Politics & Government

Dispensaries apply for medical marijuana licenses; pot growers, processors left out

Charles "Carlos Sativa" Alexander photographs buds of marijuana pending results of judging at the NW Cannabis Classic trade show at the Tacoma Armory on Aug. 29, 2015.
Charles "Carlos Sativa" Alexander photographs buds of marijuana pending results of judging at the NW Cannabis Classic trade show at the Tacoma Armory on Aug. 29, 2015. Staff photographer

With less than eight months before Washington medical-marijuana businesses must join the state-sanctioned market or shut down, retailers are jumping on the bandwagon, while manufacturers worry about being left behind.

The state Liquor and Cannabis Board said 962 applicants are seeking a retail license.

The question is how many licenses to hand out. That will depend on a soon-to-arrive report from consultants researching market demand for marijuana.

That leaves applicants like Tacoma Holistic Collective on Sixth Avenue waiting to learn if they will shut down or survive with tight requirements for security, packaging and tracing of their products. “I don’t mind jumping through some more hoops on the back end,” THC general manager Kevin Heiderich said.

If he has to close, well, his employees will be in demand at other companies, and he’s landed on his feet before. “I’ve closed down three businesses from software to cannabis before, just trying to stick it out,” Heiderich said.

962Applications received for new marijuana retail licenses.

118Applications received from existing stores for medical-marijuana endorsements.

Some businesses don’t have a chance to apply. The latest round of licensing is only for retailers, not for the people who grow marijuana plants and turn them into products ready to be inhaled, applied or eaten.

The state has already licensed 775 of those producers and processors. But that was based on an application process for recreational marijuana.

There’s plenty of overlap between recreational and medical products, but some makers of specialty products for patients say they didn’t apply because their goods aren’t meant for recreational use.

“The folks who are left were the people who made a conscious decision (that) they aren’t in this business for mass profits. They’re actually in this business to help folks,” said Michelle Rowe, a Tacoma attorney representing marijuana businesses. “They are being left out in the cold right now.”

Rowe and others gathered at a public hearing Thursday in Tacoma called for a new round of applications for producers and processors.

The Legislature told the cannabis board to let existing producers grow more plants, and allowed the board to take new applications if the existing producers don’t grow as much as they are allowed.

The agency is waiting for the consultants’ research, due out this month. “We’ll make a determination as to the need based on the size of the market over time,” spokesman Brian Smith said.

Smith noted that some businesses want permission to both grow and sell at retail. “The Legislature would have to fundamentally change the system to allow for that,” he said.

Applicants for the new retail licenses have already exceeded predictions. But the agency says just 19 appear qualified for top-priority consideration.

To get on that inside track, businesses must have both applied for a recreational license during the first round in 2013 and participated in the medical-marijuana industry since 2012 without running afoul of regulations and tax responsibilities.

The board is working on top-priority applications before moving down its priority list.

In a separate process, it will consider updating the licenses of existing retail stores to let them cater to patients. At least 118 stores, more than half, have applied for medical-marijuana endorsements.

Stores with endorsements will be able to sell in larger quantities and at a lower tax rate to people entered into a new patient database. They will also be able to sell more potent marijuana, although not in smokable or edible forms.

Jordan Schrader: 360-786-1826, @Jordan_Schrader