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Bureau of Reclamation Issues Policy Prohibiting Use of Federal Water for Marijuana Cultivation, But Policy May Lack Teeth

May 21, 2014 posted by Eric Christensen

Yesterday, the Bureau of Reclamation issued a policy prohibiting the use of water supplied by the Bureau for the cultivation of marijuana. The Bureau's policy is important for the future of legalized marijuana operations because Bureau-operated dams and canals supply water to farms across much of the arid West. Bureau projects, notably including eastern Washington's huge Columbia Basin Project, are major water suppliers in Colorado and Washington, which have recently moved toward legalization of recreational marijuana use, as well as several other Western states that have legalized marijuana for medical use. In addition, the policy is important because it answers at least some of the largely-overlooked questions that marijuana legalization raises for water and electric utilities serving marijuana operations. A closer look at the policy and accompanying pronouncements, however, suggests that the policy is likely to have limited practical effect. For example, the Bureau did not threaten to shut off water to its customers -- local irrigation districts -- or take any other sort of enforcement action directly against the irrigation districts or end users. Further, the Bureau will not conduct investigations to determine how the water it supplies is being used. And the policy does not prohibit the use of water from reservoirs in which federal water is commingled with water from non-federal sources. However, if asked for approval to use water for cannabis, the Bureau will decline. In addition, if it becomes aware that federal water is being used to irrigate marijuana crops, the Bureau will notify the Department of Justice ("DOJ"), but will not take any other action. In other words, the policy appears to be business as usual with the exception of possibly informing the DOJ of water use by licensed growers. The DOJ's announced policy is to focus its enforcement resources in violent drug gangs, drug-related violence, and similar high-priority issues, so, absent a change in DOJ policy, federal enforcement action against local irrigation districts or licensed marijuana growers is unlikely as long as growers comply with Washington laws and regulations governing marijuana growing operations. The announcement also begs the question of whether the Bureau of Reclamation has the authority to adopt such a policy and whether it could employ water shut-offs as a means of enforcing the policy against Washington cannabis producers. The Bureau's policy states that is "will not approve" the use of Bureau facilities or water in the cultivation of marijuana. While it may not be able to "approve" of the use of its water for cultivation, there is serious question whether the Bureau has the authority to enforce the Controlled Substances Act or otherwise prevent water from being used for legal marijuana cultivation. For example, Section 8 of the Reclamation Act of 1902 (the "Act") states: "[N]othing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation." This provision makes state water law determinative of all water rights issues. Since the Bureau will not take any specific enforcement action against irrigation districts or end users, and defers to state law on water rights issues, actual enforcement of the policy will apparently be left to the DOJ and individual irrigation districts. However, irrigation districts in Washington have limited authority to restrict water deliveries that are consistent with rights established under Washington's system of prior appropriation. In particular, Washington's Supreme Court has made clear that irrigation districts must respect water users' existing water rights and may not adopt rules or regulations that discriminate between users on the basis of which crops are grown. For example, in Neubert v. Yakima-Teiton Irrigation District, 117 Wn.2d 232, 814 P.2d 199 (1991), the Court held that an irrigation district could not give preference to the use of water for frost protection if that use might limit water available to ordinary users. The Court found that, under Washington's prior appropriate doctrine, the irrigation district is obligated to respect the water rights of its customers, and can limit deliveries only if consistent with the priority and volume of the original beneficial use of the water, even if the intended use subsequently changes. Id. at 238. Similarly, in Barker v. Sunnyside Valley Irrigation District, 37 Wn.2d 115, 221 P.2d 827 (1950), the Court found that rules adopted by irrigation districts "must be nondiscriminatory in their operation and effect, and be free from coercive aspects." Id. at 120. Although these decisions do not address use of water for crops that remain illegal under federal law, the decisions suggest that there is no basis for an irrigation district to enforce a policy that prohibits a water user from exercising its water rights to cultivate cannabis that is grown in accordance with state law. Further, since the Bureau must defer to Washington State law on the issue of water rights, the Bureau's authority to enforce its new policy appears to be limited. If you have any questions about Washington's marijuana legalization initiative (I-502), the Bureau of Reclamation's marijuana policy, or the legal risks associated with marijuana production in Washington, please contact GTH attorney Ryan Espegard. Ryan, the primary author of this post, is recognized as one of Washington's leading experts on I-502. If you have any questions about water, energy, or the implications of I-502 on utilities and the environment, please contact a member of GTH's Energy, Telecommunications, and Utilities or Environment & Natural Resources practice groups. We're proud that our partner Jim Waldo was recently named 2013 Lawyer of the Year for Energy and Natural Resources Law, and practice group members Don Cohen, Bill Lynn, and Brad Jones were all named among Seattle's Best Lawyers. Disclaimer: We provide advice to assist clients in complying with Washington state laws addressing cannabis related businesses. Possession and distribution of cannabis is illegal under federal law. We do not provide advice on cannabis-related federal law including criminal, tax or interstate commerce issues.