Pubdate: Wed, 09 Apr 2014
Source: Washington Post (DC)
Page: A3
Copyright: 2014 The Washington Post Company
Contact: http://mapinc.org/url/mUgeOPdZ
Website: http://www.washingtonpost.com/
Details: http://www.mapinc.org/media/491
Author: Reid Wilson

GROWING IS SLOW FOR WASHINGTON STATE'S MARIJUANA INDUSTRY

Stores Yet to Open, 16 Months After Vote

Seattle - Drive down virtually any thoroughfare here and you are
likely to pass several medical marijuana dispensaries. On Rainier
Avenue, in southeast Seattle, the Northwest Cannabis Market sits
between a fish store and an Italian bakery. A mile or so down the
road, another dispensary occupies an old drive-in burger stand. There
are about half as many medical marijuana dispensaries in Seattle -
about 200 - as Starbucks locations.

But 16 months after voters approved legalizing marijuana, buyers still
need a medical prescription to score some dope. State regulators are
still crafting rules and combing through thousands of applications for
growing and retailing licenses.

The state Liquor Control Board, tasked with overseeing marijuana
sales, estimates that the first store will not open until July, with a
total of 334 stores eventually expected to receive licenses.

The slow pace of marijuana legalization in Washington stands in
contrast to Colorado, which began allowing retail sales of the
substance on New Year's Day.

The delay in Washington is a product of ambiguously worded 15-year-old
legislation and strict regulations that will govern marijuana growers
in the state. The lag time has heightened tensions between the state's
thriving medical marijuana industry and new retail sellers, while
costing the state millions in lost tax dollars.

"There's people that are spending money and taking risk" to set up
retail stores, said John Davis, chief executive of the Northwest
Patient Resource Center, a Seattle medical marijuana dispensary. "The
Liquor Control Board being all over the place, this could very easily
turn into a lawsuit."

Part of the blame for the delay rests with the authors of a 1998
ballot initiative that legalized marijuana for medical use. That law
allowed patients to possess up to a 60-day supply of marijuana -
though what constituted a 60-day supply was never defined.

The medical marijuana industry has existed in a state of legal limbo
here for more than a decade. Dispensaries, which technically operate
as "collective gardens," operate without state regulations. Some pay
their fair share of sales taxes to the state; others don't.

The authors of the 2012 legalization measure - Initiative 502 -
created a far more regimented structure. Under the new law, marijuana
is treated like alcohol; retailers cannot grow their own product, and
they cannot win a license to sell the drug without a property rental
agreement.

Colorado's medical marijuana industry, on the other hand, had the most
sophisticated set of regulations in the country, and the ballot
measure voters passed in 2012 required the kind of vertical
integration that Washington's system prohibits. Instead of preventing
them from growing their own crop, Colorado requires retailers to grow
at least 70 percent of everything they sell.

In Washington, the Liquor Control Board has moved quickly to establish
the rules that will govern marijuana sales. Those rules require retail
stores to be located away from venues that cater to minors, such as
schools.

But the board was overwhelmed by the more than 2,000 applications, and
up to half of them were lacking required information, according to
Liquor Control Board spokesman Brian Smith. The board allowed
applicants time to submit missing data, adding weeks to the permitting
process.

"The LCB, to their credit, has really been bending over backwards to
help" retail applicants, said Alison Holcomb, the criminal-justice
director at the Washington branch of the American Civil Liberties
Union and the campaign manager of the successful marijuana initiative.
"They didn't really have a good idea of how many applications they
would get."

A lottery system will determine which applicants will receive licenses
to begin operating by July. Those who win the lottery will have to
show proof they have secured a lease for retail space, get
fingerprinted for background checks and pass the licensing process. In
many places, demand hugely outpaces supply; in Seattle, 411 retail
hopefuls applied for just 21 licenses.

That means at least 90 percent of the medical distributors operating
now will not be allowed to sell to retail customers. That is why the
medical marijuana industry was one of the heaviest spenders against
the legalization initiative. Some medical marijuana dispensers say
their businesses are being put at risk by less experienced retail
applicants who do not necessarily know what they are doing.

"Everyone is leaping into the green rush," Davis said. "We're weighted
exactly evenly with the people who are just trying to take advantage
of the system."

Marijuana legalization also poses an experiment for law enforcement
officials. Several jurisdictions, including Seattle's King County,
backed off prosecuting low-level marijuana crimes even before the
legalization vote. Now law enforcement officials are weighing how they
should respond to cases such as a sale between two individuals, which
is still illegal.

"Do we care? Are we going to arrest that person and prosecute that
person? What if that person sells to minors? Then we might care," said
Dan Satterberg, the King County prosecuting attorney. "There's real
conflicted expectations on what law enforcement's role is going to be
going forward."

Both private businesses and state government stand to make millions of
dollars when sales of marijuana for recreational use begin. Washington
budget officials estimate the state will reap about $134 million in
tax revenue from marijuana sales in the 2015-to-2017 biennium.

But those projections could prove overly optimistic. Colorado
initially estimated that taxes and fees from marijuana would generate
$134 million in the upcoming fiscal year. Officials now say that
figure was about $20 million too high.

It is also not clear whether businesses allowed to open in Washington
will have anything to sell at first. The state has approved just eight
grower licenses to businesses in the state - all marijuana sold in
retail outlets must be grown in Washington - though the Liquor Control
Board is nearing final inspections on three dozen more.

"If I'm given a license, sure, I'll open my doors to let people come
down and film my empty shelves. There's not going to be much supply to
begin with," Davis said. "There's nothing easy about the cannabis industry."  
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MAP posted-by: Jo-D