The city of Tumwater and its urban growth area could have a new slogan: Instead of “It’s the water,” once famously associated with the former brewery, it could be “It’s the bud.”
That’s because through the right combination of available warehouse space, industrial parks and location requirements, the Tumwater area finds itself home to a cluster of marijuana growers and processors, according to data from the state Liquor and Cannabis Board and the city of Tumwater.
In fact, Tumwater is thought to be home to one of the largest indoor producer/processors in the state, Tumwater officials and growers say.
A person who answered a phone at that business, Northwest Cannabis Solutions on Lathrop Industrial Drive Southwest, declined to comment for this story. The Lathrop area was annexed by the city of Tumwater in June 2015, said Chris Carlson, permit manager for the city.
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After Initiative 502 was passed in 2012, legalizing recreational marijuana, the state began the licensing process. To date, 902 producers have been licensed, according to the Liquor and Cannabis Board data. Of those, 667 applied to grow and process, 136 to just grow and 99 to just process, the data show.
The state is in the final stages of licensing some remaining producers and processors, said Brian Smith, LCB spokesman.
LCB data show about 30 applicants for the Tumwater area, with about 10 already doing business there.
Once the producer/processor has received a license, the next step is usually a visit to Tumwater’s Community Development Department. The city requires that the chosen space meet current building and fire codes and that applicants have a plan to address odors that might emanate from the property, permit manager Carlson said.
“There was interest right away, and it has been pretty constant,” said Mike Matlock, community development director, about the number of producers/processors that show up at the city.
Carlson said that’s because the city has multiple sites that meet the state’s location requirements. Mottman Industrial Park, Beehive Industrial Park, 85th Avenue Southeast and Lathrop Industrial Drive are not within 1,000 feet of any “elementary or secondary school, playground, recreation center or facility, child care center, public park, public transit center, library, or game arcade that allows minors to enter,” according to the LCB.
The learning curve about legal marijuana has sometimes been steep for Tumwater’s 10-person development staff, but now they have a better handle on the process, Matlock said. The exception might be in odor control, which Matlock and Carlson acknowledged as a “technological challenge.” They said the city is working through those issues.
Doc & Yeti Urban Farms was one of the first to be licensed and opened in Tumwater, operations manager Jared Apfel said. It moved into an 8,000-square-foot warehouse in the Beehive Industrial Park in March 2014 and made its first sale in September 2014. The business employs nine full- and part-time employees and delivers to retailers from Vancouver, Washington, to Shoreline every other week, Apfel said.
Payment, either cash or check, is expected at the time of delivery, he said. Doc & Yeti banks with Obee Credit Union in Tumwater, one of the few financial institutions to announce that it would provide banking services to the pot industry.
Although legal pot is a fledgling industry in the state, Doc & Yeti appears to have a relatively mature operation. It grows 15 strains of marijuana and harvests every week or two, followed by processing, which involves trimming, weighing, curing and packaging for delivery. The enterprise also has been willing to address concerns after receiving complaints about pot odors.
That has meant installing two charcoal-filtered exhaust systems to scrub the air of any lingering odors at a cost of $15,000, Apfel said. The complaints are thought to have come from a nearby residential development.
“We want to legitimize this business,” said Apfel, 40, who used to grow for a dispensary in Colorado. “We want to run our business, do our thing, and do the right thing.”
DOES TUMWATER BENEFIT?
The biggest beneficiary of legal marijuana is the state. To date, the state has collected almost $200 million in excise tax on $736 million in marijuana sales, according to the website 502data.com.
The website shows that Northwest Cannabis Solutions in Tumwater generates more than $1 million per month in sales, while Doc & Yeti generates about $60,000 a month. Apfel said the revenue picture improved after a 25 percent excise tax requirement was dropped in June 2015.
But Tumwater didn’t get much from the state after the first round of disbursements for pot enforcement. That figure is based on a percentage of sales generated by pot retailers, not growers or processors. Tumwater is home to one retailer — another is on the way — so the amount was just $6,500.
But producers/processors also use a lot of electricity, Tumwater Finance Director Ursula Euler said. Based on that use, the city expects to collect an additional $60,000 in utility taxes per year, she said.
“There’s not much impact except for the utility bill,” Euler said.