Spokane Journal of Business

'Green rush' set to boom

Prospective Spokane-area marijuana retailers vie for licenses

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-—Staff photo by Katie Ross
Jesse Tilson and Sean Forcier, co-owners of Dr. Greenthumb medical-marijuana outlet, have applied for a retail license.

As the license application deadline for growing, processing, or selling marijuana in Washington state approaches, the number of Spokane County retail applicants is almost twice the number of retail licenses the county has been allotted.
As of Dec.17, a total of 34 retail applications, 99 producer applications, and 77 processor applications had been filed for Spokane County. Licensees have until Dec. 20 to submit requests to the state Liquor Control Board.
The number of retail licenses allotted to a county is based on population, says Brian Smith, Olympia-based spokesman for the agency. Spokane County will be allocated a total of 18 retail licenses: eight in Spokane, three in Spokane Valley, and seven elsewhere in the county, he says.
“If we get more licenses than what we’ve allocated for, it will be decided by lottery,” Smith says.
There is no cap on the number of producer and processor licenses, Smith says, as long as the licensee meets the requirements.
License applications filed in Spokane County include proposed business names such as Funky Farms, Treehouse Club, Herban Myth, High Country Potperrie, Mr. Nice Guy, and Tranquil Buddha.
  The process for acquiring a marijuana license for all three categories is similar to that for a liquor license. A licensee pays a $250 application fee.
If approved, renewing a license costs $1,000 annually.
The liquor control board lists the three previously mentioned kinds of marijuana licenses: producer, processor, and retailer. A producer is a wholesaler of marijuana, and that license allows for production, possession, delivery, and distribution.
A processor is a business that processes, packages, and labels marijuana and marijuana products for sale. That license allows for processing and packaging in addition to possession, delivery, and distribution.
As the name suggests, a retailer actually sells marijuana and marijuana products to customers. Retail outlets may not employ anyone under 21 or allow anyone under that age to shop there.
Under voter-approved Initiative 502, the producer and processor, as wholesalers, both pay a 25 percent excise tax, which is a tax paid on a specific good, and a business-and-occupation tax on all sales.
The retailer also pays a 25 percent excise tax and business-and-occupation taxes. It also collects state and local sales and use tax, which is paid by the customer.
Smith says a total of 334 retail outlet licenses will be issued in the state. Smith also says that a business can apply to be both a producer and a processor. However, the law doesn’t allow for a processor or producer to also be a retailer, or vice versa.  
Some of those here who have applied for a retail license are currently owners of licensed medical marijuana dispensaries. The future of medical marijuana outlets is up in the air, and many owners of such outlets are nervous about the future.
Darren McCrea, owner of Spocannabis, at 120 E. Mission, and a longtime medical marijuana advocate here, says he believes medical dispensaries will cease to exist. McCrea has applied for a retail license, so he can continue supplying patients with cannabis should this happen.
“I believe the  liquor control board is going to do away with collectives such as myself,” he says. “That’s my reasoning for applying for retail.”
Jesse Tilson and Sean Forcier, co-owners of Dr. Greenthumb medical dispensary at 122 N. University in Spokane Valley, have applied to be a retail marijuana outlet under the name 509 Stop N Shop, even though they contend the industry will be a detriment to those seeking marijuana for medical purposes.
“Retail is just going to push medical out,” Forcier says. He says the two applied for a retail license to ensure they can still provide their patients with cannabis, should they be forced to close the medical dispensary.
“We also want to find out how the recreational side goes,” he says. “We applied like the second day it opened.”
The liquor control board is considering a set of recommendations for medical marijuana that it will decide in January whether to pass on to legislators, or not. Provisions in the recommendations include that those ages 18 to 20 can access medical marijuana with the proper authorization, and those under 17 can with authorization and parent or guardian consent.
It also recommends giving state and local sales and use tax exemption to those with a medical marijuana card. Medical marijuana currently isn’t taxed.
The recommendations also state that the medical and retail marijuana sectors should merge under a single system for producing and processing, and only retailers with an endorsement could accept medical marijuana cards. This is something that doesn’t sit well with Tilson and Forcier, who don’t wish to sell to customers who don’t have a legitimate medical need.
“I don’t want to sell to just anybody,” Forcier says.
Tilson says, “They’re taking people who have been in the medical community for 20 years and trying to force them into retail. The industry is going to lose all of its quality through people who are just trying to get stoned for no reason. As of right now, we have a really close relationship with our patients, but if anyone can walk in here, that’s not what we’re trying to do. We’re like a family; it’s just sad to me, what they’re trying to do.”
Right now, Forcier says, their customer base consists mostly of cancer patients and people with chronic pain or serious injuries who don’t like or can’t tolerate other pharmaceuticals. Patients must have a prescription from a doctor, just like any pharmacy, Forcier says. However, he also admits that there are those who work the system.
“It’s an amazing medicine, but there are people who abuse it,” he says.
Tilson, Forcier, and McCrea all say that with the passing of I-502, it will be unlawful to operate a medical and retail business in the same facility. Ideally, all three say they would like to remain medical dispensaries, but don’t know if that will be possible.
“I would like to see the medical and recreational stay separate,” McCrea says.
I-502 also limits the number of plants a medical marijuana dispensary can have at a time, McCrea says. Once a patient obtains a “green card” from a sanctioned medical provider, he or she can grow up to 15 plants.
The users then can pool their plants to form a collective dispensary. McCrea says under the new law, medical users will be allowed to grow only six plants.      
“With 15 plants, you can keep up a good growing and harvesting cycle,” he says. “You can’t with six.”
Dr. Greenthumb and Spocannabis both stock a variety of products beyond just marijuana for smoking.
They carry lollipops, other candies, soda drinks, pills, hot sauces, beef jerky, brownies, oral sprays, and even bath salts, all of which contain chemicals extracted from cannabis.  
I-502 makes it legal for anyone over the age of 21 to possess either one ounce of usable marijuana, 16 ounces of marijuana-infused product, or 72 ounces of liquid marijuana-infused product.
It still is illegal for anyone under the age of 21 to possess marijuana, or for anyone over 21 without a retail, producer, or processor license to possess more than those quantities.
Tilson says he doesn’t believe I-502 is going to get rid of the illegal marijuana market.
“I think it’s going to boost the black market,” he says. “Why would someone go to a store and buy a gram for $17, with tax, when you can walk down the street and buy it from some guy for less?”
He adds, “We are a real industry; we aren’t drug dealers. We love this industry and this God-given flower.”
Forcier says, “We’re not here to make a million dollars. We just want to help our patients.”
McCrea says that while he worries about the effect I-502 will have on the medical marijuana outlets, overall he is supportive of the law.
“It’s a step forward in all areas; it’s going to bring about education,” he says. “Everything takes a minute, but it’s going to provide education, and people will benefit from that.”
McCrea recalls an incident during the 2006 Bloomsday race, when he and other supporters stood at the top of Doomsday Hill and handed out fliers supporting the legalization of marijuana.
“People were yelling back at us that it would never be legalized,” he says. “It’s been the lack of education that’s been hurting us.”
Forcier agrees that there is more education about marijuana today, something that will certainly help the industry once it gets off the ground.
“I have a feeling it’s going to be huge,” he says. “We’re in a new age now. There’s more understanding. It’s like when Prohibition went down.”

Katie Ross
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Reporter Katie Ross covers manufacturing, hospitality, and government at the Journal of Business. An outdoor enthusiast and snowboard fanatic, Katie is a recent graduate of Gonzaga University.  

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