Pubdate: Wed, 08 Jan 2014
Source: Rome News-Tribune (GA)
Copyright: 2014 Associated Press
Contact:  http://www.romenews-tribune.com/
Details: http://www.mapinc.org/media/1716
Author: Gene Johnson, Associated Press

WASH. STATE FACES PROSPECT OF TOO MANY POT GROWERS

SEATTLE (AP) - Washington state could be facing a curious economics 
problem: too many pot growers.

According to updated figures released Tuesday, more than 2,600 
applications have been submitted to produce the marijuana that will 
be sold at statelicensed stores when Washington's legal marijuana 
industry opens for business around the middle of this year.

That's a problem because officials are, at least initially, capping 
total pot production at 2 million square feet, or about 46 acres. It 
remains to be seen how many applications are approved, but if it's 
even close to the number submitted, that could leave growers with 
less than 1,000 square feet apiece on average - not enough space for 
most to run an economically viable operation.

"It's going to be a challenge, no question about it," said Alison 
Holcomb, the Seattle attorney who drafted the legal pot law. "There 
are 10 times as many applications as we need."

The prospect of having too many growers isn't the only difficulty 
prompted by the overwhelming interest in the industry. Some 2,035 
applications have been processed so far for retail licenses, but the 
state is capping the number of pot shops statewide at 334. That means 
there are likely to be lotteries for those licenses in many areas.

In Seattle, where the state Liquor Control Board has allotted 21 pot 
shops, there have been 408 retail license applications. In Spokane, 
which will have eight marijuana stores, there have been 84 applications.

Board spokesman Mikhail Carpenter said it's premature to worry about 
the number of applications, because while the state is not capping 
the number of growers, no one yet knows how many will meet criteria. 
The board must screen each application to make sure the proposed 
locations aren't within 1,000 feet of schools, parks, daycares or 
other locations where children frequent. Officials must also conduct 
background checks on applicants and their financial backers.

"They haven't gone through the licensing process," he said. "We don't 
know how many are viable."

The board is issuing growing licenses of three tiers: less than 2,000 
square feet; 2,000 to 10,000 square feet; and 10,000 to 30,000 square 
feet. Under its rules, if the total amount of licensed growing canopy 
exceeds 2 million square feet, it may reduce by an equal percentage 
the space allotted to each grower, or apply those reductions to the 
growers in one or two of the tiers.

Holcomb called the glut of pot-growing applications "a real problem 
for the people that want to go into production."

"If you apply for a 30,000square-foot grow and incur all the expenses 
for the lease and buildout, you don't want to suddenly learn that you 
can only grow 2,000 square feet," she said.

Holcomb suggested the board should be prepared to raise the 
production cap of 2 million square feet, to ensure enough pot is 
produced to meet demand. It remains unclear how good the licensed 
growers will prove to be, and how much usable marijuana they'll 
actually produce from the 2 million square feet of canopy.

She noted that soon after recreational marijuana stores opened in 
Colorado Jan. 1, some had to close early due to limited supply. Some 
stores jacked up prices due to the first-day demand.

Some hopeful growers have applied for the maximum of three top-tier 
licenses, meaning they might have been planning to grow as much as 
90,000 square feet of cannabis.
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MAP posted-by: Jay Bergstrom