The legislative action around marijuana was relatively light in 2017. However, there were still some significant bills and the budget included a disappointing reduction in marijuana revenue sharing with cities and counties.

As we have come to expect, there were efforts to restrict cities’ authority to regulate and prohibit the siting of marijuana businesses. HB 1099 and HB 2060 both would have significant restrictions on local authority. AWC strongly opposes any restrictions on cities’ regulatory and zoning authority related to the marijuana industry. While we have successfully opposed these efforts over the last few years, we do believe these kind of proposals will continue in the future.

The major marijuana legislation that passed in 2017 was SB 5131, an omnibus bill that addressed a number marijuana policy areas. The Liquor and Cannabis Board (LCB) developed this fact sheet about the changes made by SB 5131. Most of the changes do not directly impact cities. The exception may be the changes to marijuana-related advertising. Here is a LCB fact sheet on the new advertising restrictions. The new restrictions do not effect a city’s ability to adopt its own more restrictive advertising requirements.

When the Legislature finally adopted its 2017-19 budget in time to avoid a state government shut down, one of the casualties was an $18 million reduction in marijuana revenue sharing with cities and counties. This is extremely disappointing, especially since this was an agreement made only two years ago. In the new budget, city and county marijuana mitigation revenues were reduced from $30 million to $12 million in the 2017-19 biennium. This comes at a time when a new formula for distributing marijuana revenues is effective: 30 percent of the distribution based on jurisdictions’ marijuana retail sales and 70 percent based on a per capita basis (this only includes jurisdictions that allow marijuana businesses). Due to these complicating factors, the amount of local marijuana distributions are, at this time, difficult to project. However, it is possible that the revenue will be restored back to $30 million if the February 2018 forecast of general fund revenues exceeds the June 2017 general fund forecast by over $18 million. AWC will continue to work with the Liquor and Cannabis Board to provide greater clarity for our members.

Even more disturbing is language in the budget that states that the Legislature intends to impose the $6 million cap on revenue sharing in all biennia following 2017-19. Cities will need to talk with their legislators about the impact of the reduced distributions and stress the importance of restoring the agreement from 2015 which calls for revenue sharing of $15 million per year in fiscal years 2018 and 2019 and $20 million in subsequent years.