Seattle Dispensaries Sue Oversight Board

Unhappy with how the new state licensing process is going, seven Seattle medical marijuana dispensaries have filed suit against the Washington State Liquor and Cannabis Board, alleging that the agency has broken several rules in recent months.

The suit, filed Friday in Superior Court in Thurston County, alleges that the board used “dubious methodology” to decide that Seattle will receive a handful of new licenses, instead of considering all 48 dispensaries that the city considers to be “in good standing” via a merit-based process.

The suit requests an injunction that would halt the current licensing process and require the board to start over, giving longstanding dispensaries another chance to obtain permits.

The list of plaintiffs includes Puget Sound Group, Post One, Cloner’s Market, KF Industries and SGSG, as well as two other dispensaries.

The seven plaintiffs, the suit reads, “are now in jeopardy of losing their businesses by virtue of the multitude of procedural errors committed by the (board)… Meanwhile, applicants who filed months later and have less merit are skipping toward licensure by virtue of this broken procedure.”

The suit contends that a new state law passed last year requires the board to use a merit-based system to decide which dispensaries will receive retail license under the recreational regulatory system. But it hasn’t done that, according to the suit.

The board also relied on a flawed report by BOTEC Analysis, an independent contractor that was hired to determine how many more licenses the state should issue, in order to satisfy MMJ demand, the suit alleges. That led to an uneven distribution of licenses among municipalities, and is especially egregious because the board knew the BOTEC report was not reliable, according to the suit.

The board also is unfairly requiring applicants to have a zero tax balance with the state, the suit alleges, and leaves out those who are on a payment plan – even though such applicants are legally paying their taxes over time.

One of the plaintiffs’ attorneys also said in an email that “ideally, the (license) cap gets increased statewide after a proper study.”

2 comments on “Seattle Dispensaries Sue Oversight Board
  1. Freeman on

    Dr. MacRae’s critique is spot-on. One need look no further than the graph and accompanying description on page 2 of the BOTEC report, where it is alleged that $690M is 55% of a $1330M pie, while $740M is only 48% of the same pie, to see a simple example of how obviously errant this amateurish effort to analyze the cannabis market really is. There are a multitude of other simple math errors throughout, but the Rube Goldberg twisted mess of procedural errors are where things really get weird.

    Reading the rest of the report, it appears likely that the expert group’s earlier attempts at estimating 690/1330 and 740/1330 using a regression model scribbled on the back of an envelope were even further off, but then they ground-truthed with a calculator. Determining that both the ground-truthing exercise and the original regression model represent valuable data points of equal weight, BOTEC researchers elected to include both in a Monte Carlo simulation to come up with new best estimates for these figures to put in their graph.

    That’s my best explanation for that graph.

    Reply

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