Is recently passed cannabis law unconstitutional? It’s possible.

SB 5131  was signed by the governor on May 16, 2017, and it officially went into effect yesterday (July 23). It contains a myriad of different regulations, but perhaps the one that will affect cannabis businesses the most are the heavy restrictions being placed on advertising, or what we lawyers sometimes call commercial speech (being speech made for the profit of a company, which is less protected than regular free speech by an individual).

The new law contains language prohibiting any advertising within 1000 feet of schools and other public property, and prevents advertising likely to be attractive to children through the use of toys, inflatables, cartoon characters, and other mechanisms. Fair enough. Cannabis should be kept away from kids (except when medically necessary) after all, and I doubt a court would elevate a company’s free speech rights over concern for children’s exposure to
cannabis. But the law goes much farther than that.

The law states, “All outdoor advertising signs, including billboards, are limited to text that identifies the retail outlet by the licensee’s business or trade name, states the location of the business, and identifies the type or nature of the business. Such signs may not contain any depictions of marijuana plants, marijuana products, or images that might be appealing to children.” Now that is language that is far more restrictive than merely keeping cannabis ads from kids. So all outdoor advertising is restricted solely to text identifying the retail outlet’s name, location, and “nature of the business,” and no depiction of marijuana plants or products are allowed. This leads to a number of issues:


-  Since the language here states “the retail outlet,” cannabis producers and processors are apparently exempt.  Why would lawmakers make that distinction, and isn’t the intent behind this law easily undercut if growers start throwing up ads of cannabis leaves and products?
- The language states “advertising signs.” Is that meant to distinguish from other kinds of signs? Say a retailer posted a sign entirely unrelated to cannabis that said “Reelect Inslee for Governor.” That’s not identifying the company, but it’s also not exactly advertising the company either. Allowable or not?


- And further on this, one retailer recently had a sign that said, “Smoking marijuana makes you
gay.” Is that an advertisement, a statement of scientific fact, or merely a joke? Would that retailer get a violation notice from the Washington State Liquor and Cannabis Board (LCB)?

- No depiction of marijuana plants or products are allowed, but some kinds of maple leaves look an awful lot like cannabis. Taking the law at its plain meaning, the LCB couldn’t ding a retailer for depicting a Japanese maple leaf, could it?

Those are just a few potential issues and vagaries left with this new law passed. A number of our clients are concerned about it, and for good reason. A first violation on advertising involves a $1000 fine or a 5-day suspension of their license. A third violation would be a 30-day suspension. That would cost Uncle Ike’s nearly $1 million, and a majority of retailers over $100,000. So this is no laughing matter.

Finally, retailers can also arguably further circumvent these laws through unlicensed related businesses, also known as “ancillary” businesses. Recall that Uncle Ike’s has a glassware shop right next to its cannabis shop, so it has a massive “Uncle Ike’s” sign, clearly against LCB rules, but for its glassware shop. That sign has been up for years now, so retailers can be expected to try to find workarounds such as this.

The question of whether these laws are unconstitutionally overbroad or vague requires a more detailed legal analysis, and rest assured many lawyers and businesses are doing just that. This may be just the beginning of this issue.

TO INSURE PROMPT SERVICE

 

Should we tip our budtenders? The Washington State Liquor and Cannabis Board answered the question for us with a resounding “no.” No justifiable policy reason exists, and even if it did, the WSLCB has not made that reason public. Instead, the LCB’s agents have gone into King County I502 stores and demanded that budtenders take down tip jars. If the WSLCB wants to eliminate tip jars for budtenders, there is no one to stop them. It’s up to us (and you) to fight it.

Why do we hate tipping so much? The short answer is that we don’t. While it’s true that more than a hundred years ago our legislators enacted the first anti-tipping law in the US (and five more states followed), it’s clear that the laws were not taken seriously by the people or by the government. Washington State’s 1909 anti-tipping law was so poorly regarded when it passed that Governor Hay himself caused a minor scandal when he broke the new law. “If a waiter gives good service I feel like rewarding him… I do not believe the law prohibiting tipping is being observed at all and I am not afraid of being arrested,” he told a reporter for the San Francisco Call in August of that year. Anti-tipping movements were clearly never taken seriously, but even in 1909 it was the legislators’ call to make, not a decision to be made by an administrative body with little oversight from elected officials.

It was a different time, and public sentiment was that tipping placed the tipper in a position of power. That power made the tippee socially inferior, a concept alien to the core American value of equality. It was considered un-American to tip back when servers were paid living wages. Largely through that logic, tipping had all but disappeared by the time of the Great Depression. By most accounts, everything changed when FDR was elected- somewhere between the New Deal and the end of WWII tipping came roaring back and it’s been a bedrock benefit of service industry jobs ever since.

It’s long been industry custom to tip bartenders, baristas, sommeliers, servers, hotel concierge and bellhops, elevator conductors and doormen, cab drivers, karaoke hosts, and even tattoo artists. What makes a budtender different? It’s easy. Budtenders AREN’T different. The WSLCB wants to argue that we don’t tip liquor store employees, but there are two glaring problems with their analogy. First, since when does the regulating body get to determine industry custom? A famous judge (Learned Hand on Negligence for any policy wonks out there) once said that to find the best way to regulate industry, the law should look to industry custom. We agree! The WSLCB’s approach is backward in policy and counterproductive to Seattle’s goal of raising minimum wages for all employees.

Second, and more important for this discussion, liquor stores have samples! A budtender is more like a sommelier than a clerk at a liquor store. Your budtender is a person steeped in cannabis knowledge, there to guide your personal journey to nirvana. Just like at an I502 shop, you don’t get to sample wine before you buy it at a restaurant. Once that bottle is opened, it’s yours unless it’s spoiled. That sip you get after the bottle is opened isn’t a sample- it’s to make sure your bottle isn’t corked!

Like that sommelier, your budtender plays a game of 20 Questions with each customer, finding just the right strain for his or her needs. Because customers don’t get to sample on premises, or even open jars to smell or touch the product, they’re forced to rely on the budtender’s expertise. Your budtender has to spend unpaid time away from the counter going through samples, making tasting notes, and generally keeping up with each new product that comes through the shop. Morally, we should pay them for that effort because all work deserves fair pay- not just the strictly on-the-clock work behind the counter. These men and women have spent long hours building their knowledge and experience just so they can help us, and to eliminate tip jars is to say that their time is only worth minimum wage. We know that’s not true!

What do you think? Hit us up on twitter @WACannattorney and use the #tipyourbudtender hashtag to comment!

For further reading:

San Francisco Call, Volume 106, Number 75, 14 August 1909

http://cdnc.ucr.edu/cgi-bin/cdnc?a=d&d=SFC19090814.2.5

Introducing The Team! Part 1: Boss, Man

C3's dynamic team has your back, whether you've been wronged by a business partner or by WSLCB. 

Sean Badgley hails from the mountains of Colorado, where he graduated from the University of Colorado with a degree in Business Economics and a minor in Film. Sean moved to Seattle in 2010 and plans to stay here with his partner Jazz and their black lab mix Leelah. Sean earned his Juris Doctor from Seattle University's School of Law. From day one of law school, Sean knew he wanted to work in cannabis. For an attorney, cannabis is an exciting new opportunity not just to practice law, but to make it. Sean's roles as a founding partner in C3 include advising clients in I-502 compliant cannabis businesses, civil and administrative legislation (we're looking at you, WSLCB), mentoring junior attorneys, and managing interns and cases. Sean is no stranger to hard work- prior to his career as a cannabis litigation attorney and managing partner, Sean worked as a banker, bartender, and even as an auto repair technician in his father's shop.

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Part 2 coming soon!