Pubdate: Wed, 30 Jan 2013
Source: Seattle Times (WA)
Copyright: 2013 The Seattle Times Company
Contact:  http://seattletimes.nwsource.com/
Details: http://www.mapinc.org/media/409
Author: Bruce Ramsey
Page: 13

MARIJUANA ENTREPRENEURS ARE IN FOR A LONG REGULATORY TRIP

Monday night, Seattle Mayor Mike McGinn met marijuana entrepreneurs 
at the Washington Athletic Club. He wished them success. The mood was 
euphoric. But he and other officials are also sounding notes of caution.

The chairman of the Washington State Liquor Control Board, Sharon 
Foster, promises "lots of controls, regulation and enforcement."

The reason is political. President Obama, who smoked plenty in his 
youth, has not yet embraced the Colorado and Washington deviations 
from federal rule. His attorney general, Eric Holder, has warned Gov. 
Jay Inslee against allowing marijuana to leak out to other states.

Inslee - who did not support Initiative 502 because of just this sort 
of problem, but supports it now because the voters did - wants Holder 
to leave his state alone. Good for him. But to placate Holder, he has 
to make sure the new market is screwed down tighter than the industry 
and its customers want.

For example, by mid-August, the Liquor Board expects to issue 
licenses to marijuana growers. Many existing growers have criminal 
records. Should they be kept out?

Let them in, said Seattle attorney Ryan Espegard of Gordon Thomas 
Honeywell at the Liquor Board's Jan. 24 forum in Seattle. License 
them and they "will divert their product from the black market to the 
legal system."

As commercial advice, that makes total sense. But if the Liquor Board 
does it, said the state House of Representatives' expert on 
marijuana, Rep. Roger Goodman, D Kirkland, "the federal government 
will intervene."

Another issue is whether the Liquor Board should limit the number of 
licenses. Espegard again argued no. The new industry needs to 
out-compete the black market. Limiting entry hobbles it. But the 
board may limit entry in order to satisfy Holder that Washington is 
not supplying other states.

Then there is land use. I-502 limits marijuana shops within 1,000 
feet of schools, parks, recreation centers, child-care centers and 
libraries. In Seattle, the mayor's office has a preliminary map of 
what's left, and it's not much. There are a few spots - the Port of 
Seattle could have a marijuana emporium at Pier 90-91 - but only in 
the Sodo neighborhood is there a large area.

Finally, taxes. On an industry that is supposed to run its untaxed 
rival out of business, I-502 imposes a 25 percent state tax at least 
twice. Speaking to the Liquor Board, Philip Dawdy of the Washington 
Cannabis Association said, "You need to relax these taxes."

Probably so. The chairman of the House Finance Committee in Olympia, 
Rep. Reuven Carlyle, D-Seattle, has said on his Web page that the 
marijuana tax may not raise the revenue the state expects, and that 
the Legislature may need to adjust it.

The Liquor Board and the Legislature have some decisions to make.

"It is almost impossible for them to get it right the first time," 
says the Washington Cannabis Association's Ezra Eickmeyer, one of the 
eight lobbyists now working the Legislature for the marijuana 
industry. "I think people have to be patient with them. It's going to 
take a couple of years to get this to work out."

Delay, red tape, uncertainty - and still there is excitement. The 
talk is of a statewide industry based on the craft-beer and 
craft-distilling model, with indoor growing of exotics like Old Toby, 
an ultra-high-THC strain developed for the medical market by breeder 
Matthew Gordon of Whidbey Island.

For McGinn, it's another new industry, adding to what Seattle area 
entrepreneurs have done with coffee, chocolate, bread, potato chips, 
ice cream and cupcakes.

It begins here.
- ---
MAP posted-by: Jay Bergstrom