November 24, 2014 at 2:41 PM

Mayor releases plan for medical marijuana in Seattle

Mayor Ed Murray's office outlined its plan for the medical-marijuana industry this afternoon. The plan calls for licensing of recreational and medical-marijuana businesses and creates regulations for medical-marijuana providers.

The mayor's plan would establish a regulatory system for medical similar to that of the state's recreational system in that it sets standards for testing, packaging and advertising. It would require criminal background checks for business owners and require businesses to allow inspections by the city.

The new system calls for two classes of collective gardens. Class 1 collective gardens would operate with dispensaries; class 2 collective gardens would not and aren't subject to many of the more restrictive requirements such as testing.

The class 1 dispensaries would have to be 500 feet from childcare centers, schools, parks, libraries, transit centers and recreation centers, but there don't appear to be limits for class 2 gardens, which would only allow 45 plants on each parcel.

Class 1 collective gardens are required to test for potency (including CBD), as well as pesticides, mold, fungus and heavy metals. Pesticides and heavy metals tests are typically more expensive than the testing the state’s Liquor Control Board requires for recreational marijuana.

The outline also calls for a separate processing license that establishes packaging requirements for edibles and adopts the state Liquor Control Board's rules for concentrates.

Although state-licensed recreational producers would also be licensed by the city, they would not have to adhere to any special requirements.

"We’re looking to transmit this to City Council sometime in December," said David Mendoza, who advises the mayor on marijuana policy. "It’s on their calendar from that point."

Mendoza said the Finance and Administration department would handle licensing marijuana businesses and be responsible for inspecting and levying fines. Fines would range from $500-$2,000. According to the outline, licenses could be suspended or revoked for "egregious violations of rules."

Mendoza said selling multiple times to a minor or person without an authorization card would qualify as an egregious violation.

Last Friday, State Sen. Jeanne Kohl-Welles began to promote her plan to rectify recreational and medical marijuana this Legislation session. Jason Kelly, a spokesman for the mayor, said that doesn't mean Murray is giving up on a statewide solution.

"The mayor is hopeful the legislature will act this year, but even if they act quickly there’s still a lengthy rulemaking process at the state level," said Kelly. "The mayor wants to have a local ordinance on the books here so we can eliminate the uncertainty that exists for patients and dispensaries."

The outline.

November 24, 2014 at 7:57 AM

IRS advisory council says it's OK for tax pros to help pot businesses

An advisory council to the Internal Revenue Service recommended in a report last week that the agency allow tax professionals to work with marijuana businesses in compliance with state law.

The council suggested the IRS publish guidance to "promptly clarify that a tax professional will not be considered unethical, will not be targeted for audit, and will not be in violation of Treasury Circular 230 solely for representing or preparing a return for a business that is illegal under federal law but legal at the state level under state law."

Treasury Circular 230, which is mentioned in the recommendation, contains something akin to a code of conduct for tax preparers.



November 24, 2014 at 7:21 AM

Seattle to get new billboard urging parents to take care with pot

Drivers traveling on Highway 99 this week might notice something new in the Georgetown neighborhood: a billboard advocating adults keep pot out of kids' hands.

The Marijuana Policy Project announced in a news release Monday morning that it would launch the billboard this week as part of its consume responsibly campaign.

The billboard shows a young child peering over a counter at some cookies and a class of purple liquid. The liquid could be juice or wine. The cookies could be pot-infused or just grandma's famous chocolate chip. The billboard pushes parents to "keep 'adult snacks' locked up and out of reach."

The ad associates the dangers of marijuana with those of alcohol, a tactic pot advocates have been using more often in public messaging.

“Issues such as over-consumption and accidental ingestion are not unique to marijuana, and a lot can be learned from how we handle other legal products," said MPP spokesman Mason Tvert in the news release. "These problems can be addressed by raising awareness and informing adults about steps that should be taken to prevent them.”

The billboard will be located near 5400 East Marginal Way.

November 21, 2014 at 7:13 PM

State Sen. Kohl-Welles outlines bill to transform marijuana regulation

State Sen. Jeanne Kohl-Welles plans to propose a bill that would regulate medical and recreational marijuana in a single system, allow home growing of six marijuana plants for all adults 21 and older and slash pot taxes.

Kohl-Welles, D-Seattle, said she is vetting the bill's outline with stakeholders and legislators, but planned to pre-file the bill next month ahead of the legislative session in January.

"We have a regulated recreational system, but not for medical marijuana," said Kohl-Welles. "We've got to take a new look at this."

The bill would fold medical marijuana into the state's regulated system. Collective gardens would be phased out by Aug. 1, 2016, but medical growers who have business licenses and are paying taxes could apply to grow in the new system. The bill would remove the state's limit on recreational stores, so dispensary owners could apply to own a store.

Kohl-Welles' approach would radically alter the state system's tax structure. Current excise taxes are applied at every rung of the supply chain, from producer to processor to retailer. The bill would consolidate taxes at the three levels of the production process and collapse them into one, paid at the retail point of sale.

Kohl-Welles said the tax would be renamed "so businesses involved would be able to deduct expenses from federal taxes." Right now, marijuana businesses pay federal tax on gross sales, before state taxes are paid.

High-CBD products, typically used by medical patients, would be given a tax break, eliminating the need for most patients to have authorizations, Kohl-Welles said. In special cases, such as those seeking high-THC pot for medical problems or parents who want access for their kids, patients could get medical exemptions from the state Department of Health.

"It’s like a mini registry, but only for those people who want to (participate)... it’s not requiring everybody," said Kohl-Welles.

The bill would reduce the so-called 1,000-foot buffer rule that disallows marijuana businesses within that distance from schools, parks and other places kids congregate. Kohl-Welles said a 500-foot buffer would allow businesses to more easily find locations to operate. Local governments could extend the limit back to 1,000 feet if they desired.

Kohl-Welles' plan would allow third parties to deliver pot from growers to retailers and calls for licensed delivery. It establishes a state cannabis board and research licenses for studying pot. The bill will also seek to encourage local governments to allow pot businesses by sharing revenue only with those jurisdictions that participate in the industry.

Kohl-Welles said she thought her bill would appeal to legislators because it's simple and doesn't direct where revenue goes.

"The bills we had last year were much more complex than this. This is pretty straightforward," she said. "I’m just trying to come up with good, strong rational policy ."

Medical marijuana industry advocates said they wanted to see the full bill before they gave it their support, but saw some elements they liked.

"From what I've seen so far, yes, I believe I would support it," Vivian McPeak, the executive director of Hempfest, said in an email. "This potential legislation is the best approach I've seen come out of Olympia so far at harmonizing the disparities between our medical and recreational cannabis industries in Washington state. Senator Kohl-Welles has taken time to hear the patient community."

Industry lobbyist Philip Dawdy said he was glad to see home growing would be allowed, but wanted to see the language of the bill before deciding. Sen. Kohl-Welles has been a leading advocate for medical marijuana, Dawdy said, but he doubts her bill will be alone this session.

"You’ve got to measure all of this against a new reality in Olympia," he said. "The Republicans are in charge in the Senate and (Sen.) Ann Rivers is their go-to on this issue and she’s working on legislation herself."

Rivers on Friday said she wasn't prepared to comment on Kohl-Welles' proposal.

November 21, 2014 at 4:24 PM

3rd judge rules cities and counties can ban marijuana businesses

A Benton County Superior Court judge ruled that local governments can ban recreational pot businesses, according to a news release from the state Attorney General's Office.

It's the third ruling that supports localities preventing pot businesses from operating, and it hews closely to the informal opinion presented by state Attorney General Bob Ferguson earlier this year.

"Three judges in three different parts of the state all ruled from the bench. None of them said we need more time to think about it," Ferguson said about the judges' rulings. "If those who wrote the legislation wanted to require jurisdictions to sell marijuana, they should have said so."

The issue is expected to be brought before the state Supreme Court early next year.

Ferguson said the Legislature should consider adopting incentives for municipalities to allow marijuana businesses. That approach would call for the state to share legal recreational-marijuana revenue with cities and counties. Those choosing not to allow pot businesses wouldn't benefit.

November 21, 2014 at 12:28 PM

City on track for proposed medical marijuana legislation by end of year

The city of Seattle hosted a medical marijuana forum Thursday night as it prepares to change how it regulates the industry. The forum included industry activists, health-care officials, laboratory experts and other stakeholders.

David Mendoza, who advises Mayor Ed Murray on marijuana issues, moderated the event and reiterated the mayor's commitment to addressing the issue.

"We will have legislation on medical marijuana by the end of the year," said Mendoza. "The mayor will have a more specific announcement in a week or so."

Although medical-marijuana businesses are proliferating, they operate in a legally gray and largely unregulated space in Seattle. Medical marijuana operators and stakeholders discussed industry challenges and how they hope the city approaches regulation in wide-ranging panel discussions on marijuana testing, labeling, location issues and community impact.

Panelists pushed for better testing of medical marijuana, but cautioned against following the Liquor Control Board's testing model in the recreational market.

"(Initiative) 502 came along at a time to regulate one specific use (recreation) of one type of end product," said Jeremy Kaufman, a board member of the Coalition for Cannabis Standards and Ethics.

"We need to really look at the regulations, look at 502, talk not just to lab folks, but to patients," said Bobby Hines, who co-owns Confidence Analytics, a testing laboratory. Hines said data from the recreational market show more than 10 percent of samples fail Liquor Control Board standards. Hines said his tests highlight the need to educate growers on how mold and bacteria can proliferate in growing environments.

In a discussion on edibles and packaging, Dr. Leslie Walker of Seattle Children's said the hospital has seen a "steady increase in marijuana toxic ingestion" among kids. She and other panelists pushed for labeling standards that hewed closer to what the state requires in the recreational market.

"Child-proof packaging should be a requirement," said Ben Reagan, of the Center for Palliative Care.

Kristin Nevedal of Americans for Safe Access said testing requirements for medical marijuana must be addressed for labeling to be effective for patients.

"Until we have standardized lab testing in the medical marketplace, we're going to have a hard time with standard labeling," she said.

A discussion of mapping and distance requirements showed how difficult it is to locate marijuana businesses. Although marijuana is illegal at the federal level, the government has indicated businesses need to be 1,000 feet from schools, said John Schochet of the City Attorney's office. But Schochet said the feds have changed priorities over the past few years and are difficult to interpret.

"There aren't clear legal answers," said Schochet.

Oscar Velasco-Schmitz, who founded the Dockside Co-Op, said it's difficult but not impossible to find a location that adheres to Seattle zoning rules and federal guidelines.

He said it's crucial for marijuana businesses to "go see who your neighbor is" and be connected to the surrounding community.

In a discussion on race and youth, panelists argued that racial disparity still leaves some communities, and kids, hurting.

Karen Pillar, an attorney at Team Child, said black children are expelled and suspended for drug offenses at rates several times the average. She said expulsion is a "death penalty" for student's education because it emphasizes disconnection when kids need help. "It's exactly the opposite of what we need to do."

November 21, 2014 at 9:23 AM

Pot shop could be coming to Capitol Hill, once thought forbidden territory

Many thought Seattle's Capitol Hill neighborhood would be a pot desert, devoid of  recreational marijuana stores, because state rules require they be at least 1,000 feet from schools, parks, and other venues frequented by kids. With those requirements, it didn't appear Capitol Hill would offer territory for pot proprietors.

But one of the 21 Seattle applicants selected in the state's lottery for retail marijuana store licenses has applied for a location in the neighborhood. Sam Burke hopes to open a marijuana store at 15th Avenue and East Republican Street in Capitol Hill. The proposed store would replace a veterinary clinic next to the Hopvine Pub and across the street from Caffe Ladro, a coffee shop.

A Seattle Times news partner, the Capitol Hill Seattle blog, first reported the possibility Monday.

Burke said he was eager to discuss his plans for the possible store, but wanted to wait until his location was approved by the city of Seattle.

"I’ve tried three different locations," said Burke. "I'm hesitant to make any comments until I know I'm going to locate there."

Right now, the state Liquor Control Board and the city are both reviewing Burke's application. The Liquor Control Board gives cities 20 days to approve or raise objection to proposed locations. Burke said he's cautiously optimistic, but "until we get through that 20-day period, we don't know."

Ben Livingston, a pot activist turned real estate broker whom Burke credited with finding the prime real estate, said the fear is that an unknown park or other prohibited venue would ruin Burke's plans.

"It's all a little tenuous at this point. It's uncertain like anything. Hopefully it will go through," said Livingston. "There could be any number of things within that 1,ooo-foot radius, and I don’t think there is, I’ve mapped that radius."

According to documents from the LCB, an initial analysis of the corner showed it was within 1,000 feet of the Parkside School Daycare. But Burke and Livingston were able to prove an error with the parcel lines on the state's map.

A preliminary city review of the location turned up no problems, according to the LCB documents.

In an email within the documents, Cherie MacLeod, the city of Seattle's marijuana coordinator said "nothing obvious popped up" as far as problems at that location, "but it's possible that there's an unfound disqualifying business/location."

If Seattle approves Burke's application, Livingston said, a group of investors will buy the veterinary clinic. How much will they pay? "It's above market rate, let's just say that," said Livingston. Burke plans to rent the space. According to the LCB documents, he'll be the sole proprietor of the store.

Capitol Hill seems ideal for a pot shop. A nightlife hub, the neighborhood is among the youngest and most densely populated in Seattle, according to census data. About 13,600 people 21 and over live within a half mile of Burke's proposed location, more than any of the six Seattle stores already licensed by the Liquor Control Board.

Of Seattle's licensed stores, Uncle Ike's Pot Shop in the Central District has the most people within a half mile with about 9,750. Fewer than 50 people live within a half mile of Ganja Goddess, which opened recently in the Sodo Neighborhood.

Burke said he should know if the city has approved his application next week.

Until then, "I’m one of those people where if you talk about it, you’ll jinx it," said Burke.

Times researcher Gene Balk contributed to this report.

November 18, 2014 at 5:00 AM

Investment firm behind Leafly to launch 'global brand' with Bob Marley's family

Seattle's Privateer Holdings, an investment firm that finances pot-related businesses, will partner with the family of reggae singer Bob Marley to launch a "global" brand called Marley Natural, which will call New York City home. The company plans to hire about 25 people to begin work on developing the Marley brand and products.

Brendan Kennedy, the CEO of Privateer, said his firm was approached more than a year and a half ago by the Marley family, who he said "had been thinking about the cannabis industry for years."

Marley Natural plans to offer "heirloom Jamaican cannabis strains inspired by those Bob Marley enjoyed" in places where pot is legally allowed late next year, according to a news release. It will also offer pot-infused tinctures, lotions and pot accessories.

“Marley Natural is an authentic way to honor his legacy by adding his voice to the conversation about cannabis and helping end the social harms caused by prohibition,” said Cedella Marley, Bob’s daughter, in the news release. Privateer's backing and its global aim suggests the Marley family sees the new brand as a lucrative way to honor the musician's legacy, as well.

Kennedy said the family will receive a royalty payment and that they "participate in Privateer Holdings at the equity level." The family will also help "ensure Bob's voice is incorporated."

Privateer Holdings is best known for acquiring Leafly, a Yelp-like website for pot strains and stores, in 2011. It also owns Tilray, a Canadian medical-marijuana company. Recent SEC filings show Privateer is seeking up to $75 million in investor money. Kennedy said the company has raised about $50 million so far from more than 40 investors.

In the past, Privateer has avoided funding businesses in the United States that directly deal with marijuana because of federal law. Kennedy said that won't change and that Marley Natural will operate in accordance with federal law.

"To operate in Washington state, we would be able to market our accessories and ancillary products immediately and offer them for sale online or in retail stores," said Kennedy. "We don’t currently intend to apply for an I-502 producer, processor or retailer license. Not yet anyway."

Kennedy said the company could license out its brand to producers or processors already operating in Washington state.

"We have talked to a number of people who have some Jamaican (marijuana plant) genetics in Washington state already," said Kennedy.

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