Since opening the marijuana retail license application window in October, the Washington State Liquor and Cannabis Board (“LCB”) has received over 800 applications. So, what does this mean in terms of expansion of the legal marijuana market in Washington?
Currently, there is no cap on the number of retail licenses that the LCB may issue nor is there a limit on the licenses that may be issued within a specific city or county. The problem is, however, that either through outright bans or strict zoning regulations, there are a very limited number of locations where retail marijuana stores can locate.
In response to the removal of the state-wide cap, cities and counties have begun self-limiting the number of retail stores that may locate within their jurisdiction. Renton, for example, recently passed an ordinance prohibiting more than five retail marijuana stores within city limits. As I have discussed in prior posts, it is critical to apply for a building permit in any jurisdiction where you are considering locating to protect yourself from later enacted moratoria and other zoning restrictions.
The 1,000 foot buffer requirement is another practical limitation that will affect the number of retail stores that will open in Washington. Per legislation enacted earlier this year, cities and counties can reduce the 1,000 foot buffer in some circumstances. To date, however, the City of Bellingham, is the only jurisdiction to have done so and only for license applicants with a vested building permit.
Consequently, although the new retail licensing window will indeed result in the opening of new recreational marijuana stores (and the closing of medical marijuana dispensaries), to create a truly meaningful expansion of the legal market, cities and counties need to become more willing to allow marijuana businesses to operate within their jurisdictions.
Interestingly, Washington State tribes have begun developing their own retail marijuana market. The Squaxin Island Tribe intends to open its retail marijuana store next week, which is across the street from its Little Creek Casino. The Suquamish Tribe has also entered into a compact with the state to open a retail marijuana store on its tribal lands in Kitsap County.
The new tribal retail marijuana stores will directly compete with state licensed marijuana retailers. But, because the tribes will not immediately produce or process marijuana, they will be purchasing marijuana from I502 licensed producers and processor and therefore providing an additional market, albeit limited, for producer/processors. If the tribes do, however, start producing marijuana then that could be a game changer for other state licensees.
Interesting times are ahead as medical dispensaries close, more recreational marijuana retail stores apply to open, and the tribes enter into the legal marijuana business. Stay tuned to this blog for further updates.
For more information on the regulation of marijuana businesses, please contact Heather Wolf.