Pubdate: Thu, 08 May 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
Page: A1

POT LOTTERY WINNERS ALREADY CASHING IN

Green Rush Expected As Losers Seek Partners

Seattle Company Buys Bremerton's Better Buds

The wheeling and dealing has started for lottery-winning pot store
locations.

Seattle-based C & C Shop, which struck out in the recent lottery,
announced it bought Bremerton's Better Buds, a lottery winner.

"We placed another bet on this new industry's future," said Pete
O'Neil, spokesman for C & C, which applied for stores in Bremerton,
Lynnwood and Seattle.

O'Neil's team bought the assets of Better Buds from owner Dave Comeau
for $150,000. Comeau also gets $10,000 per month, or 10 percent of the
Bremerton store's net revenue, in perpetuity, Comeau said.

The lottery is expected to kick off a flurry of activity - a "green
rush" - pot entrepreneur Ryan Kunkel called it - as losers try to
partner with winners for the state's proposed 334 stores across the
state. There may only be 305 stores initially because no one applied
for 29 allotted licenses, mostly in rural areas.

The state held a lottery because there were 1,174 applicants who got
through initial screening vying for the 305 store licenses.

Comeau, 36, said he's been growing medical marijuana for six years. He
wasn't an applicant who plunked down the $250 fee with hopes of
winning a lottery ticket rather than opening a store.

It was tough to sell, he said. "We were gearing up" to open a store,
he said.

But Comeau said he and his wife had questions about being in the first
wave of stores and whether they would be paying rent without a
reliable supply of product to sell.

The decision, he said, "ultimately came down to partnering with
someone who can take this to the next level."

C & C has access to capital and connections to growers, he said, that
should help the store secure its supply and start successfully.

As for his windfall, Comeau said, "You can see why the lottery is a
golden ticket for some."

Bremerton was allotted just two retail stores by the state. Sixteen
applications made it through initial screening by state officials to
qualify for the lottery.

Better Buds filed three applications, all at 1102 Scott Ave.,
according to state records. That means Comeau had roughly a 1-in-5
chance of winning the lottery.

Attorneys already are advising clients on procedures and restrictions
for buying lottery-winning businesses. The Canna Law Group in Seattle
is telling clients to proceed "very carefully."

State rules do not allow lottery winners to sell their coveted retail
licenses. But they can sell their businesses.

The new owners have to apply for licenses and have their criminal
backgrounds checked, as well as have their financial and operational
plans approved by state regulators. Then they must build out their
stores and pass final inspection before getting a license.

Original applicants, such as Comeau, can't be entirely removed as
owners of a business until new owners have been approved by state
regulators and receive a license.

The state expects to start issuing licenses for the adults-only stores
by early July.
- ---
MAP posted-by: Matt