by Dominic Corva, Social Science Research Director
This blog post skips the politics of 5052’s legislative process and focuses instead on how 5052’s mandated “merit process” for approving new I 502 retailers, ostensibly as a window for existing Medical Access points, was defined and implemented, between July 2015 and February 2016. It’s a post about an unfinished process, given that three of our interview subjects aim to be part of that transition but their individual processes are not completed. Dockside has two locations open from the first application window and three from the second wave in process; and Herban Legends transitioned to a new I 502 location almost as soon as the second wave application process achieved lift-off in January.
One of our other three applicants remains unapproved to transition and has a lawsuit pending against the WSLCB over whether there was in fact a merit process; another has fought to remain open in their current location until a Jul 1 switch over, and the fifth interview subject has closed her Access Point down while working to open in another location by July 1. All three in this group received letters from the WSLCB in January 2016 stating that they would remain open at their peril, since they were too far down the Priority I merit list to expect to be approved for Seattle. A flurry of media coverage ensued, as well as a different lawsuit, and about a week later two of these three applicants were informed that they were approved for Seattle, after all.
Which is to say that our Transitioner sample had a very diverse experience with the second retail application round. One of them made the top of the Priority I application list for Seattle; one of them and each of his two other business partners cleared the approval bar right away (two in Seattle and one elsewhere); and the other three have had to fight for Transition approval for different reasons with one of those still fighting.
Now that you know the current status of the results, let’s review the context for these highly variable outcomes.
SB 5052 directed the WSLCB to create a second retail application window based one merit criteria, which the WSLCB would also develop. This process began early summer 2016, not long after the bill was signed by the governor. Interestingly, the merit language appears to have been developed in the legislative process by UFCW, who intended merit criteria to include stringent labor standards. Those merit standards were recently folded into the renewal process, after closed-meeting pressure from the UFCW. It would have been bureaucratically difficult, if not impossible, to triangulate labor standards when the LCB’s main legislative obligation was to re-create Medical Cannabis access for the State by July 1, 2016.
So the initial challenge faced by the LCB was to define merit criteria that was focused on defining what criteria could plausibly be used to identify Medical “good actors” who deserved a chance to get into the I 502 system — especially since the previous window’s lottery process made such qualifications irrelevant.
However, the lottery results were still active — all of the lottery applications from the previous window had numbers, and had been promised that if their numbers came up, their applications would be processed. A second window had to fold the first window in to avoid lawsuits from hundreds of still-pending applicants further down on the lottery draw.
As a result, the LCB settled on two merit criteria that would define three Priority Tiers. The first criteria was, did you apply in the lottery round? And the second was, had you been paying taxes since before January 1, 2013 — roughly, the timeframe in which I 502 had become a reality. Priority I was the list for applications that met both criteria; Priority II was for applications that met the second criteria without the first; and Priority III was for applications that met neither criteria.
Effectively, the primary merit consideration became, did the application include someone who had applied in the lottery round. The secondary merit consideration had to do with whether someone on the application had belonged to an Access Point collective garden, evidenced by tax receipts. The prioritization of lottery applicants meant that every existing I 502 retail store had in hand the primary merit consideration. And that every access point that hadn’t applied did not. Those with the easiest route to Priority I status were access points open and paying taxes before 2013 AND a lottery application in hand. Four of our five Transitioners met those criteria.
A marketplace developed for applicants that had one of the stated merit criteria and not the other. This became especially clear when most of the new retail allocation went to existing I 502 recreational stores, all of whom partnered with a criteria-eligible access point business partner or collective garden employee to meet both merit criteria. Applications were cobbled together to meet both criteria, usually in exchange for business partnership or payout, to such an extent that by mid-November more than 800 retail applications had been received by the WSLCB. That number increased considerably through the March 31, 2016 closure of the second retail window. In the book, we will look more in depth at merit criteria and the way it affected who was able to transition and who was not.
Parallel to the development of the merit criteria, the WSLCB found its retail window process challenged unexpectedly by another powerful State political force, the Association of Washington Cities. The new window was originally conceived as uncapped and indefinitely open: applications would be accepted, assigned a Priority Tier, and then approved on a rolling basis, at LCB discretion. Jurisdictions revolted en masse, individually and through the AWC, citing concerns about clustering and not willing to leave it to the LCB how many could open in each jurisdiction. Even Seattle pressured the LCB for a capped process that would specify how many per jurisdiction would be available, and to close the window sooner rather than later. Some of this pressure was amplified by a new I 502 trade association representing existing I 502 retail stores that clearly didn’t wan’t more competition. But jurisdictions backed up their concerns with a promise to limit new retail stores by zoning them out of possible locations and establishing minimum distance to existing retail stores.
As a result, the LCB initiated a process for determining how many new retail stores could open, and in mid December announced specific allotments per jurisdiction as well as an end-date to the window process. That’s a story for another post, but the takeaway point to this narrative is that the second window application process was shaped considerably by political pressure on the LCB after 5052 was passed. The messiness and discontinuity of that process can’t be laid at the feet of 5052 itself, nor the bureaucracy charged with its implementation. The difficulties with defining merit and the ease with which existing I 502 retailers gamed the system to grab new stores at the expense of possible Medical Transitioners is not strictly the fault of the legislature, nor of the LCB, but broader political and economic developments concerning I 502 in the rest of the State. In the book, we address the complexity of these power relationships as they were experienced by our interview subjects.