Cikutovich said. “They are hoping to be the first. They are all interested in taking advantage of it. I have to explain … however, the federal government may say no, and there is no answer to that.”

A similar legal quandary occurred in 1998 when Washington passed a law allowing medical marijuana.

Cikutovich, whose clientele includes many people prosecuted for marijuana violations, said he thought he’d be “out of business” after the law went into effect.

“But it created more business than you can imagine because it confused everybody,” he said. Marijuana purveyors “are not intending to break the law. They just want to know what the rules are.”

For her part, Lorz, who operates the medical marijuana business on North Market Street, said she hopes federal agents recognize how well the existing businesses follow state law.

“Now with 502 … hopefully we’ll have a little leeway for our patients,” she said. “It is wanted by the people of this state. We are willing to be here because we feel so strongly about it.”

Unlike others, Lorz said she and her business partners are not looking to expand into commercial sales regulated by the Liquor Control Board. She said she is meeting soon with the Spokane City Council in an effort to get support for capping the number of medical marijuana dispensaries.

“It shouldn’t get out of control again. We don’t want them like Starbucks,” she said.

Both Lorz and Lugo have businesses with professional-looking waiting rooms. Patients can watch a flat-screen television and help themselves to free coffee.

“We are good partners for the community,” Lorz said.

Green, owner of Pacific Northwest Medical, set up shop in a two-story steel building on Houston Avenue, just to the northwest of the intersection of Frances Avenue and Nevada Street. The business sign is a banner hooked to a chain-link fence across the street from another building wallpapered with gang graffiti.

Green, 31, who once worked as a real estate appraiser out of the basement of his home, opened a dispensary in Shoreline, Wash., two years ago. He’s now opened a similar business in Spokane.

Green said he plans to attend the Liquor Control Board’s forum on Tuesday. He has either attended or will attend every one of the forums throughout the state.

“At this point, I wouldn’t consider running a place that is not 502-compliant,” he said. “I-502 is what we are moving toward.”

Lorz said the voters of Washington have shown that it’s time to shed many of the stereotypes of the typical stoners and recognize that a new time has come.

“There needs to be room for both” medical and recreational sales, she said. “I’m glad I’m living in this time to see it.”

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