Countdown to retail pot sales, growing, processing
State Liquor Control Board deadlines to get ready for I-502 sanctioned marijuana sales, processing and production
Strong interest statewide
WENATCHEE — The rules aren’t officially out yet and legality remains questionable, but East Wenatchee housepainter-turned-cannabis-entrepreneur Mark McCants is eager to be among the region’s first vendors of recreational marijuana.
He and his three business partners have leased space in a Moses Lake strip mall for what they hope will be the first of three retail marijuana stores sanctioned under voter-approved Initiative 502.
They’re working now to find locations in the Wenatchee Valley and north into Omak.
“Somebody’s got to do it, and I wanted to be the first,” said McCants, a certified user of medical marijuana to control arthritis pain. “Everything in life is a risk… If you’re in the right place at the right time and are copacetic with the rules, you’ll be fine.”
Western Washington appears to be on fire with I-502-sparked cannabis entrepreneurship. Seattle-area informational meetings have drawn standing-room-only crowds numbering 300 to 400 people each. Officials in cities and counties around here say throngs of hopeful pot profiteers haven’t been breaking down their doors, but a recent Chelan County hearing on marijuana drew a couple dozen people, including potential growers, who overwhelmingly supported I-502. Interest may be cautious, but it’s out there.
“I’d rather respect the local government than get in trouble. Too many kids and families come in here,” says Emma Serino, owner of Wenatchee’s Hippie Vintage Shop.
Marijuana imagery doesn’t dominate in Serino’s shop, but it’s certainly present, from pot-leaf adorned textiles to cannabis-scented incense. She sells a few pipes behind the counter, is an advocate for medical marijuana and has a stack of brochures available on where to get it locally.
But she’s still not ready to dive into selling the actual product, just yet, and is in favor of regulation.
“There are a lot of benefits, but I don’t want 10-year-olds using it,” she said.
Mike Yoo, owner of East Wenatchee smoke shop Cigarettes Cheaper, is more suspicious.
“If we could sell it, we would, but it’s too risky because it’s still illegal federally,” he said.
The feds, he said, could be waiting for I-502 to get the state’s marijuana dealers out of the shadows for an easy bust. Besides, not even the new state law allows marijuana to be sold in stores that sell other tobacco products.
Plenty of other reasons exist to make prospective sellers think twice.
Tons of rules and regulations
The state Liquor Control Board’s evolving list of I-502-spawned regulations currently tops 43 pages. The text of the new law is 73 pages.
Agency spokesman Brian Smith says the board is on track for the rules to take effect Nov. 16. It will launch a 30-day window Nov. 18 to receive applications from entrepreneurs seeking licenses to grow, process or sell marijuana under I-502.
That includes licenses for 334 retail stores state wide — a number set by the state that already tops the total 329 liquor stores that operated in Washington before 2012, when grocery and other stores began selling booze, Smith said.
Board officials estimate that the 334 retail marijuana licenses will capture only about 25 percent of total market demand. The number of licenses issued will increase over time, he said.
Lengthy and complex rules may be causing some hesitation among entrepreneurs locally.
“What I have discovered is that a lot of people who are interested have not done their homework,” says Pamela Woodard, owner of Urban Garden, a Wenatchee indoor gardening store.
“People are waiting to see what happens and waiting to see what the final draft rules are,” Woodard says. “We will see 502 get a face-lift in its first two years. We’ll see how it plays out.”
No bank financing
Entrepreneurs won’t be able to turn to banks for start-up cash, at least not yet.
“Marijuana’s still illegal under federal law, and we’re a federally chartered financial institution,” says Ken Martin, president of Cashmere Valley Bank. “Because of that we’ve made the decision that we are following federal law and choosing not to bank the marijuana business. I haven’t heard of anybody who is, and I know that’s a big challenge for the industry.”
In a nod to Washington and Colorado’s recent citizen initiatives to legalize recreational pot, the Obama Administration’s Justice Department has said it won’t crack down on pot businesses here, but it hasn’t agreed to legalize marijuana nationwide.
“They’re a little vague on what their real position is,” Martin said. “Once that clears up and it becomes legal under federal law, we will bank the marijuana business. We aren’t making a judgement of whether it’s right or wrong. If it’s legal, we will offer banking services.”
A prepared statement from big national bank Wells Fargo says much the same thing — no loans until the feds say pot is legal.
Cities and counties still uncertain
East Wenatchee, Leavenworth, Chelan and Chelan County have all imposed moratoriums on I-502 sanctioned marijuana operations and businesses until staffers can reconcile the conflicts and potential risks of allowing a state-sanctioned activity that violates federal law. Municipalities in Okanogan County are also pondering moratoriums.
The Wenatchee and Cashmere city councils have both voted not to allow the businesses. Most of the region’s local government codes don’t allow local rules to violate federal laws.
Wenatchee’s down vote comes could result in lawsuits by hopeful entrepreneurs.
The state has ruled that three of the Chelan County’s six potential marijuana stores must be located within Wenatchee city limits.
It also comes despite the advice of Mayor Frank Kuntz, who has encouraged his city council to accommodate potential pot sellers like McCants, who are working hard to understand the rules and create well-run, tax-paying business.
The city’s sales-tax revenues are currently lacking, and budget discussions include talk of potential layoffs.
The Cashmere council also remains adamant. At least for now.
“Our stance is pretty solid,” says Mark Botello, the city’s planning director. “Right now, it’s a ‘no,’ until the state adopts its rules and we wait and see what other jurisdictions are doing. We could revisit it next year.”
That council’s ruling came after handful of local people expressed interest in opening marijuana stores in town, Botello said. Many west siders have called to inquire about buying or leasing the former TreeTop building along Highway 2/97 for indoor growing/processing operations, he said. The big building was used for years to process fruit into juices, but has been vacant since 2008.
Not all counties and cities have reacted as cautiously.
Douglas County Commissioner Ken Stanton said marijuana businesses will be treated as any ag product in the unincorporated county.
“We’re treating it as a ‘voters have spoken’ issue,” Stanton said. “Marijuana is legal and can be situated anywhere it is zoned for agriculture.
Chelan County commissioners also sound supportive and agreed last month to shorten the moratorium they imposed in September.
Even in areas more open to marijuana businesses, regulations make it tough to find a location.
Businesses sanctioned by I-502 must not be within 1,000 feet of a park, school or other location where children congregate.
That rules out a lot of potential locations, including the old TreeTop building, which is too close to the Cashmere Museum and Pioneer Village.
In a small city like East Wenatchee, with many small schools and parks, finding a place is proving to be a challenge.
“It’s like looking for a needle in a hay stack, and I’d even call it like looking for a golden needle in a hay stack, because that’s even harder to find,” hopeful entrepreneur McCants says.
He and his partners have encountered discrimination from landlords and their representatives who have suitable space to lease, but just don’t want to lease it for a pot store.
The group must have contingent leases in place before it can apply for a state license.
Time is running out. McCants fears having to wait a year or more until a next round of licenses may be offered.
“We’ve got more hoops to jump through than any circus act would have to perform,” McCants said. “We’re complying with all the requirements, and the Liquor Control Board has rules that are more strict than the city could every come up with.”
But they’re working through it, he says, and getting closer to the day when customers will be able to walk into one of their shops, approach the counter, view a menu with maybe eight varieties of state-grown pot, pick up some rolling papers or related items and head home to enjoy.
“It’s like wine,” he said. “Wouldn’t it be nice if you were shopping for a big dinner and on the way home could stop and buy some pot? The dessert would taste a lot better.”