Supreme Court rules 5-4 against Chelan County over 2015 halt to local cannabis production

1597

OLYMPIA — A narrow decision by the state Supreme Court finds that Chelan County’s moratorium on cannabis growers in 2015 should not have been used to keep a Malaga marijuana farm from operating.

Seven Hills Farms won a 5-4 ruling issued Thursday, with the majority of justices finding that the county’s moratorium did not affect the zoning laws under which Seven Hills was already established, and that a subsequent zoning revision that had the effect of outlawing most cannabis production should not have been applied to close down the operation.

It’s a legal blow to Chelan County’s handling of the local cannabis industry that started after the 2013 legalization of commercial growing. About 40 producers obtained state licenses and launched businesses in the county, with assurances that cannabis would be treated under zoning similarly to other agricultural crops.

But Chelan County commissioners first placed a moratorium in 2015 on any new cannabis startups, then in 2016 amended the definition of “agricultural” in its zoning code to exclude cannabis. In 2017 they passed another ordinance categorizing the largest cannabis operations as industrial, and forcing them to operate only indoors.

Seven Hills leased land in Malaga and incorporated in 2014, and built temporary greenhouses and a fence in spring 2015, with county permits. The moratorium on new cannabis producer operations passed the county board that September.

Seven Hills continued construction while the moratorium was in force, installing propane tanks. The Washington Liquor and Cannabis Board, which licenses operations, approved Seven Hills’ license application in January 2016, and the business began farming.

But the county’s Community Development Department told Seven Hills in September 2016 that it was in violation of the moratorium, and ordered it closed as a public nuisance. A county hearing examiner and a Chelan County judge upheld the closure in 2017, as did the state Court of Appeals in 2020 after Seven Hills challenged the ruling.

But the Supreme Court’s majority decision finds that “the County’s moratorium on the siting of cannabis processing and growing operations did not amend existing zoning laws.” Because cannabis growing was a lawful use of property in rural industrial zones until the county struck cannabis from its “agricultural” definitions in 2016, the court found Seven Hills was operating legally.

Even the 2016 change in zoning language did not by itself prohibit Seven Hills’ operation, the majority found, because the change was not retroactive “to established uses existing before its adoption.” In other words, Seven Hills was subject to grandfathering.

The majority, led by Justice Barbara Madsen, also found that the operation did not amount to a public nuisance, and Seven Hills was not required to obtain building permits for its greenhouses. It upheld only one finding by Chelan County: That Seven Hills should have obtained a final inspection and certification of its propane tanks. That matter must now be readjudicated in Chelan County Superior Court.

Justices Susan Owens, Debra Stephens, Sheryl Gordon McCloud and G. Helen Whitener joined the majority opinion. The four-justice minority, led by Justice Mary Yu and joined by Chief Justice Steven González, points out that Seven Hills had not actually begun producing cannabis when the county’s moratorium went into effect, and says it therefore should not be grandfathered.

“Seven Hills claims that it started its cannabis production business in Chelan County before the County permanently banned such businesses,” Yu wrote. “But Seven Hills did not site its cannabis production business in the County until after the moratorium explicitly prohibited it from doing so. Therefore, the County properly ordered Seven Hills to cease its unlawful operations.”