Washington’s Retail Cannabis Lottery: What The Winners And Losers Should Do Next

Now that Washington State’s Liquor Control Board has come out with its list of retail license lottery winners, the locations of those winners has become clear.

Or has it?

To our surprise, the hot button issue has been whether it is possible for a winner at one address to relocate to another, previously unlisted/unrevealed address. The short answer is yes. The long answer is yes, but be sure to do so correctly so as not to jeopardize what you have already achieved by winning at the lottery.

Now that the list of retail cannabis winners is out, along with their locations, winners are, quite logically, re-thinking their locations. Do they want to be right near a bunch of other retail cannabis businesses when there are various other open locations that would give them greater distance from any competition? Do they want to be in neighborhood X which is far less dense than neighborhood Y? Now that I have won, where is the absolute best place to locate my retail marijuana business? Can I operate a mobile business like a food truck? Probably not. Another concern is local law. Some city and county ordinances mandate that State-licensed dispensaries be located a certain amount of feet from each other (even though State law didn’t).

Seattle Times’ pot reporter, Bob Young, squarely addressed the relocating issue in his article, Who won the pot-shop jackpot, and where the stores might be, and he did so (wisely we might add) by asking the expert on such things, Canna Law Blog’s own cannabis business lawyer, Robert McVay:

But in an indication that not all lottery winners will rush to open stores, Peterson said he was in no hurry to compete with medical-marijuana dispensaries. He wants to see what kind of competition surfaces from nearby recreational shops, and he wants to know if he can relocate to another location in Seattle.

Applicants can change locations within the same city, said attorney Robert McVay, who specializes in advising pot entrepreneurs. Changes in lottery-winning locations might also occur if state officials made mistakes in the screening process.

The article goes on to talk about lottery participants who may have been unfairly blocked from participating. A previous Seattle Times article, Pot-store lottery losers, winners plot next moves, discussed how some lottery loses are looking to make deals with the winners. In our post, Washington State Cannabis Retail Lottery Results Trickling In. What To Do Next, we very briefly touched on the legal issues involved in such a deal.

Bottom Line: If you won in the lottery, it behooves you to at least explore whether your listed address is best for your new cannabis business. If you lost in the lottery or were stricken from participating in it at all, it behooves you to at least explore your other options, which may include your buying into one of the winners or getting into an auxiliary cannabis business.

UPDATE on May 6, 2014:

We received clarification today from the LCB regarding a retail lotto winner’s ability to move their location post lottery. Here are the essentials you currently need to know:

  1. No lotto winners can move their winning locations at all with a few distinct exceptions:

-Those applicants that had validly executed letters of intent for their locations who were also competing with other applicants on a given property will be allowed to re-locate within their lottery jurisdiction if they don’t obtain a lease on that initial property;

-A change in local zoning affecting a lotto winner’s ability to open at their proposed location will warrant a change of location; and

– If an applicant had multiple applications on different locations within the same jurisdiction and wins on one location, they will be able to move that location to one of their other losing locations within the same jurisdiction.

2.   If an applicant is found to have applied on an invalid location, they will not be given any opportunity to move their location and will be dismissed from application processing. Moreover, if you find that a given applicant has a proposed location that violates the rules, you can e-mail the Liquor Control Board and, if your allegations prove to be correct, that applicant will not be permitted to move and will be removed from application processing.