The Liquor and Cannabis Board Just Lost a Court Case—To a String of Christmas Lights

Let it glow, let it grow, let it glow! Cappi Thompson

Government regulations can sometimes feel insurmountable, but occasionally the most unlikely of sources can bring them toppling to the ground. That happened recently when a local pot shop's Christmas lights became entangled in Washington’s stringent cannabis regulations. The Christmas lights fought the law, and the law did not win. In fact, the law lost so badly that the law doesn't even exist anymore.

This story begins in November of last year when the Hashtag Cannabis pot shop in Redmond decided to celebrate the holidays by hanging a string of Christmas lights that spelled the word “POT” in their window. A bit low-brow in the world of holiday decorations but nonetheless a legal way for the shop to both promote their store and celebrate the holidays.

The Liquor and Cannabis Board (LCB) disagreed. The state's pot regulator told the business that the lights constituted a sign and, under the LCB's signage rules, it was a violation of state law. Specifically, the string “sign” was too big, it wasn’t permanently affixed, and it violated a limit on only two signs per business. Hashtag was ordered to take down the lights and pay a $2,500 fine.

The shop removed the lights but refused to back down, and instead sued the state and claimed the rules were an unconstitutional infringement on the pot shop’s free speech rights. Nearly a year and tens of thousands of dollars in legal fees later, a King County Judge agreed with the pot shop.

On Nov. 17, King County Superior Court Judge David Keenan decided in favor of Hashtag and deemed the LCB rules in question were unconstitutional, ruling that the LCB’s laws “violate the First Amendment to the United States Constitution and Article I, Section 5 of the Washington Constitution.”

The LCB had until this week to appeal the ruling but declined to do so, according to Brian Smith, a spokesperson for the board. Smith said the board is still deciding how they are going to enforce their advertising rules following the court decision.

“We are currently discussing how to implement the decision,” Smith said. “Once an internal decision is made, we will notify our staff and licensees.”

Logan Bowers, one of Hashtag’s owners, told The Stranger that it cost the shop over $30,000 in legal fees to argue the case, money they won’t get back.

“I was just really pissed. We were frustrated with being dicked around,” said Bowers, who recently ran for Seattle City Council. “Sometimes doing the right thing costs a ton and it’s a little bit of a bummer.”

Bowers said he hopes the ruling will help push the state toward treating cannabis in more of a rational, normalized way, rather than the current system of rules, which are seen to be repressive. Bowers also added that the whole ordeal shows the weaknesses of our justice system.

“I think it’s a good cautionary tale that the legal system is not perfect,” Bowers said. “Even when you win you still kind of lose because you have to spend a lot of money, and it means if you don’t have money you don’t get justice.”

Ad Rules Don’t “Directly and Materially Advance the State’s Interest”

The freedom of speech is one of the cornerstones of American law—it’s enshrined in the First Amendment to the Constitution—but businesses do not enjoy the same free speech rights as individuals. The Supreme Court has ruled that the government can restrict what businesses say so long as the government provides a rational and clear reason for the speech restrictions.

But when it came to the Hashtag case, the LCB failed to show their laws were “directly and materially advancing the state’s interests,” according to the judge’s ruling.

The state argued that they place strict limits on signage at pot shops because they have an interest in limiting underage use of cannabis and pot advertising. The LCB cited two specific studies that looked at medical marijuana advertising and its effects on children. For that reason, the state requires that pot shops only have two signs, that they be under a certain size, that they only show the licensed trade name of the business, and that they are permanently affixed to the business.

That might make sense at first—of course the state has an interest in preventing underage drug use—but when the judge took a closer look at the LCB’s evidence their case started to fall apart. The studies the LCB referenced studied marijuana billboards, not just retail signage, and found that billboards “may also contribute to increased marijuana use” among the youth. Despite being aware of this study, the LCB allows pot companies to advertise on billboards and has significantly more relaxed requirements for what pot companies can say on a billboard.

The state was effectively allowing some aspects of its rules to undermine its overall goal with strict retail signage.

“Here, given that, based on the state’s own evidence, parts of the advertising restrictions actually undermine rather than advance the state’s interest in preventing underage consumption, the court concludes that [the law’s] restrictions on the content, size, and manner of affixing on-premises advertising do not directly and materially advance the asserted interest,” Judge Keenan said.

Smith said the LCB’s rules were based on laws passed by the state Legislature, not by rules created by the regulatory agency itself.

“Please note that restrictions for on-premises signs are also in statute. That means the law was written that way. Our on-premises signs rules are aligned with the statute,” Smith said in an e-mail.