State Liquor Board Cuts Back How Much Legal Pot Producers Can Grow

Feb 19, 2014

Applicants to grow recreational pot in Washington could have their state licenses in hand two weeks for now. But they won’t be able to produce as much marijuana as they originally thought.

Washington’s Liquor Control Board Wednesday instituted new limits designed to avoid a market glut.

Why The Change?

Here’s the problem. Nearly 3,000 would-be pot growers applied for a state license. Some back-of-the-napkin math by the Liquor Control Board revealed the state was on track to exceed its own production cap by nearly 18-fold.

So what to do? The agency won’t allow growers to hold multiple licenses. And growers will only be able to produce 70 percent of what their license allows, at least initially.

Chris Kealy had applied for three licenses to grow 90,000 square feet of marijuana. He’s even got a building under construction. Now he’ll only be able to grow one-fifth of what he was planning, but Kealy’s not complaining.

“We understood the risk we were taking and respect the decision they are making,” Kealy said.

Kealy wants Washington’s experiment with recreational pot to work. He says if the state overproduces marijuana, it will end up on the black market and that will invite federal intervention. In the short term, Kealy says he’ll sublet the extra space in his warehouse.

What About Local Moratoria?

Washington’s Liquor Control Board has also decided to proceed with issuing licenses to applicants even if that license conflicts with a local government ban or moratorium on pot businesses.

So far Lakewood, Sea Tac and Wenatchee have instituted outright bans on marijuana businesses. More than 30 other cities from Kent to Richland have enacted temporary moratoria. That’s according to The Center for Study of Cannabis and Social Policy. 

Liquor Control Board member Chris Marr says the decision to move ahead with the issuance of licenses is not an “in-your-face” response to local moratoria. The board also notes that a state marijuana license is not a license to operate; applicants must still comply with local regulations.