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December 24, 2013 at 12:28 PM

Legal pot business has entrepreneurs bullish

After a big surge over the last week, Washington state has now received applications for 3,746 marijuana business licenses.

While some applicants are likely to be eliminated by residency requirements, background checks and improper locations, Washington state appears bullish about the legal marijuana business.

The 30-day window to apply for growing, processing and retail licenses closed on Dec. 20. But data released Tuesday by the state Liquor Control Board is not the final tally, as not all applications have been processed.

Growers have applied for licenses in 38 of 39 counties, with only tiny Garfield County (pop. 2,266 in 2010 census) not in the game. Applications for retail stores in cities such as Seattle, Tacoma and Vancouver far exceed the number of state-allocated retail shops in those cities.

In all, entrepreneurs have applied for 867 retail licenses. The state allocated a total of 334 retail licenses.

Seattle would get just 21 retail shops under state rules. But entrepreneurs have filed 145 retail applications for Seattle. Some of those won’t pan out, like the applicant who listed the Central Library’s address for a shop. Stores must be stand-alone businesses, and no pot businesses can be within 1,000 feet of venues frequented by youth, including libraries.

Still, Seattle will likely have more qualified retail applicants than allotted stores. If that occurs, the state will conduct a lottery to determine winners.

City Attorney Pete Holmes, a sponsor of the state’s legal pot law, has urged state officials to allow more stores in Seattle.

Other cities, including Tacoma and Vancouver, also appear headed for retail lotteries. Vancouver has 55 applications for 6 stores; Tacoma has 46 for 8.

Overall, producer or grower applications were the most popular with 1,670 applications. Processing was next with 1,209 applications.

There are no limits on the number of growers the state will license. But the state plans to license 2 million square feet for farms – and looks to have a glut of growers.

Growing licenses are divided into three tiers based on size, with the smallest farms occupying a maximum of 2,000 square feet, and the largest farms capped at 30,000 square feet.

If all applicants were approved and used their maximum licensed space the state would have more than 25 million square feet of pot farms. If all applicants hit the midpoint of what they’re allowed, the total square footage of licensed farms would be 12 million square feet.

If the state exceeds its 2 million square-foot goal, all growing licenses would be reduced by proportionate amounts to reach that total.

“Based on anecdotal evidence of what some of these applications look like, I think the licensing process will cull a good percentage, and the rigors of cannabis production and small business operation will separate the wheat from the chaff,” said Alison Holcomb, chief author of the legal pot law.

But she believes the Liquor Control Board should amend the rules limiting overall state square footage and the amount per license. “Many of these businesses are likely to fail, and we want to give the new legal market as strong an opening as possible,” she said.

The robust growing applications suggest the state’s supply of weed will meet projected demand in 2014.

State investigators plan to evaluate growing licenses first, so crops can be started as soon as possible in hopes of supplying retail stores by May.

Comments | More in Government | Topics: Initiative 502, liquor control board, marijuana


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