Wednesday, March 12, 2014

When Will the Market Open?

Last week, the Washington Liquor Control Board ("LCB") granted the first license to produce and process marijuana for recreational use.  The licensee, Sean Green of Kouchlock Productions, will grow 21,000 square feet in his Spokane facility. He reports that he’ll market starter plants to other producers initially, and later expand to supply the retail market as it opens this summer.

This announcement is slightly behind schedule, as the LCB was expected to begin issuing producer/processor licenses in February.  By all accounts, the LCB was not prepared to handle the volume of over 7,000 applications it received.  After the recent policy change limiting producer applicants to only one license, 900+ applications were removed from the list.  However, this still leaves almost 1,900 producer applications alone – and some of them have not yet begun the review process.

Brian Smith, spokesperson for the LCB, set the expectation for a 90-day review period in a December Seattle P-I article: “when you combine the extra work with the glut of applications within a short application window you get the estimated 90 days for the average application.

Based on this statement, we should expect most licenses to be issued next week for approved businesses that applied during the window that closed December 20, 2013 . . . but don't hold your breath.  Hundreds of producer applicants are still waiting for their initial contact from the LCB.   It is likely only a handful of producer licenses will be issued over the coming weeks.

Our hope is that the LCB will provide the public with additional transparency regarding the schedule under which the agency expects to issue licenses for the producers, processors, and retailers, many of whom have made significant investments in property and equipment.

LCB representatives have noted that they expect the retail lottery to occur in April and to begin issuing retail licenses in June/July.   These statements appear a bit aggressive, considering how slowly things have moved thus far.  We can speculate that the bulk of retail will not open until late summer or early fall (August-October).

Likely, the producer and processor licenses will trickle in over the coming 6 months, with the bulk of producer/processor licenses being issued also in late summer and early fall (August-October).

At this point, our best guess (with the limited information available) is that the licensed recreational marijuana market in Washington will be in full swing by December, 2014.

No comments: