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Opinion Northwest

Join the informed writers of The Times' editorial board in lively discussions at our blog, Opinion Northwest.

February 25, 2013 at 6:30 AM

Opening a legal marijuana store in Seattle? Prepare to get gouged

As Washington’s Liquor Control Board bulls its way toward licensing hundreds of marijuana growers and retailers, there is a “green rush” of real estate hunting. And its definitely a seller’s market.

One unnamed party recently paid a $50,000 premium — above the lease rate — for a storefront outside of Seattle. Greta Carter, a Seattle marijuana activist passed on the tip, said the leaser paid it because the location was a prime spot, albeit grudgingly. “We’re accustomed to paying a premium in the cannabis industry, but you cross a line when you want $50,000 up front,” she said.

And it’s only going to be worse as legalized marijuana stores authorized by Initiative 502 come on line. To give I-502 a better chance of passing, it included 1,000-foot exclusion zones around schools, parks, transit centers, even game arcades. That excludes most of Seattle, as well as good chunks for dense Pugetopolis. This map  by Seattle Department of Planning and Zoning shows the I-502-friendly zones in yellow, and zones legal for medical marijuana dispensaries in blue. Other big cities, including Spokane, are working on similar maps.

Even if you find an urban, I-502-friendly sliver — notice that prime spot at 23rd Avenue and East Union Street on Capitol Hill? — finding landlords willing to talk to the marijuana industry shrinks options further. And if you’re real estate hunting for an I-502 storefront, you’ll need enough cash to tie up the parcel for a year or more; the Liquor Control Board is not expecting to issue marijuana retailer licenses until December, at the earliest.

But Tom Gordon, a real estate broker who specializes in the marijuana industry, said that hasn’t slowed interest. “There’s probably 10-12-15 people calling on the same property, people from out of town,” said Gordon, of I-5 Realty.

He said landlords are charging 150 percent to 200 percent premiums for properties. And despite the interest in the retail storefronts, Gordon said finding lease space for growing operations will be toughest, because those spaces will likely require a change-of-use permit and capital investment of $200,000 or more to make them capable of large-scale growing.

He said he’s most often looking for commercial spots outside King County, because density increases the number of schools, etc. — and the number of exclusion zones. “You start drawing those circles around excluded spaces, and there’s just not that many spots in King County.”

Is the 1,000-foot rule too restrictive? Rep. Chris Hurst, the Enumclaw Democrat and chair a committee taking the lead on I-502, seems to think so. He told The News Tribune’s Jordan Schrader:

“You can’t have a legitimate market unless you can put the illegitimate market out of business. If you have major gaps in availability, who is going to fill that? Well, it’s going to be immediately filled by criminal enterprises… If you’ve got to drive 75 miles to find it, that isn’t going to work.

Alison Holcomb, the primary architect and campaign manager for I-502, also supports an easing of the 1,000 foot rule. At a marijuana chat with Seattle Police spokesman Sean Whitcomb at Greenwood’s Naked City Brewing, Holcomb said the Legislature should shrink the buffer zone to 500 feet, consistent with siting restrictions for liquor stores. That is a more reasonable restriction.

It seems unlikely to happen this year: Friday was the Legislature’s cut-off for bills not vital to the budget, and amending I-502 would require a two-thirds vote.

But it’s interesting to see the new politics of marijuana. At the Naked City even, Holcomb was clearly speaking to the choir. Just before she proposed that pot-friendly change, an enthusiast grabbed the microphone.

“Alison Holcomb for Mayor, everybody.” The crowd cheered. “She can win! She can win!”

Comments | Topics: initiative 502, marijuana

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