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Out of state investors may invest in Washington weed




Graphic by: Grace Lindsley/Observer



Brian Cook, Staff Reporter
January 28, 2016
Filed under The EverGreen Scene


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The Washington State Liquor and Cannabis Control Board intends to lift the ban on out-of-state investors financing recreational marijuana producers, processors and retailers as early as March of this year.

Lifting the ban on out-of-state investing will make it easier for marijuana producers, processors and retailers to raise money to start or grow their company.

This fall, the legalization of recreational marijuana is going on the ballot in California.

However, California has no ban on out-of-state investors and, with the possibility of recreational cannabis being legalized, investors could be looking to spend big on America’s most populous and largest medical marijuana producing state.

States that receive revenue from recreational marijuana sales may be making some changes to how they run their investments before California potentially enters the market this fall.

“It’s already expensive to come into the market as a business owner,” said Lena Davidson, sales and marketing manager of botanicaSEATTLE. “Producers are sinking sometimes their life savings into their crop.”

According to Davidson, marijuana is a difficult business to break into.

“You invest heavily in an agricultural crop. It grows, you harvest it, the money’s already been spent. You make your money when you sell that crop,” Davidson said. “Marketing, packaging, distribution: those are expensive things in a big state that is really competitive for bud right now.”

Since recreational marijuana is a new industry, many businesses have had a hard time getting financed since banks refuse their requests for loans.

Many retailers are restricted to relying on a cash only service because of this lack of financial backing.

“The banks won’t knowingly take [money processed off a card,]” Rob Hendrix, owner of Cannabis Central, said. “We had a debit card machine in the beginning, but they shut it down.”

The U.S. Department of Justice has warned states with legalized marijuana on multiple occasions that if drug money starts trading across state lines, the state’s marijuana industries might face a federal crack down.

Marijuana is still against the law federally, meaning the U.S. government could come into the state and shut down all production and retail for the marijuana industry.

http://cwuobserver.com/6987/the-evergreen-scene/out-of-state-investors-may-invest-in-washington-weed/

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Board revises draft marijuana rules following public comment period


In a separate action, the Board adopts staff’s recommendation for additional marijuana retail stores

OLYMPIA – Following six public hearings held throughout the state, the Liquor and Cannabis Board (Board) today voted to revise the draft rules to accommodate public input it received on its original draft rules. The draft rules are necessary to implement 2015 legislation which aligns the medical marijuana market with the existing recreational market. Under the revised rules timeline, a public hearing would be held Feb. 10, 2016, with the Board being asked to adopt the rules on Feb. 24, 2016. If adopted, the rules become effective March 24, 2016.

“We spent many hours listening to and reviewing public comment,” said Board Chair Jane Rushford. “Since the beginning, this has been and open and transparent process. Today’s revised rules reflect the Board’s continued commitment to transparency and the willingness to listen and make adjustments that may improve the rules.”

Highlights
Some highlights of the rule revisions include:

• Removing language prohibiting the use of terpenes and cannabinoids;
• Removing proposed language requiring re-testing after 30 days;
• Removing the six month residency requirement for financiers (allows out of state financiers);
• Removing the language prohibiting characterizing flavors for inhalants;
• Changing delivery time from 24 to 48 hours;
• Adding that “Mr. Yuk” stickers be applied to all labels for infused edible and liquid products;
• Adding Employment Security Department and Labor and Industry taxes and fees as a licensing requirement for being current on taxes.
A summary sheet of the full list of revisions can be found here.

Emergency Rules
In a separate action, the Board also adopted emergency rules following staff’s recommendation to expand the number of retail marijuana outlets to accommodate the alignment of the two markets. At its Dec. 16, 2015, meeting, the Board heard a process recommendation from staff that would increase the number of retail marijuana stores from the current cap of 334 to a new cap of 556. The recommendation followed an analysis of the entire marijuana marketplace by the state’s contracted research organization, BOTEC Analysis Corporation. You can read more regarding the recommendation from the Dec.16 media release.

BOTEC Analysis Corporation Report
BOTEC Analysis Corporation provided its final report, Estimating the Size of the Medical Cannabis Market in Washington State, on Dec. 15, 2015. In its report, BOTEC provided a range of the value of the overall marijuana market in Washington State. Its best estimate of the overall market value is a median figure at $1.3 billion annually. Its best estimate on the breakdown is: $480M medical (37 percent of market), $460M state-licensed recreational stores (35 percent of market) and $390M illicit (28 percent of the market).

The mission of the Washington State Liquor and Cannabis Board is to promote public safety and trust through fair administration and enforcement of liquor, tobacco and marijuana laws.


http://www.liq.wa.gov/pressreleases/board-revises-draft-mj-rules