Washington Updates I-502 Rules to Foster Competition

The Washington State Liquor Control Board made a ruling last week that should spark the hopes of small-scale ganjapreneurs around the state. The change dramatically affects how licenses are distributed to marijuana producers, cutting the number of licenses a person or company can have to only one (from a previous potential for three) and limiting the amount of product they can produce to only 70% of what the licenses originally allowed.

Claiming that many applicants either are not ready for the full growing capacity for which they’ve applied—or have simply applied for multiple licenses with the intent of only using one to begin with, saving the other licenses for later expansion—the WSLCB released this statement following its decision to limit the number of producer licenses:

“The Board closed a 30-day application window for marijuana licenses on December 20, 2013. During that period the agency received 2,858 marijuana producer applications. The plant canopy of these applications far exceeds a manageable plant canopy set by the Board in its rules. Of these applications, over 900 are for more than one marijuana producer application. The rules currently allow for up to three licenses per licensee.”

In an effort to meet a manageable plant canopy for marijuana production, the Board will file an interim policy that limits any qualified entity or principals within any entity to one marijuana producer license. If any entity or principal has more than one marijuana application pending, staff will contact the applicant and offer them the option of withdrawing their additional applications for a refund or having their additional applications held up to one year or until the Board determines more marijuana producer licenses are needed.”

According to a news release by Board Chair Sharon Foster, the WSLCB’s action last week “clears an obstacle and allows the agency to begin issuing marijuana producer and processor license in the coming weeks… We believe this is the most fair and equitable way to get the market up and running.” And while some prospective growers feel cheated by the rule changes, small-scale production operations are expected to benefit from a less-competitive market.

In the most extreme cases—businesses seeking the maximum of three licenses—prospective production sites face a drastic decrease in available growing space: previously the maximum was 90,000 square feet, and it has now been reduced to 21,000 square feet.  Some business owners and other investors have already purchased property and general infrastructure for their growing operations, and now feel particularly duped by the WSLCB.  Such is the case for Ryan Agnew, consultant for some investors who applied for production licenses. “I’m blown away,” he says, and informs that the new limits will cripple plans already set in motion by his group.  

On the smaller side of the market though, it’s a different story. Christi Masi and Scott Masengill of Seattle are partners in the industry (and in marriage), and they hope to receive a license for pot production in the coming weeks.  Thanks to the Board’s recent ruling, their chances for success in the market as a small, private operation have greatly increased. “I do feel like the state has done a good job of setting things up in a way that we will all have the opportunity to succeed at this,” said Masi. “I really appreciate that they are kind of protecting the small ‘ma and pop,’ which we totally are… The state has decided that the small guy gets a chance here, and that feels good.”





Photo Credit: The Other Dan

Exclusive offer from our sponsor:

Get daily news insights in your inbox. Subscribe


Latest Cannabis News

View all news Get email updates

Featured Business Profiles

Create a profile View all categories

From Our Partners

New to Cannabis? Start Here.

The Ganjapreneur beginner's guide to all things cannabis.

Business Index

Find and connect with cannabis-friendly service providers:

Website & branding by the Ganjapreneur in-house agency:

Blue Dream - Uplifted cannabis industry branding & marketing.

Uplifted cannabis industry branding & marketing.