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Bree is an enrolled member of the
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and former law clerk for the U.S.
District Court for Montana.
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that have enacted moratoria prohibiting
these otherwise legal businesses from
operating. The local bans and moratoria
have become a hindrance to the success
of I-502 and the legal marijuana market.
Because it’s brand-new as a legal enterprise, a lot of marijuana shops have
sprung up across the state. Do you believe many of those will survive, or will
market forces and regulation weed out
(I just couldn’t make it through this
whole thing without a play on words) a
lot of competitors?
I do think that some licensees went into
this business without sufficient capitalization and wherewithal to comply with
both state regulations and the ever-changing local zoning regulations. I am
hopeful that if the Legislature does bring
the illegal medical marijuana market
into the I-502 fold and provides some tax
relief to marijuana businesses, many of
these businesses will in fact survive.
Might the strict regulation of marijuana
financing (e.g., requiring owners and
investors to be Washington residents;
limiting the number of licenses one entity can hold, etc.) also maintain more of
a mom-and-pop nature to the industry
and resist large-scale corporatization?
It may keep the market small-scale,
but it may also keep the legal market
from reaching its full potential. Because
marijuana businesses can’t obtain bank
financing, they are limited to finding
private financing. The state’s residency
requirement for investors makes it that
much more difficult for marijuana businesses to find financing and restricts
the pool of investors. Similarly, the prohibition on vertical integration (i.e., producers can’t also be retailers) precludes
those with expertise in both areas from
using their knowledge and experience to
benefit the entire marketplace. Although
some of these rules may have been well-intentioned, they have made it very difficult for marijuana businesses to operate
and compete with the black market. N WL
MICHAEL HEATHERLY is the editor
of NWLawyer and can be reached at
email@example.com and 360-312-5156.