Washington relaxes limits on retail marijuana licenses

The top graph is an indication of the legal marijuana industry's economic benefits in counties. It is the sum of the value of marijuana production, processing and retail sales, divided by each county's estimated 2015 population. The lower graph analyzes retails sales only. It reflects the dollar value of marijuana sold to end consumers in each county on a per capita basis. Sales both to residents and nonresidents are included.

LONG BEACH — An odd quirk in Washington state’s legalization of marijuana that resulted in Pacific County’s retail outlets being clustered in the Raymond area could soon be resolved.

As first reported earlier this month by KUOW in Seattle, the Washington Liquor and Cannabis Board notified the state’s cities in September that it is accepting applications for new marijuana retail licenses. License quotas and lotteries initially used to award licenses have been abandoned. There now are no specific limits on the number of licenses that can be granted.

When Initiate 502 was first implemented, Pacific County was allowed two retail licenses. A lottery was held to decide which applicants would get these licenses. As it happened, both went to north Pacific County, with none for the highly “touristed” Long Beach Peninsula and south county. This spring, Washington lawmakers expanded the retail licensing process to existing medical marijuana businesses, and both these also are in the Raymond-South Bend area.

The state has commissioned the RAND Corp. to estimate how much marijuana Washington residents are consuming. Liquor and Cannabis Board spokesman Mikhail Carpenter told KUOW the agency will look to RAND’s forthcoming report for guidance on how many licenses to allow.

“Estimating the size of that market will help inform the amount of retail licenses that are issued,” Carpenter said. “While there is presently no cap, we have also been very upfront about the fact that we may shut it off.”

A new round of retail licenses may be approved by spring 2016. Applicants have to pass background checks and meet other requirements.

The state shows a total of 20 additional license applications pending but not yet issued in Pacific County. Some of these are likely to represent duplicate filings by license hopefuls who tried to bolster their chances of winning the original license lottery by “buying more than one ticket.” There are six pending applications in Long Beach, four each in Chinook and Ilwaco, two each in Ocean Park and Seaview, and one each in Grayland and Raymond. The ability of license holders to actually open businesses in any of these towns will depend on local zoning, state rules governing the placement of marijuana stores, and other considerations.

In the 2014-15 tax year Pacific County generated more marijuana revenue per person than all but one of Washington’s 39 counties, according to analysis of a Liquor and Cannabis Board report. The Port of Willapa Harbor in Raymond has become one of the state’s major centers for production and processing of marijuana.

The county generated nearly $5 million in total legal marijuana transactions between July 1, 2014 and June 30, 2015, or about $232 for each of the county’s estimated 21,210 residents. The only county where marijuana played a slightly larger economic role was Lincoln, just west of Spokane, where sales totaled about $2.5 million, or $236 for each of 10,720 residents. Klickitat County was in third place, with $174.35 per person. The state average was $36.72.

Pacific County sales generated more than $1.23 million in taxes during the fiscal year. The statewide tax total was nearly $65 million. King County, which surrounds Seattle, had the largest sales total — more than $59 million in all and $48 million in retail sales — which produced almost $14.8 million in taxes. Spokane County was second, with $37.1 million in sales about $9.3 million in taxes. Clark County/Vancouver was third, with $27 million in sales and $6.75 million in tax.

In terms of just retail sales, Pacific County totaled $617,733 for the 2014-15 year, or $16.41 per person, compared to a state average of $25.44. The Columbia River Gorge county of Klickitat had the state’s highest marijuana sales per person, $64.34. Of the 30 counties with retail marijuana stores, Lewis County recorded the lowest rate of sales per resident, $2.72. In several cases, retail marijuana sales were substantially higher than average, noticeably in counties along the borders of Oregon and Idaho. Marijuana wasn’t legalized in Oregon until July 1 of this year, while it remains illegal in Idaho.

Among the 33 Washington counties where marijuana was grown and processed in 2014-15, Spokane produced the most — more than $15 million. Next came King County, $10.9 million; Snohomish, $8.7 million; Chelan, $5 million; and Pacific, $4.6 million.

To put Pacific County’s marijuana production in context, the latest available U.S. Agriculture Census — for 2012 — found the value of Pacific County berry production to be $6.9 million. Most of this was from Pacific County’s long-established cranberry industry. Aquaculture — primarily oyster growing — produced $22.4 million. County dairy farms generated $4.8 million in income. Cattle ranching produced $2.4 million.

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