24 pot licenses submitted for Tri-City area; many don't meet state requirements

Kristi Pihl, Tri-City HeraldDecember 28, 2013 

More marijuana retail stores have been proposed in the Tri-Cities than the Washington State Liquor Control Board plans to license.

Fifteen licenses are planned for Kennewick, Pasco, Richland, West Richland and unincorporated areas. At least 24 applications have been received.

More than half of those 24 potential Tri-City locations do not appear to meet the state's minimum requirements for pot retail sales. Some may be too close to public schools and parks, for example.

State employees are working through a backlog of applications for licenses to grow, process and sell pot. The application deadline passed earlier this month.

The state received more than 860 retail applications, as well as more than 1,200 to process pot and almost 1,700 to grow it, according to state data. There have been 42 grower and 24 processor applications for Benton and Franklin counties.

A lottery for retail licenses is likely, said Mikhail Carpenter, spokesman for the liquor control board. State officials first will need to determine how many of the retail applications are legitimate and if they meet requirements.

Selling pot here?

Kennewick, Pasco, Richland and West Richland have not determined where pot-related businesses may be able to open, if they are allowed at all.

So far, there have been 10 applications for retail stores in Kennewick. However, four of the proposed locations seem to be within a 1,000-foot radius of a school or a public park, which is not permitted by the state.

In Pasco, seven retail locations are proposed. But two appear to be existing businesses, and state law says marijuana-related sales are the only permitted business at a pot retail location. A third site is within 1,000 feet of a day care center, which also is not allowed under state law.

In Richland, five locations are proposed. Two appear to be too close to public schools. One is proposed for an apartment, which officials say is not allowed under state law. The fourth business is owned by a company that is owned by Delaware residents, and only Washington residents can own and operate pot-related businesses under Initiative 502.

Only one location each has been applied for in Prosser and West Richland.

Kennewick, Pasco, Richland and West Richland have imposed moratoriums on pot-related businesses as city officials wait for clarifications on I-502 from the state Attorney General's Office and the state Legislature.

City officials and prospective pot-business owners remain concerned about the disconnect between state and federal law, since recreational pot remains federally illegal. While the U.S. Department of Justice has said it will not enforce the law to a certain extent -- unless there are minors, gang or criminal activity, firearms or federal property involved -- the law remains unchanged.

The liquor control board plans to allow up to four stores each in Kennewick and Pasco, three in Richland, one in West Richland, two in Benton County outside the three larger cities and one in Franklin County outside Pasco.

A business opportunity

The list of Tri-City businesses seeking marijuana licenses is likely to grow, as the state Business Licensing Service is working through a backlog of applications. A final count may be available by Jan. 7.

Richard Dignum of Pasco has applied to open a retail store on Clearwater Avenue in Kennewick. His business, Cannawick LLC, does not yet appear on the liquor control board's list, but is registered as a business with the state.

Dignum would have preferred to open a medical marijuana dispensary, which is allowed under state law, but couldn't because of local moratoriums on collective gardens, he said.

I-502 now gives him the chance to open a marijuana business, and he thinks there will be a market for legal pot, he said. But he doesn't think the amount the state is allowing will be enough to shut down the black market. Total production is limited to about 46 acres statewide next year.

The way the taxes are set up and the rules are written will make it difficult for businesses to make any kind of profit at first, Dignum said.

"There are a lot of people that are ready to implement this, but there is information that a lot of people aren't getting," he said.

Security remains one of Dignum's major concerns as a potential business owner.

The new state law does not provide any funding to cities to pay for increased costs, and businesses cannot have armed security because of how the federal government has decided to treat recreational marijuana in Washington state.

Banks have also said they will not accept revenue from pot, which means there is the potential that pot-related businesses will be forced to keep a lot of cash on hand.

Dignum thinks pot-related businesses should be able to pay a city so that extra officers can be hired to police pot, he said.

Just starting out

Like Cannawick LLC, many of the businesses that have applied to grow, process or sell pot are newly created, according to corporation filing information from the Washington Secretary of State's Office.

Names of those businesses refer to marijuana, sometimes directly. Proposed names include Buds for Life, Buds Forever, Need4Weed, Cool Buds and Amazing Mary Jane.

The names of potential growers and processors such as Thscience, Trichometechnologies and the Calyx Company refer to parts of the plant. Tetrahydrocannabinol, also called THC, is the main active ingredient in marijuana. Trichomes are the crystals on pot plants that contain active ingredients, and are located on the calyces, which make up a bud.

Some existing businesses have turned in applications, including a few farmers.

Candy Mountain LLC, owned by Kirk Rathbun of Kennewick and Geoffrey Clark of Gig Harbor, has applied to grow and process pot.

Rathbun, who is also a Kennewick Irrigation District board member, said Clark asked him about applying after being approached by someone interested in growing and processing pot in Benton County, since the county does not have a moratorium on pot businesses. Candy Mountain is a land holding company for both farms and development.

Rathbun said they do not plan to operate a growing or processing facility themselves. There is potential value in getting the license, he added, because acreage in the state is limited.

-- To submit business news, go to bit.ly/bizformtch.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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