Washington Pot Is 'Definitely Cool,' But Some Businesses Struggle
When you talk to the state’s licensed growers and sellers of marijuana, you discover that many initially opposed Initiative 502. They favored marijuana legalization, but they didn’t like the details of the initiative itself.
That was the case for Danielle and Juddy Rosellison of Bellingham, Washington. But once voters approved the initiative, Danielle said they jumped right in.
“We got two mortgages on the two homes that we own," she said. "I called all our credit cards and told them I was going to put a BMW on it and they extended our limits to ridiculous amounts.”
It still cost far more than they anticipated. But now the results are visible. Their company, Trail Blazin’ Productions, operates a 17,000-square-foot warehouse licensed to produce and process marijuana for state retail stores.
For the Rosellisons, their favorite stop on the warehouse tour is the “flower room,” where plants are kept in orderly but tropical conditions with bright lights and whirring fans.
“It makes me so happy to be in here every time,” Danielle said.
“We’re doing it.” Juddy added. “Eighty degrees, 50 percent humidity, slight breeze. Good work environment.”
They plan to eventually have six of these rooms.
This month they expect to make their first shipment to licensed retail stores. And Danielle said investors are eager to help them.
“Now we have people calling ALL the time,” she said. But when they most needed the money as one of the first 502 businesses in the area, investors were hard to find. And businesspeople at chamber of commerce events avoided eye contact.
“Nobody was talking about it, it was so hush-hush, even the investors we found were super hush-hush," Danielle said. "They didn’t want us to tell people. Our parents didn’t want us to tell people. It was NOT cool.”
Attitudes started changing after Jan. 1, 2014, when Colorado's marijuana stores opened. Now Danielle gets a very different response from investors, public officials and her own family.
“As the year has gone on we are definitely cool,” Danielle said.
That family support is crucial, because their license forbids having anyone under age 21 in the warehouse. That includes their children ages 2 and 4. Juddy said the kids used to ride skateboards in the unfinished warehouse and beg for rides on the forklift. These days they have to stay at their grandmother’s house whenever both parents are at the business.
Danielle said their parents are also a big help financially – they'll be buying Christmas presents for the kids, because getting the business off the ground has left them financially strapped.
Despite the hurdles, they say Washington state is pretty much getting things right in its approach. Danielle said the slowness of the process has been a bit overblown.
“People have been waiting for this to happen for decades, and it’s happening right now,” she said. “So rather than being like, ‘It’s so slow,’ can’t we be super excited that it is happening?”
Added Juddy, “My opinion is this is a big deal, it’s still a Schedule 1 narcotic and if not done right the feds will pull the rug."
Further south in Shoreline, Washington, retail store owner Maria Moses is feeling apprehensive. Her marijuana store, Dockside Cannabis, is polished and filled with light. It’s been open for five days and she has no shortage of marijuana to sell. But unlike Seattle’s grand opening in July when people lined up hours in advance, there’s been little fanfare and Dockside is pretty quiet.
Moses said she knows these retail stores will appeal to certain customers.
“If you’re comparing this to medical or the black market, there’s no comparison just on price,” she said. “We will probably attract the people who, one, care about the fact that they’re supporting local business, the tax money that they’re paying is going to some good things for the state, and that everything here is tested.”
Moses and the Rosellisons said banking remains a huge challenge for their businesses – they mostly got them off the ground with cash. And Moses had another consequence of her role in the marijuana business. Her financial advisors recently said they no longer wanted custody of her retirement fund, even though the savings was from her previous job at Microsoft.
“Ameriprise was dropping me as a client for an IRA that I had where every single penny into that IRA was from working in the software industry," she said. "Not one penny was from the marijuana industry."
Ameriprise dropped the account to comply with federal banking regulations. A spokesperson explained that future contributions and fees from someone in the marijuana business could have run afoul of federal prohibitions on money-laundering.
Moses said she was able to transfer her retirement account to a new firm, where she declined to discuss her current profession. The financial advisor looked “a little quizzical,” she said, but didn’t pursue it.
Moses said the experience taught her that Washington’s new transparency about marijuana has its limits. But she knows there are people in other states who would love to have her problems.
“All across the country there are people who have lost their freedom, and families who have been destroyed over this plant," she said. "And here I am complaining about, ‘Oh I had to transfer my IRA.’ So, you have to keep it in perspective, too."
That Washington’s marijuana system was open to small businesspeople like Moses and the Rosellisons was a deliberate decision by the Washington State Liquor Control Board.
Chris Marr, a board member, said the board considered whether to license a small group of mega-growers, which would have been easier to regulate and oversee. But he said the existing growers spoke loud and clear: “They intended to participate and if we did not give them the opportunity to enter the market, they would choose to do so anyway.”
The low bar to entry resulted in thousands of applicants and a higher failure rate. About a third of the anticipated retail stores have opened their doors since recreational marijuana became legal to sell. Some can't find compliant locations because cities and counties have banned them. But Marr said the regulatory system has avoided the increases in impaired driving, diversion and youth access that many had feared.
“For us that was much more important than a headline that said, we opened 300 stores in six months,” he said. “And we were willing to accept that tradeoff.” He considers their regulatory system a success as far as legalization is concerned.
“Listen, someone that wants to obtain marijuana in this state can obtain it," he said. "We hope they obtain it through our recreational stores, but there is no one that’s going around saying, ‘I have no ability to obtain marijuana.’”
Marr is retiring from the Liquor Control Board to work as a lobbyist, but not on marijuana issues. He may work as a consultant to other states as they create their own regulations for legal marijuana. He said he’ll watch from the sidelines as legislators decide whether to lower marijuana taxes, to share more money with local governments (to give them "some skin in the game," he said), and how to tackle illicit marijuana and boost traffic in the state-licensed stores.
While fellow Liquor Control Board member Sharon Foster recently told KUOW she uses pot brownies to cope with the pain from knee surgery, Marr said he prefers the occasional martini over marijuana -- but not because he dislikes the industry.
In fact, he complains about a "stigma" that causes communities to treat marijuana businesses differently from craft distilleries.
"I haven't heard any Chamber of Commerce say, 'We'd really like to invite these businesses in and be part of a ribbon-cutting of an industry that's creating many thousands of jobs'," he said.
For those who do use marijuana, Marr said he hopes they'll buy it from licensed stores and generate some tax revenue.