A close-up shot of a cannabis plant grown under Washington's I-502 market regulations.

Rory Savatgy

The Washington State Liquor and Cannabis Board has withdrawn more than 2,000 applications for cannabis retail licenses. The applications are non-refundable, and the majority of the applicants in question are former medical cannabis business owners who were pushed out of the marketplace by Washington’s I-502 regulatory structure.

The clash between the medical and recreational systems in Washington State has been well documented. The state’s 2012 legalization vote and subsequent regulations ultimately clashed with Washington State’s medical cannabis system which had grown from an initiative passed in 1998. Lawmakers passed the ironically named Cannabis Patient Protection Act in 2015, which merged the two systems.

Upon passage of the law and throughout negotiations leading up to passage, many legacy medical cannabis storefronts were told if they had been good players and paid their taxes they would be eligible to apply for a limited spot in the new recreational cannabis system. New applicants were sorted into priority 1, 2, and 3 based on whether or not their taxes were up to date and other factors set forth by the board. Hopes were high, but measured, that these legacy medical cannabis shops — who paved the way to legalization — would be able to secure a piece of the Washington cannabis market.

But on April 18, 2017 many applicants who have been waiting years for a decision were officially told their applications had been withdrawn. According to an email issued by the LCB, between October 2015 and March 2016, the Board received 2,340 retail cannabis applications to fill just 222 spots. Only 290 applicants were considered “Priority 1” and the email states they have filled 219 of the 222 available licenses. The email goes on to inform all “Priority 2 and 3″ applicants that there are simply too many “Priority 1” applicants; therefore, theirs are being withdrawn.

“From the beginning of this process, over a year and a half ago, we have indicated to applicants that there is no guarantee we will license all priorities… and that it was unlikely that we would get to either 2nd or 3rd priorities,” LCB spokesperson Mikhail Carpenter told Ganjapreneur in an email. “This really shouldn’t come as a surprise to anyone. Also from the beginning, we have reminded applicants that the application fee ($266) is non-refundable and it is clearly marked on the application. For the past year, Priority 2/3 applicants have had the option to voluntarily withdraw and be refunded because it was unlikely that their applications would be processed.”

“No decision has been made on Priority 1 applicants at this time because we are still filling retail license allocations,” said Carpenter. “Regarding future applications, it is too early to tell when or if there will be another window and what that process will look like.”

The following email, acquired by Ganjapreneur, was issued by the LCB to license applicant Green Raven Management Group LLC earlier this week:

Dear retail marijuana applicant,

By this email, the Washington State Liquor and Cannabis Board (WSLCB) is notifying you we will be withdrawing all priority two and three applications for retail marijuana licenses we received between October 12, 2015 and March 31, 2016.

During that time, we received 2,340 retail marijuana applications to fill 222 additional licenses. The Licensing Division received 290 priority one applications. We have licensed 212 of the 290. There are more priority one applicants that meet licensing requirements than there are available locations.

The WSLCB will not be issuing refunds for these applications. The application indicated that the license fees are non-refundable. When we began this process, the WSLCB published information on our website outlining the retail application process. On that site, we explained,“There is no guarantee we will get to all priorities, it will depend on how many applicants qualify in each level.”

You should expect to receive a formal letter via email confirming the WSLCB has withdrawn your application within the next three weeks. That letter will contain additional information about next steps.

Thank you.

The Marijuana Unit
Licensing and Regulation Division

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