Originally published… in The Pipeline: Cannabis Law Advisor Blog
Lane Powell’s Cannabis Practice Group discusses the legal issues that impact the cannabis industry, including regulatory, banking, intellectual property and investing.
About the Author: Michael A. Nesteroff
Mike Nesteroff is a preeminent environmental lawyer with extensive experience representing clients in environmental litigation, agency negotiations, property acquisition and leasing issues, and counseling clients on risk and compliance.
During his 27 years at Lane Powell, he has represented clients in litigation claims involving hazardous material investigations, cleanups and cost recovery at sites in Washington, Oregon and Alaska. He has obtained a several million-dollar cost recovery judgement on behalf of one client and a defense verdict in another cost recovery case. Mike has also represented clients in litigation involving public records and obtained a favorable court of appeals ruling on a previously-untested exemption in the Washington Public Records Act.
The Washington Clean Air Act governs air emissions and that includes the production and processing of marijuana. Whether the regulatory body is the Washington Department of Ecology or one of seven regional clean air agencies that also have regulatory authority, the bottom line for any marijuana production and processing facility is that some level of compliance with odor and other emissions limits is required. But what it takes to comply depends on where the facility is located in the state, as illustrated by two Pollution Control Hearings Board (Board) cases involving marijuana facilities in two different regional clean air agency jurisdictions.
Central Puget Sound Area
If a facility is located in King, Pierce, Snohomish, and Kitsap Counties it comes under the jurisdiction of the Puget Sound Clean Air Agency (PSCAA), which has concluded that producing and processing marijuana has the potential to emit air contaminants, such as odors and volatile organic compounds. Therefore, those facilities must submit a pre-construction application to PSCAA that usually results in a permit with site-specific requirements. This may include requiring the use of carbon filters or other emission control technology.
So far, PSCAA has approved more than 45 Notices of Construction for marijuana production and processing facilities under its jurisdiction, but a failure to obtain PSCAA’s approval can result in first, a notice of violation and, if unresolved, an order to prevent construction. That’s what happened to a marijuana facility in Snohomish County in the case of Avitas Agriculture, Inc. v. Puget Sound Air Pollution Control Agency. The facility operator argued that it did not need to obtain PSCAA approval because the Clean Air Act exempts agricultural activities. PSCAA disagreed and the Board determined that the exemption did not apply to this facility.
To qualify for an exemption for “agricultural activities” under the Washington Clean Air Act, at least five acres of land must be devoted primarily to the commercial production of livestock, agricultural commodities, or cultured aquatic products. The Avitas facility was located on 8.64 acres and was licensed as a Tier 2 marijuana production and processing facility, meaning it could have no more than 10,000 square feet of plant canopy. The actual plant canopy at the site was between 1,000 and 3,000 square feet. The marijuana plant canopy, even at full Tier 2 capacity, would be well short of the statutory minimum for the exemption to apply. Furthermore, even if the square footage of the production and processing buildings were included, there still would not have been enough to meet the five-acre requirement.
Avitas contended that other agricultural activities were taking place on the property. It argued that half of the property was commercially farmed for hay and used to feed goats kept on the property and supplement compost used for marijuana production. Avitas, however, did not submit any current photographs or documentary evidence to substantiate the commercial hay business nor did PSCAA inspectors see any hay production when they visited the property. Avitas also did not help its case when it ultimately submitted a Notice of Application that contained an environmental checklist stating the site had been used as pastureland for the previous owner’s animals, but made no mention of any crop or grain cultivation on the site.
PSCAA concluded that Avitas’ production and processing covered less than the statutory minimum five acres for agricultural land and, therefore, were not exempt from the Clean Air Act and PSCAA’s requirements for odor control devices. The Board concluded that Avitas had not met its burden of demonstrating that its activities took place on agricultural land and, therefore, could not establish that its production and processing facilities were exempt from PSCAA’s requirements.
Even if the agriculture exemption might apply to a marijuana production and processing operation, PSCAA has taken the position that a processor still is required to submit a Notice of Construction because the agricultural exemption applies only to odors and fugitive dust. The agency takes the position that the agricultural exemption in RCW 70.94.640 does not exempt facilities from the approval requirements if the facility has the potential to emit an air contaminant such as volatile organic compounds. Because PSCAA has determined that marijuana production and processing facilities have the potential to emit air contaminants, a marijuana production and processing facility in PSCAA’s four-county central Puget Sound jurisdiction must go through the approval process.
An example of a different approach, at least as to odors from marijuana processing and production facilities, is Green Freedom, LLC v. Olympic Region Clean Air Agency, where a facility was fined for emitting odors that unreasonably interfered with a person’s use and enjoyment of their property.
The Olympic Region Clean Air Agency (ORCAA) covers Thurston, Mason, Pacific, Grays Harbor, Jefferson, and Clallam Counties, but does not have specific regulations applicable to marijuana. Thus, unlike PSCAA, there is no requirement for a marijuana production and processing facility in the ORCAA jurisdiction to submit an application for approval. ORCAA, however, does have a general rule that prohibits odors that “unreasonably interfere with another person’s use and enjoyment of their property.”
In the Green Freedom case, a neighbor who lived 300 feet from a marijuana growing operation near Elma, Washington, complained frequently about odors. An ORCAA inspector visited the site after one complaint in January 2016 and detected a “skunky” marijuana odor as well as wood smoke. ORCAA issued a Notice of Violation and, later a Notice of Civil Penalty Assessment for $750.
After the Notice of Violation, the facility operator installed carbon scrubbers on exhaust fans to mitigate odors, but also appealed the Notice and penalty. The operator contended on appeal to the Board that the odor did not unreasonably interfere with the neighbor’s enjoyment of her property because the smell occurred on a rainy, cool January day and was only identified within 20-25 feet of the fence line, not 300 feet away at the neighbor’s house. The operator, however, conceded that had the odor been present in the summer, there would have been an unreasonable interference with the neighbor’s ability to enjoy their property.
The Board affirmed the penalty, saying that there was sufficient evidence the marijuana odor unreasonably interfered with the neighbor’s use and enjoyment of her property. Even though it was unclear how much of the neighbor’s property was affected, the Board said that it was clear the property was impacted.
The opinion’s recitation of the facts noted that there also was an odor associated with wood smoke, but neither ORCAA nor the Board made any legal determinations on that point. Nevertheless, it is important to note that WAC 173-400-040(8) prohibits the installation or use of any means that conceals or masks an emission of an air contaminant that would otherwise be a violation of the Clean Air Act, which prohibits odors that unreasonably interfere with another property owner’s use and enjoyment of their property.
The lesson from both of these decisions is that a marijuana production or processing facility regardless of its location in the state is subject to air pollution regulations that can be used to enforce limits on odors and other emissions from the facility.