Wednesday, April 23, 2014

Lottery for Marijuana Retail Licenses

Eyes are on the Washington state Liquor Control Board (LCB) this week as applicants await the result of the lottery to determine the recipients of licenses to operate recreational marijuana retail stores.  The process of selection will be an independent, double-blind lottery to produce ordered lists of applicants for each jurisdiction, for a total of 334 stores across the state.  The lottery will be performed by the Social and Economic Sciences Research Center of Washington State University and the accounting firm Kraght-Snell of Seattle, who currently oversees Washington’s state lottery.

2,171 applications for retail licenses were submitted to the LCB in late 2013. Starting in late February, applicants were asked to complete pre-qualifying packets, providing five pieces of information: applicants’ personal criminal history, over-21 age verification, proof of Washington state residency, proof of Washington state business licensure, and a leasing agreement for a location address outside the 1,000’ buffer on sensitive areas. In March, LCB deputy director Randy Simmons reportedly stated that more than 500 applicants had failed to submit the information within the timeframe allotted. Of the applicants who did submit by the deadline, roughly 20-50 percent did not provide the agency with all of the required information.  Finally, this week we learned that an undisclosed number of applicants with completed packets have been administratively withdrawn from the lottery process, due to incomplete packets or failure to meet one or more requirements. Despite much public conjecture, no firm number has been released for the number of applicants who will participate in the lottery this week. We estimate that 800-1,250 applicants are qualified to participate at this time.

The state will release the results of the lottery on May 2, at All pre-screened applicants will be notified of their rank in the jurisdiction for their location. Licenses will be issued in batches of 10-20 in the first week of July, beginning with the most populous areas.  The lottery will produce ranked lists for jurisdictions under bans or moratoria, which will be used to issue licenses when permitted. In cases where applicants are found to be ineligible for the retail license, they will cede their position on the list to the next qualifying applicant. State officials expect the first retail stores to open in July 2014, but many anticipate that supply will be limited until a larger number of producers and processors are licensed and operational.

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