State to Aspiring Pot Entrepreneurs: ‘This Is Your Window’

A few months ago, I talked with the longtime owner of a plant nursery in the Seattle area. Over the years, he had helped customers looking for products to use for their marijuana grows, and he thought: I could do that. He knew everything about plants, after all, and in recent years, while battling the vicious side effects of chemotherapy, had learned first-hand about the medical benefits of pot.

With the state now implementing legalization Initiative 502, he recognized “the big growth industry” in the offing. But as far as getting into the business himself, he said, “I’m not there yet.” He didn’t think he had the contacts at this point to distribute any marijuana he might grow, and there was the risk of federal enforcement to think about.

Yet here’s the thing he and others biding their time need to realize: Their time is about to run out.

Yesterday, the state Liquor Control Board approved more than 40 pages of regulations for individuals and organizations wanting a license to produce, process or sell marijuana. It’s easy to get lost in the complicated details. So some people might miss the fact that there is a 30-day window—potentially the only 30-day window ever to happen in this state—for entrepreneurs to apply for licenses. It begins on Nov. 18.

“If you want to get into the business, this is your window,” reiterates LCB spokesperson Brian Smith.

Smith explains that board members conceived of the window as a fair way to limit the number of marijuana businesses in the state, as they knew they must in order to protect public safety and avoid the wrath of the feds. “We’re walking a fine line here,” he says. He adds that Colorado had a similar window when it began licensing medical marijuana operations a few years back.

The LCB has said that it may reopen the window after seeing how well the system is working. If the market is under-supplied, then the board may give out more licenses, Smith says. He notes, however, “there are no guarantees.”

It’s an unusual market dynamic. But as Smith notes, “This is not like any other business market.”

One might perhaps look to the taxi industry, where the number of licenses is capped by the city and county. While there are big differences between the two industries—an individual can sell a taxi license on the private market, for example, something that is definitely not possible with pot licenses—both make getting a license something akin to winning the lottery. And in fact, the board will hold a lottery should the number of qualified entities applying for a retail license exceed 334, the statewide cap set by the board. (There is no cap on producer or processor licenses.)

At least the state has carefully considered who it wants to give a license. For the most part, those with criminal records are disallowed. One little-known provision, however, exempts individuals with up to two marijuana possession misdemeanors on their record.

This came in response to comments at public hearings held by the LCB throughout the state. “I’ve been working illegally for a longtime and I want to come into the state license system,” would-be entrepreneurs said according to Smith. They didn’t know if they could because of old charges.

The move might help some causalities of the drug war, who have at times suffered great costs for minor offenses. But it also serves the interest of the state, which has said that its success depends in part on bringing the illicit market under state regulation.

 
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