Washington Liquor Board Rolls Back How Much Pot Producers Can Grow

By Austin Jenkins

Applicants to grow recreational pot in Washington could have their state licenses in hand two weeks from now. But they won’t be able to produce as much marijuana as they originally thought. Washington’s Liquor Control Board Wednesday instituted new limits designed to avoid a market glut.

Here’s the problem. Nearly three-thousand would-be pot growers applied for a state license. Some back of the napkin math by the Liquor Control Board revealed the state was on track to exceed its own production cap by nearly 18-fold. So what to do? The agency won’t allow growers to hold multiple licenses. And growers will only be able to produce 70-percent of what their license allows – at least initially. 

Chris Kealy had applied for three licenses to grow 90-thousand square feet of marijuana. He’s even got a building under construction. Now he’ll only be able to grow a fifth of what he was planning. But Kealy’s not complaining.

Chris Kealy: “We understood the risk we were taking and respect the decision they are making.”

Kealy wants Washington’s experiment with recreational pot to work. He says if the state overproduces marijuana it will end up on the black market and that will invite federal intervention. In the short term, Kealy says he’ll sublet the extra space in his warehouse.

Washington’s Liquor Control Board has also decided to proceed with issuing licenses to applicants even if that license conflicts with a local government ban or moratorium on pot businesses.

So far Lakewood, Sea Tac and Wenatchee have instituted outright bans on marijuana businesses. More than 30 other cities from Kent to Richland have enacted temporary moratoria. That’s according to The Center for Study of Cannabis and Social Policy.

Liquor Control Board member Chris Marr says the decision to move ahead with the issuance of licenses is not an “in your face” response to local moratoria. The Board also notes that a state marijuana license is not a license to operate. Applicants must still comply with local regulations.

Meanwhile, for the first time, Washington revenue forecasters are including tax proceeds from marijuana sales in their quarterly outlook. The new forecast released Wednesday projects $51M in pot money during the next two year budget cycle.

Cannabis Revenue Forecast (p. 20): http://www.erfc.wa.gov/forecast/documents/rev20140219_color.pdf

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