Week in Review: Washington licensing hiccups, Florida CBD & California MJ legalization

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By John Schroyer and Omar Sacirbey

Confusion emerges as Washington State licenses more marijuana stores, Florida moves closer to expanding its limited CBD law, and a California activist tries to breathe life into a marijuana legalization measure.

Here’s a closer look at several notable developments in the marijuana industry over the past week.

Transitional headaches

The newest licensing round for medical dispensaries hoping to stay in business in Washington State is almost over, the state’s Liquor and Cannabis Board (LCB) announced this week.

The confusion may be just beginning, however.

Some dispensaries involved in the licensing process as Washington rolls medical cannabis businesses into its recreational system have experienced issues in the transition.

Jeremy Kaufman, a co-founder of Seattle MMJ dispensary The CPC, already won and received one of the new licenses the state is awarding.

But because of some miscommunication from LCB officials, Kaufman said, he’s had to temporarily close down his dispensary.

The problem is he requested that his entire 3,000-square-foot dispensary be licensed under the new system. The request was granted, and Kaufman said he was told that he could continue selling medical cannabis (at a much lower tax rate than rec) at least until July 1.

Not so fast.

Another LCB official told him on Monday that he’s not permitted to do that under the new state regulations because there’s a jurisdictional conflict between the LCB, which oversees rec, and the city of Seattle, which oversees his medical business.

“So I’m scrambling right now, bargaining with the LCB to let me change my site plan so I can split the dispensary in the middle, with half medical and half rec until July 1,” Kaufman said. “It’s the biggest pain in the ass ever.”

Kaufman’s hoping that his revised site plan is approved by the LCB, and then he’ll be able to literally put up a temporary wall to section off rec from the medical side.

The lesson: If you run a dispensary and are seeking a license, beware of unforeseen hurdles.

The Florida 12?

Legislators passed a bill this week expanding Florida’s current CBD law, which allows the roughly 40,000 patients in the state who suffer from cancer and epilepsy to obtain low-THC medicine if they get approval from a doctor.

The bill, which still needs the governor’s signature, has already come under heavy criticism as being an inconsequential cosmetic change. But Jeff Sharkey, executive director of the Medical Marijuana Business Association of Florida, considers it a step in the right direction.

“It does help. Legislators are taking methodical steps in imposing the regulatory framework that’s needed,” Sharkey said, explaining that the bill addresses important issues that the original law doesn’t, such as testing, security, and who can handle plants.

It also could boost the market considerably and create new business opportunities.

If Gov. Rick Scott signs the bill into law – and Sharkey expects he will – terminally ill patients in their final year of life will be allowed to use full-strength MMJ, thereby expanding the patient population by up to 200,000 people.  

Additionally, if the patient registry surpasses 250,000, the state would license up to three more growers should the bill pass. One of those growers would have to be a member of the state’s Black Farmers and Agriculturalists Association, which had earlier sued the state for creating a licensing process that essentially shut its members out.

While the original CBD law allows five licensed producers/distributors, one nursery that didn’t win filed a permit protested and won – bringing the current total to six. There are also three more protesting nurseries waiting on a ruling.

In short, there could be 12 producers when all is said and done.

Long division

A decent-sized majority of Californians back recreational marijuana legalization, with polls showing support at anywhere from 55% to 60%.

But poll numbers don’t equal voter support at the ballot box. At one point in 2014, for instance, medical cannabis was polling at a whopping 90% in Florida, but an MMJ legalization measure failed to pass that November.

A fractured cannabis community in California therefore could easily lead to the defeat of one or more potential legalization ballot measures that are competing this year.

As indicated by a press release earlier this week from one longtime activist, there’s still deep division in California over just how legalization should look.

Steve Kubby, who announced that his company Kush Research is throwing $1 million in stock behind one legalization measure, also took a shot at the initiative backed by billionaire Sean Parker, the so-called Adult Use of Marijuana Act.

Kubby called Parker’s measure “highly flawed” and “controversial” but didn’t specify what he finds objectionable in it.

Regardless, the effect could easily be to split those in the state who should be most in favor of repealing prohibition and establishing an adult-use industry.

And given that the initiative Kubby is backing doesn’t look like it has much real support or money, it’s questionable whether or not the campaign will have the resources to mount a real statewide legalization push.

Kubby’s stock donation was even questioned as a possible “pump and dump scheme” in a report by the East Bay Express.

Parker’s initiative, on the other hand, already has over $2 million hard cash. Plus national supporters. Plus a number of former political competitors who have signed on as backers. Plus the billionaire himself to bankroll the campaign if necessary.

Recreational has already failed at the ballot in California once, in 2010. It’s not inconceivable that it could fail again.

For those who want to see a new recreational cannabis industry take root in California, it would be wise to unite under a single banner.

John Schroyer can be reached at johns@mjbizdaily.com

Omar Sacirbey can be reached at omars@mjbizdaily.com