Pubdate: Tue, 11 Feb 2014
Source: Seattle Times (WA)
Copyright: 2014 The Seattle Times Company
Contact:  http://seattletimes.nwsource.com/
Details: http://www.mapinc.org/media/409
Author: Bob Young

STATE GIVES POT-BUSINESS APPLICANTS MORE TIME

Liquor Board Reverses Position, Delays Culling Applications

State officials said last month they'd immediately disqualify any
application for a marijuana business license tied to an improper
address, such as a home or location within 1,000 feet of a venue
frequented by minors.

The culling had already started, according to the state Liquor Control
Board (LCB). About 500 such businesses were quickly identified and
would soon receive disqualification letters, said Brian Smith, a
spokesman for the board. But no letters went out. Instead, the board
has reversed what appeared to be its firm position last month. It is
now allowing applicants 30 days from the time they receive notice from
the board to secure a legal address. Notifications started going out
about two weeks ago.

The board is allowing entrepreneurs who applied with an illegal
location, such as cupcake mogul Jody Hall, to change to a legal one.

For now, the impact of the board's reversal is to keep many more
entrepreneurs in the hunt for a license, which dismays applicants who
had secured compliant locations, sometimes at a cost.

The change also marks another delay in the process of creating a legal
marijuana industry with 334 retail stores and 2 million square feet of
farms. The new legal-marijuana law took effect in December 2012.
Stores are not projected to open until summer.

The board is addressing these recent changes gingerly. Officials
responded to questions in writing. Board Chair Sharon Foster declined
to comment further.

After stating last month that applicants needed to start with a legal
location or face immediate disqualification, Smith said, "we decided
that everyone who applied for a license should be provided with the
same benefit of 30 days" to supply evidence they had secured a legal
location.

If entrepreneurs fail to come up with a legal location in 30 days,
Smith said, their applications would be dismissed.

Some have speculated that the change was made to help entrepreneurs
who had applied in cities and counties that have imposed bans on legal
pot businesses. But Smith said that was not a factor.

The stakes are high, particularly for retail licenses. The state plans
to license 334 stores and has more than 2,200 retail applications to
review. If there are more qualified applicants than stores, after
background checks and other vetting, the state would use a lottery to
determine winners.

Some applicants are frustrated. John Davis, CEO of two Seattle
medical-marijuana dispensaries, said the board's shift resulted partly
from mixed messages sent by its staff. At licensing workshops,
employees told entrepreneurs that their locations did "not need to be
finalized to apply." Then officials said last month they would
disqualify any applications tied to improper locations.

Davis said the current policy is unfair to entrepreneurs like himself
who have worked hard, and spent money, to secure legal locations for
recreational-pot shops.

"The LCB has to be very careful or this could end in lawsuits," Davis
said. "I'm not threatening one. But I have to consider what's best for
my business."

For others, the changes are more nuanced, said Robert McVay, an
attorney at the Canna Law Group, which represents about 100 applicants.

While the changes are maddening to some of his clients, McVay said,
for others they're welcome relief - and that includes some who thought
they had locked up legal locations only to hit a snag.

"The bigger concern," he said, "is we're halfway through the process
and it still feels like rules are being changed on the fly, ad hoc."

That's worked out for some.

Hall, owner of Cupcake Royale, applied just before the deadline for a
retail license at 1111 E. Pike Street on Capitol Hill. Hall said she
knew that's not a legal location because it's too close to a park but
thought she was allowed to use a placeholder while she secured a deal
at a compliant address.

She also had acknowledged that she probably applied for the wrong
license. She had hoped to make pot-infused baked goods, which requires
a processor license. As a retailer she could only buy from
state-licensed processors and the rules do not allow her to hold both
processing and retail licenses.

Under the new board policy, Hall has changed the proposed address of
her retail shop to 2415 Airport Way S. in Sodo, which she said is compliant.

She said she's still looking for another address and considers the
Sodo location a fallback if another property can't be leased.

She stressed that her retail business, called Royale Leisure
Industries, "would not in any way be affiliated with Cupcake Royale."

The liquor board's Smith said applicants may change addresses at this
point but not the type of license they're seeking. 
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MAP posted-by: Jo-D