Medical pot merger creating winners, losers

Those green crosses that have sprouted across Washington since voters approved medical marijuana in 1998 will get a severe pruning come July 1.

That’s when medical marijuana dispensaries must either have a license or close under a law passed last year.

In Tacoma, the city estimates that more than 60 medical dispensaries were operating at one point in 2015 in addition to a handful of state-licensed recreational marijuana stores. By late summer, Tacoma could have one-fourth that many stores with only some catering to medical patients.

That’s if city officials don’t decide to cap the number of stores even further. They are balking at the state’s plans to double the number of retail marijuana licenses in the city.

To accommodate the absorption of medical dispensaries into the state’s regulated market for recreational pot, regulators increased the number of available marijuana retail licenses from 334 to 556. Tacoma’s allotment went from eight to 16.

The city is already home to nine state-licensed recreational marijuana stores. On Tuesday, the City Council called a time-out on local approvals for additional pot shops until the Planning Commission can consider whether to put a limit on the number of stores or prohibit them from locating near one another.

The moratorium, which might last as long as six months, could delay the efforts of a few shops looking to become legitimate after years of operating on the fringes.

Triple C Collective, a medical marijuana dispensary, has been operating on Sixth Avenue since 2011. Because it is one of the dispensaries the state considers the most established and well-behaved, it has priority status for a license from the state Liquor and Cannabis Board. But a state license means nothing if the store can’t get the permissions it needs from Tacoma.

Brian Caldwell, managing member of Triple C Collective, said he is cautiously optimistic about Tacoma’s new rules. He said if the city decides to prevent marijuana stores from clustering together — which would almost certainly require his store to close because it is near another — he hopes the council will reduce buffers in other areas.

Currently city law prevents pot shops from locating within 1,000 feet of jails, transit centers, schools, day cares, drug rehab centers, libraries, parks and other places where children might be present. If the city relaxes the buffers, Caldwell said shops can spread to different neighborhoods.

“They do not want to restrict patient access, and they want to keep working with the people who’ve been good actors on the medical side,” Caldwell said Wednesday. “I support them coming up with a reasonable plan.”

Dispersion was a low priority for the council leading up to this year. But Tuesday, Councilman Robert Thoms said now that the state plans to double the number of stores for the city, it’s time to revisit the idea.

Mayor Marilyn Strickland said Wednesday that the city might allow a higher concentration of marijuana shops in some areas, just as bars cluster in some neighborhood business districts.

“As we talk about marijuana becoming more legalized and mainstream, we have to be open to the possibility of more business locations in some business districts,” Strickland said.

STORES EAGER TO RETURN TO MEDICAL MARKET

For some former medical dispensaries that already are squared away with state and local regulators, the coming July 1 deadline is a chance to return to their roots. It’s not only when unlicensed shops must close, but also when licensed stores that have received medical endorsements from the state can begin marketing to patients.

Urban Bud on South 24th Street in downtown Tacoma transitioned from a medical store to a recreational marijuana outlet a year ago. It made the switch to preserve its business and employee jobs, general manager Chandra Hall said.

“When recreational first came out, the rumors were that medical would go away,” Hall said. “We didn’t want the staff members to be without jobs.”

The store is eager to begin catering to medical marijuana customers again.

“We want everything regulated and tested and make sure everybody is getting the best product they can,” Hall said. “We’re just excited we can get our medical customers back.”

Emerald Leaves, a licensed recreational marijuana shop next door to Triple C on Sixth Avenue, also will have a medical endorsement. Thomas Kaapana, the store’s general manager, welcomes the consolidation of the two arms of marijuana sales.

“The way that medical is running right now, basically it’s an unregulated black market storefront with no testing, no qualifications other than wanting to be there and sell weed,” Kaapana said. “There definitely are some (dispensaries) that are doing it right. But some are just cashing in, selling weed in a gray area.”

Emerald Leaves will build an addition to its retail bar to accommodate the new medical section. Trained staff will help patients decide which product best fits their needs, Kaapana said. Currently, Emerald Leaves staff can’t give medical advice but there are computer tablets in the store connected to leafly.com, a website that has information about specific strains of marijuana and customer reviews.

Under state rules, stores selling medical marijuana would have to have a state-certified medical consultant on staff at all times, according to the Cannabis Board’s agency rules coordinator, Karen McCall.

Come July 1, stores also will have access to a medical marijuana patient database. Patients will be able to show their authorization to a dealer, who will then enter them in the database and issue a card.

While being entered in the database will not be mandatory to purchase medical marijuana, card holders will enjoy several benefits, according to the Health Department. Only they will be allowed to purchase certain medical products. They will still pay the 37 percent cannabis excise tax, but will not have to pay sales tax.

In addition, card holders will be able to buy up to three times the amount that non-cardholders can. The card is also a “get out of jail free” card of sorts.

“As long as you haven’t violated some other law when you get pulled over, you can’t be arrested for having three times the amount that is legal in your car,” said Chris Baumgartner, the Heath Department’s drug systems director.

While minimum age for recreational marijuana sales remains 21, health care professionals are allowed to authorize medical marijuana for a patient of any age.

Customers aged 18-21 can buy marijuana only with an authorization. Any patient under 18 is required to have the permission of a parent or guardian before purchase. The parent or guardian must also participate in the minor’s treatment, maintain sole control of the marijuana and be entered into the database.

Kaapana said his former job as the manager of a medical marijuana dispensary was the most gratifying he’s ever had.

“I used the job to bridge the gap between me and a 70-year-old Republican lady,” Kaapana said, referring to a cancer patient who sought marijuana to ease pain. “You’d see people, terminally ill, and you’d totally turn their life around.”

According to the Mayo Clinic, there is “good scientific evidence” that marijuana is effective in alleviating chronic pain and the symptoms of multiple sclerosis. Many other health claims are made, but the scientific evidence to support them is unclear.

Caldwell tests all of his products for strength and impurities such as pesticides. But there is no testing on which strains or products treat specific medical conditions.

“Right now our state does not acknowledge there are medical properties to it. We look forward to when they tell us there are medical properties to it and we can test for that,” Caldwell said.

PATIENT ACCESS A CONCERN

Amber Lewis, a consultant and lobbyist for Triple C Collective, questions if there will be enough medical-focused businesses after July 1.

Currently, 156 medical endorsements have been issued to retailers statewide, representing about 70 percent of the stores. That number will climb, but for now lags the 331 medical dispensaries that a consultant for the Cannabis Board counted last year.

“A big fear among patients, particularly those suffering from AIDS and cancer and some of the pediatric patients — children using this therapy — I think there is a real concern whether or not they will be able to get the CBD (cannabidiol) concentrates that they need,” Lewis said.

Cannabidiol is one of many cannabinoids found in marijuana. Cannabinoids are the active components of marijuana. While c (THC) might be the most well known and is responsible for the high that users get, cannabidiol is touted in the medical marijuana world for its alleged medical benefits.

“Will someone in a rural community have access to (a medicinal focused business)? I don’t know. That’s pretty scary from a patient’s perspective,” Lewis said.

Char, a Port Orchard resident, is one of those patients.

“That’s pretty scary when it’s your life on the line,” Char said. The lung cancer patient didn’t want her last name used because her primary care doctor has threatened to stop seeing her if she uses cannabis products to treat her disease.

Char rejected chemotherapy, radiation and other therapies in favor of using a cannabis infused oil. She purchases it at The Herbal Garden, a dispensary on South 28th Street in Tacoma. But that may soon change.

Herbal Garden owner Louis Archuleta said he’s facing closure.

“The Liquor Board contacted me and said ‘the city is fighting your application,’ ” Archuleta said.

The city of Tacoma is recommending denial of a license to Archuleta because his business resides in a city buffer zone that includes a correctional facility, according to planning division manager Brian Boudet.

That alone would not preempt the state from issuing Archuleta a license. The Liquor and Cannabis Board does not take into account local laws or bans in deciding license applications. But it could prevent Archuleta from getting the local approvals he needs to stay in business. “It’s up to the licensee to be in compliance with local regulations,” said Brian Smith, a spokesman for the Cannabis Board.

Since opening in 2011, Archuleta said he moved once at the city’s request because the business was too close to a park.

“I have no problem with them changing (the rules). That’s their right. But when you don’t grandfather an existing company … when you have a problem with me, you should have addressed that two and a half years ago,” Archuleta said.

Archuleta’s attorney is working with the city to remedy the situation. Until recently he’s had few problems.

“I would never have gotten into this business without the support I’ve gotten from the state and local authorities,” Archuleta said. “All I’ve ever wanted is a legit business.”

City officials expect to act quickly on the new rules for pot businesses so that shops aren’t caught in limbo for long.

“I would hope that we expedite this process,” City Councilman Joe Lonergan said. “I am not interested in cutting off access to these patients.”

More importantly, stores that hope to survive must make the state’s deadline. Medical marijuana stores that fail to get state licenses by July 1 will be shut down, Smith said. Enforcement might take the form of rescinded business licenses and fines.

“They are illegal today,” Smith said. “They’ve just been allowed to proliferate.”

This story was originally published January 16, 2016 at 9:45 AM with the headline "Medical pot merger creating winners, losers."