Don’t build this empire on top of quicksand
Businesses need strong legal and social foundations
By Jamie Curtismith
Finding convenient, affordable and compliant property is one of the top challenges many applicants face. Not only does a parcel need to meet regulatory requirements to make it compliant, but it must also meet operational needs to be suitable. Frequently overlooked is a property’s appropriateness.
Compliant/Compatible
Much of the adversarial pushback has occurred when operators move to properties that meet all the technical requirements, but are not deemed “compatible” or appropriate by members of the community. Growing and processing facilities in or near neighborhoods, especially heavily contested rural cluster sub-developments, and retailers near churches or “all other areas where children congregate” are the core triggers that unleashes the ire of opponents (such as No Operational Pot Enterprises).
Large-scale operators and discreet access points have hidden out in the open for generations. Acclimation and discretion are two key lessons, especially for newly emerging business owners who are not from the communities where they intend to do business.
Church and State
Many municipalities are passing “church separation” buffers in response to the moral minority’s outrage that the devil’s weed is a gateway drug causing addiction, homelessness, and the breakdown of traditional family values. In land-use regulation, morality should never extend past a property line. But as the reefer-mad rhetoric spreads through council chambers and planning commissions, we can expect to see more morality bans and ethical restrictions implemented. The problem with separation requirements for churches, synagogues, mosques and other religious and spiritual institutions, is that local municipalities would then have to define who and what these institutions are, potentially causing serious First Amendment violations.
Residential Use
Additional buffers around a residence is another slippery slope in land-use regulation because even though an area may not be zoned residential, many zones are suitable for residential use. Land-use regulation is a complex subject, with far-reaching implications at the heart of economic development strategies and driving local politics. For example, one zone in Snohomish County, Washington was banned because it competed with the special interest of a long-term economic development strategy developed by commercial builders.
Another was banned because it competed with the coveted aerospace industry. A property might be compliant, suitable and compatible, but if it is not politically acceptable, it will not be permitted. All operators need to understand local zoning, building codes and political temperament, or get someone on the team that does. This is very difficult to achieve for time-constrained, boot-strapped operators searching for multiple properties across city and county lines, but as we’ve seen, not knowing these details have cost many operators their business.
Zone vs. Code
Understanding zoning and the International Building Code (IBC) is critical in assessing proper site selection. For the sake of simplicity, Planners use zoning requirements to help operators understand where they can be located and what building permits will be required. Zoning regulation is usually established by a council or commission who determines what uses are allowed in what zones. Building inspectors and fire marshals interpret code, as dictated by the IBC, to determine the actual use and occupancy of a facility to ensure compliance.
Devil in the Details
To save valuable time and money, the first thing to remember is to avoid running all over town looking at properties for rent or for sale, but to get a zoning map of the area and read through the local regulations to find out what can be done and where. Pay attention to additional set-backs and buffer zones because oftentimes, these have been intentionally worded to create de facto bans.
For example, the city of Everett, Washington just passed an ordinance that created a 1,000-foot buffer from residential zones. Looking at a zoning map, it is clear that even though the city allows for use in several different zones, the residential separation along with some other strategically placed restrictions, makes it virtually impossible to find available, suitably compliant, appropriately compatible property.
Operation Plans
Once a zone is identified and a compliant property is found, then it needs to be assessed to ensure the operation plan meets the intent of the zone. A 30,000-square-foot warehouse will not be well-received on a two-acre lot in a rural zone, but a few 2,500- to 5,000-square foot pole barns strategically placed on a 10-acre parcel with adequate setbacks may cause less outrage. An outdoor grow or soft-sided greenhouse is not suitable in a densely populated area, even if a nursery using the same type of structure is located just down the street. Just because a building already exists on a property does not mean an operator will be able to secure the required permits to operate as a marijuana business.
Classifications
In general, buildings are categorized for occupancy under different classifications and interpreted by local building officials based on their intended use. For example, in Snohomish County, any production using a membrane structure is Group U for “utility,” like a greenhouse. Group F, or “factory industrial,” is used for processing. Many buildings have multiple or “mixed” occupancies, and the stricter code is usually enforced.
Definitions
The trouble many operators are having is that their greenhouse grows (U) that also process (F) because they trim, dry and package the plant, are now being forced to industrialize their operation to comply with code standards, which are then disallowed under the intent of the zone where they are located. Because cannabis is still federally illegal, it cannot be declared an agricultural commodity by the USDA. Without support from the state Department of Agriculture, the Department of Revenue defined marijuana as a manufactured product to issue business licenses and collect tax revenues, which is why in Washington State growers are called producers and not farmers.
This has prevented cultivators throughout Washington from being granted protection under right-to-farm provisions. If we could get regulatory agencies to define and regulate cannabis as an agricultural commodity instead of a manufactured product, this would remove most of the barriers we are facing in the land-use battle.
Permits and Vesting
Every local land-use agency has different requirements, but most have adopted similar language to keep a level of consistency throughout a region. For example, in Snohomish County, all marijuana-related structures and buildings, including the conversion of existing buildings, require some sort of permit, including a certificate of occupancy, which are then classified by the building official’s interpretation of occupancy groups based on the proposed use.
There are ways to get around some of the building permits, but the operators who have done so are now finding themselves struggling to procure the necessary vested status that will allow them to continue operating under new, and constantly changing regulations. For this reason alone, it is imperative that operators involve themselves in the ongoing land-use debate once a site is selected.
An Industry Built on Quicksand
As with all things in the industry, there are no guarantees. Many operators who have performed the utmost due diligence, jumped through every hoop and abided every regulation, may still have the rug pulled out from under them. Being involved in the regulatory process minimizes this uncertainty and allows for more informed decision-making. Our industry is too fragile and vulnerable to employ the cutthroat tactics of hyper-competitiveness.
The over-reliance on volunteers and industry advocates to perform business functions for someone else’s profit is nearing an end. Every operator has a responsibility to rally together to interject some common sense into the regulatory process to provide stability. Entrepreneurs too busy, too secretive or too competitive to participate, may be constructing the greatest facility ever, but they are building their empire on quicksand.
Known as the “PTA Mom of Pot,” Jamie Curtismith advocates for cannabis legalization through her work with the R5 Cooperative in Snohomish County, Washington and as a formation committee member working to establish the Washington State Cannabis Commission.