Lewis County pot applications see big spike

OlympianJanuary 13, 2014 

Since the state Liquor Control Board’s last count, the number of Lewis County’s marijuana licenses has nearly quadrupled.

Seventy-nine producers, 56 processors and 14 retailers are ready to set up shop in Lewis County and capitalize on the recently legalized industry, according to updated figures released Tuesday. At last count, the county had 21 applications for producers, 13 for processors and four for retailers.

According to the Liquor Control Board, the spike is due, in part, to a backlog in processing the applications, which had to be filed by Dec. 20.

Statewide, more than 2,600 applications have been submitted - significantly more than was predicted, or is needed.

It’s a problem because officials are, at least initially, capping total pot production at 2 million square feet, or about 46 acres. It remains to be seen how many applications are approved, but if it’s even close to the number submitted, that could leave growers with less than 1,000 square feet apiece on average - not enough space for most to run an economically viable operation.

"It’s going to be a challenge, no question about it," said Alison Holcomb, the Seattle attorney who drafted the legal pot law. "There are 10 times as many applications as we need."

The prospect of having too many growers isn’t the only difficulty prompted by the overwhelming interest in the industry.

Some 2,035 applications have been processed so far for retail licenses, but the state is capping the number of pot shops statewide at 334. That means there are likely to be lotteries for those licenses in many areas.

As it stands in Lewis County, the number of applications is inconsequential - none of them are going to be realized any time soon.

Lewis County, as well as its cities, has adopted a policy that places marijuana applicants in limbo: Applicants may grow, produce or sell marijuana, as long as they can get approval from both the state and federal governments.

The state approval is easy; the federal approval is virtually impossible.

County Commissioner Bill Schulte said that ever since voters passed Initiative 502 last year, local jurisdictions have found themselves in a governmental tug of war.

On one side is state law, which permits highly regulated growth, production and sale of marijuana. On the other side is the federal law, which still outlaws marijuana.

Though the feds have said they do not, at this point, plan to prosecute local jurisdictions that are breaking the Controlled Substances Act, the risk of allowing I-502 business outweighs the reward, Schulte said.

"We’re really reluctant to put our employees or elected officials at risk," he said.

Mark Thompson knew that this day would come, that marijuana, eventually, would be legalized. Now that it has, he wants to be part of it.

"I grew up in the ’70s," the Toledo farmer said, "so this legal thing is kind of inspiring to me." Thompson, along with his son, Matt, and wife, Debbie Goldsby, has applied to turn their 6-acre Toledo farm into "All Green Farms Inc."

Thompson describes the new venture as a family business.

"I’ve always wanted to do something with my boy, and this is something he wanted to do too," he said. "We actually purchased out here thinking this is what we’d do someday."

As a medical marijuana card holder, Thompson already has much of the infrastructure needed to grow pot. He estimates his current equipment to be worth about $100,000.

"When they allowed me to start growing medical, I realized my heart is really into it. I thought, ’What a great job,’" he said. "If it works out and all goes well, it will be something good for my grandkids."

In his indoor facility, Thompson grows various strains including sativa and kush. Growing medical pot has given him time to learn and perfect his growing techniques, he said.

Thompson believes the county’s roadblocks are surmountable. "I’m pretty casual about it," he said. "I hope it all works out."

Washington State Liquor Control Board spokesman Mikhail Carpenter said it’s premature to worry about the number of applications statewide, because while the state is not capping the number of growers, no one yet knows how many will meet criteria. The board must screen each application to make sure the proposed locations aren’t within 1,000 feet of schools, parks, daycares or other locations there children frequent. Officials must also conduct background checks on applicants and their financial backers.

"They haven’t gone through the licensing process," he said. "We don’t know how many are viable." The board is issuing growing licenses of three tiers: less than 2,000 square feet; 2,000 to 10,000 square feet; and 10,000 to 30,000 square feet. Under its rules, if the total amount of licensed growing canopy exceeds 2 million square feet, it may reduce by an equal percentage the space allotted to each grower, or apply those reductions to the growers in one or two of the tiers.

Holcomb called the glut of pot-growing applications "a real problem for the people that want to go into production."

"If you apply for a 30,000-square-foot grow and incur all the expenses for the lease and buildout, you don’t want to suddenly learn that you can only grow 2,000 square feet," she said.

Holcomb suggested the board should be prepared to raise the production cap of 2 million square feet, to ensure enough pot is produced to meet demand. It remains unclear how good the licensed growers will prove to be, and how much usable marijuana they’ll actually produce from the 2 million square feet of canopy.

She noted that soon after recreational marijuana stores opened in Colorado Jan. 1, some had to close early due to limited supply. Some stores jacked up prices due to the first-day demand.

Some hopeful growers have applied for the maximum of three top-tier licenses, meaning they might have been planning to grow as much as 90,000 square feet of cannabis.

"Our biggest clients are sweating it," said Seattle marijuana business attorney Hilary Bricken. "People are paranoid and they have every right to be paranoid, because no one knows what’s going to happen. As a business strategy, can you rely on everyone else’s failure so that you can have the size grow you want? I would say, no, not if you want to sleep at night."

But Paul Schrag, of Commencement Bay Production and Processing in Tacoma, said he’s not panicking. His company has applied for two growing licenses, with plans to start with an initial grow of about 3,000 square feet and expand from there.

"Knowing what I know of the gantlet people have to go through to receive a license, I have a feeling a good percentage of those applications will be eliminated," he said. "There’s a lot of due diligence left that’s going to thin out those numbers."

The Associated Press contributed to this report.

The Olympian is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service