WA Lottery Losers Plan Lawsuits, Consider Launching MMJ Businesses

Business owners in Washington state who lost out on the recent lottery for recreational cannabis store licenses are already planning their next move.

For some, that means filing lawsuits against the Liquor Control Board, which organized the lottery. Others are weighing whether to start medical marijuana dispensaries in hopes that the state will not shut down those businesses.

Ryan Kunkel and Joel Berman told The Puget Sound Business Journal that they are suing the state liquor board over the methodology it used in the lottery. The two men own Have a Heart, one of the largest medical marijuana chains in the state. They believe that the board allowed some entrepreneurs to game the system by submitting multiple business applications for the same location.

They are also upset that the the state initially required applicants to secure a lease but then changed the requirement to allow non-binding letters of intent from landlords. The two men said they already signed a lease and were stuck paying rent.

At least one business owner who lost out is planning to open a medical dispensary in hopes that the state will not pass legislation to shut these businesses down. Pete O’Neill began paying a $7,800-a-month lease starting in September in hopes of winning a spot. He did not get a license but said he will now open a medical cannabis dispensary – which are technically illegal but have been allowed to operate – there instead.

In a statement, the LCB stood behind its lottery methods.

“The system was sound,” it said. “We are communicating with applicants who were not successful in the lottery and showing them what we have. If we made a mistake we’ll own it. However, we’re seeing few questionable ones. There is an appeal process for those that wish to proceed.”

 

5 comments on “WA Lottery Losers Plan Lawsuits, Consider Launching MMJ Businesses
  1. Clark_G on

    The lottery was a joke. I was talking to my garden shop’s owner last week who told me several stories how corrupt the whole thing was, things like WSLCB employees having financial stakes in lottery applicants, dispensary owners offering and receiving the go-ahead to give up their dispensaries for a guaranteed lottery win, WSLCB secretly disqualifying license applicants while telling them all the while they’re in the lottery for a license, etc. Add to this the Washington legislature couldn’t pass a bill to merge the medical and recreational markets (legislature doesn’t convene again until January ’15). This fall we will have MMJ dispensaries selling $8-12 grams side by side with state rec stores selling heavily taxed grams starting at $15-16. This is a recipe for a major clusterfu*#. WSLCB has made so many enemies of people they need for their project while giving a steroid shot to the black market, good job! *sarcasm*

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  2. victoria smith on

    Coloradan here – WA’s lottery was a terrible idea. If we’re legalizing cannabis, do it an open-market highly-regulated way (like CO). Zoning laws, capital and operational and labor and product control rules – all those things limit entrants into the market. Why a lottery on top of all that? Does WA have a lottery for liquor licenses? If yes, then you all are a little more backwards than I thought.

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  3. Pebbles Trippet on

    Cannabis is sui generis, a thing of its own kind, & does not fit within the confines of a Liquor Control Board. Every state would be better off with its own Cannabis Control Board, assessing a myriad of associated issues thru public hearings, workshops, in-depth commentary.

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  4. Joe M. on

    I could not agree more with victoria smith. A recent resident of Washington State myself, it was quickly apparent that this state is highly motivated to tax you to near death. A fee for everything. The WSLCB has their head in a well known black hole. If you are going to open the market, then open it. I find it ironic that the differences in restrictions between cannabis and alcohol are what they are here, knowing full well that alcohol is the legal killer, not cannabis. Seeing the explosion in medical they tried unsuccessfully to capture a larger tax base this time. I hope they fail again next time. Leave the WMMP out of it. Stop changing your minds and allow nature to cultivate itself!

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  5. Mike D on

    I agree with all of you, but the WSLCB is just trying to appease the people that were flat out against legalization and those that were worried it would explode and be on every street corner. The guarantee that there will only be x amount of stores makes them feel better. I would anticipate that in the future things will get relaxed quite a bit as the public becomes used to it.

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