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Originally published April 2, 2014 at 8:49 PM | Page modified April 2, 2014 at 9:43 PM

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Retail pot-store openings move to early July

State officials unveiled a lottery plan for retail pot-store licenses and said stores won’t open until July, partly because applicants have been unprepared and unresponsive.


Seattle Times staff reporter

The state’s first licensed marijuana growers

The state has issued eight licenses to grow pot to these businesses:

Sea of Green Farms, Seattle

Cannaman Farms, Vancouver

Downtown Cannabis Co., Pacific

Farmer J’s, Spokane Valley

Kouchlock Productions, Spokane

Nine Point Growth Industries, Bremerton

O2 Sun, Benton City

Highwater Farms, Shelton

Liquor Control Board

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Retail pot stores are now expected to open in early July, state officials said Wednesday, blaming delays in the licensing process on unprepared and unresponsive applicants.

In unveiling a lottery plan to determine retail-license winners, the state’s marijuana project director said about 500 of the 2,180 retail applicants have not responded to requests for basic information, despite repeated outreach by the state Liquor Control Board (LCB). Those applications are now considered null by the state.

There may be even more retail applicants who have not provided five basic pieces of information — such as proof of age and residency — required by the state, and they will be disqualified. Project director Randy Simmons said he’ll know next week how many of those applications will be terminated.

Simmons and LCB Chairwoman Sharon Foster predicted in February that stores would open in June, after revising forecasts for May openings.

“It looks slow on the outside, but not on the inside,” said Becky Smith, the LCB’s licensing manager.

Just eight pot growers have been licensed since March 5, the first a Spokane entrepreneur. Smith said the LCB is ready to conduct final inspections on an additional 36 growers. But more than half of those applicants have asked for more time because they haven’t yet built out their space or gotten their security systems in place, she said.

State officials said they know they’ll be compared to Colorado, which also approved legal marijuana in the November 2012 election. Colorado started opening stores in January, leaving some applicants and wannabe consumers grousing about Washington’s slower pace.

“I think we all hoped for an earlier start,” Foster said. “But I’m very happy where it is right now. I have a twinkle of hope for the last week of June.”

Colorado’s system had advantages over Washington’s, board member Chris Marr said.

Medical marijuana is highly regulated in Colorado — unlike Washington. And all licenses allotted in Colorado have gone to the medical entrepreneurs who were already established.

Retail stores that weren’t previously medical shops won’t open in Colorado until July, Simmons said, parallel with Washington’s schedule.

“No one in the world has done this,” said LCB Director Rick Garza, of Washington’s legal pot system. “Colorado has not done what we’re doing.”

The LCB has created more work for itself. Three months ago, it said it intended to disqualify 500 retail applicants who hadn’t listed a permissible address more than 1,000 feet from venues frequented by youth. But the LCB reversed course a month later and allowed those applicants more time to find other locations, leading to more review work by its staff.

Marr noted that only eight stores opened in Denver on Jan. 1. Dozens of other businesses have rolled out over time.

Consumers should expect a similar, staggered flow of new pot businesses in Washington, LCB officials said. And because few stores likely will be open in early July, officials also suggested consumers should expect limited supply and higher prices at first.

Before any stores can open, growers need about three months from the time they’re licensed to grow, harvest and cure the pot to be sold in the 334 retail stores the LCB plans to license.

But about a quarter of all prospective growers are reworking their applications, Simmons said, with most changing ownership structure.

“Right now it’s just delay, after delay, after delay,” Smith said. She said applicants are changing their ownership because they need financing; some had assumed they’d get bank loans, which they’re not; and more thought they could get financing from outside of Washington, which they can’t under state rules.

The LCB will freeze those applications for now, so staff vetting applicants can shift their attention to those who are ready.

Because officials still expect the number of qualified applicants for retail stores to exceed the 334 shops allowed statewide, they plan a lottery to determine winners in cities such as Seattle. The state allotted 21 stores to Seattle and received 411 retail applications in the city.

The LCB will remain at arm’s length from the lottery, Simmons said. It will be conducted by a Seattle auditing firm, Kraght-Snell, and the Social and Economic Sciences Research Center at Washington State University. Applicants will be coded by number for the lottery, and the double-blind process — meaning neither the auditor nor WSU will know which names are associated with which numbers — will occur in late April.

The coded ranking of applicants will be put in tamper-proof, sealed envelopes and placed in a safe. An official from the state Treasurer’s Office will open the envelopes, Simmons said.

The process will not be viewed by the public. Results will be posted to the LCB website May 2.

Bob Young: 206-464-2174 or byoung@seattletimes.com



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