Monday, March 3, 2014

LCB Announces New Policy: One Producer's License at 70%

The LCB announced today a major new “ Interim Policy.”  In an effort to manage the state-wide 2 million square foot plant canopy limitation, the LCB has decided to restrict each principal/entity to ONE producer’s license.
For those of you with more than one producer application, you will be given the option to withdraw (with refund) your other applications, or to put those applications on hold for a year (or until the LCB determines that more licenses are needed).
 In addition to the limit on producer licenses, the allowable plant canopy per license is being reduced to 70% of the original tier allotments.  As a result, the new producer tiers would be as follows:

                Tier 1:    0 – 1,400   square feet
                Tier 2:    1,401 – 7,000 square feet
                Tier 3:    7,001 – 21,000 square feet

As this was explained to our office, this reduction in tiers would not affect those who requested square footage within the new limits.  In other words, an applicant who requested 4,000 square feet as a tier 2 would not see a reduction, but an applicant who requested 8,000 as a tier 2 would be reduced to 7,000.

 In some respects, this announcement is not a complete shock, since we already knew the state-wide canopy size restriction was problematic.  With 2,858 producer license applications outstanding, the current demand for plant canopy far exceeded the 2 million limitation.  That said, few in the industry would have guessed that the LCB would limit applicants to one producer's license.


 This development is not the end of the story.  Many expect the LCB to revisit the state-wide canopy size allotment in the coming year, especially in light of recent state bills which merge the medical marijuana market into I-502.  If this "merger" were to happen, many expect the LCB to increase the state-wide canopy limit in order to accommodate the existing medical market demand.  When and how this will occur is yet to be seen.