With no recreational marijuana license in hand, the owner of Capitol Hill’s last remaining medical marijuana dispensary is preparing to close his doors for good. Shy Sadis said Starbuds could be closing at 23rd and E John as early as next month, but he’s vowing to continue a legal battle with the state over it’s decision not to award him a new I-502 license.
Long standing, law abiding medical marijuana dispensary owners expected to be at the front of the line when the state began its latest round of issuing recreational pot licenses. That’s because to fully phase out the medical marijuana system by July, the state Legislature passed a bill to give those shop owners priority to transition to recreational pot businesses. Under the new system, patients will purchase tax-exempt medical marijuana at recreational shops that have a medical endorsement starting July 1st. Home growers and cooperatives will also have to scale back.
In January, Seattle was allocated 21 new recreational licenses, all of which have been issued or are in the final stages of approval, according to the state Liquor and Cannabis Board.
After opening his first Seattle dispensary in 2010 and Starbuds in 2013, Sadis said he thought he would be a shoo-in for a recreational license. He was wrong, and now Sadis, who also owns The Joint Cooperative in the U-District, is facing the possibility of having to leave marijuana retailing all together.
(Image: Star Buds)
In addition to dispensary owners, the LCB also granted top priority status to employees of medical marijuana shops who were allowed to join with other non-cannabis entrepreneurs in their application. Sadis said that vastly expanded the applicant pool and lead to most licenses getting sucked up before current shop owners had a chance to weigh their options.
“It was meant for people like myself who were pioneers in the industry and were a true priority one,” Sadis said.
In January, Sadis joined with other dispensary owners in a lawsuit against the cannabis board, arguing that such “cobbled together” applicants violated the Legislature’s intent to transition dispensaries from the largely unregulated medical system to the highly regulated recreational one.
“We’re saying the process is flawed,” said attorney Moe Spencer, who is representing the dispensary owners in the case. “(The LCB) are setting up the priorities incorrectly.”
While a Thurston County Superior Court judge denied a motion to stop the LCB licensing from moving forward, the case remains open. Spencer said one possible remedy would be to have the court require the LCB to increase the number of licenses to allow dispensary owners a chance at staying alive.
“Seattle got gobbled up quick,” Sadis said. “I’m hoping they do the right thing and give us licenses.”
Meanwhile, Sadis is preparing to shut down Starbuds. Even if he did secure an I-502 permit, the shop’s location was too close to Miller Playfield to comply with Seattle’s marijuana zoning buffer laws for I-502 shops. Sadis said he’s now on the search for a new recreational location, ideally on Capitol Hill, incase a license comes through. That could prove to be more challenging since Seattle’s buffer laws now also include a provision to keep stores from clustering together.
However, not all dispensary owners lost out in the changeover. A West Seattle medical marijuana entrepreneur was recently given the green light to open Lion’s Heart at 15th and E Republican. In December, Ruckus, Capitol Hill’s first pot shop, opened on the same block. Previously, Uncle Ike’s opened at 23rd and Union in fall of 2014. Some of the clustering behavior forced by Seattle’s zoning restrictions played out when Ponder opened a few blocks away in fall of 2015.
All medical marijuana dispensaries without an I-502 license will need to close by July 1st, bringing the the medical and recreational systems under one roof — sort of. The state Department of Health, not the LCB, will still be responsible for regulating medical marijuana. At least 24 Seattle shops have already acquired medical endorsements, according to the LCB.
UPDATE 2:15 PM: The owner behind the Lion’s Heart company working to open the second retail pot shop on 15th Ave E in a building belonging to Uncle Ike’s owner Ian Eisenberg has also applied for a marijuana retail license in White Center.
According to state records, Daniela Bernhard has applied to open a business called Uncle Ike’s at a location on 15th Ave SW.
The I-502 rule set doesn’t restrict Eisenberg from ownership of additional pot shops but it is also possible to license the business name to another license holder. Eisenberg is not part of the White Center application, according to the state. We’ll have to wait to see how all the puzzle pieces fit together. Eisenberg has declined to comment on the recent application and license activity and Bernhard has not responded to our inquiries.
