Washington State merchants scramble to start sales of recreational marijuana

While Washington State voters approved recreational marijuana in November 2012, licenses to grow and sell the drug were issued only Monday, and sales set for Tuesday.

More than a year and a half after Washington voters approved the recreational use of marijuana, the northwestern state on Monday issued the first licenses to grow, process, and sell the drug, making it available to consumers as early as Tuesday.

Washington, which voted on the issue in November 2012, joins Colorado, which began permitting sales of recreational pot at the start of this year.

Up to 20 stores could begin selling the various strains of marijuana to adults 21 and over by Tuesday, as Washington State’s regulations require growers and distributors to “quarantine” packaged orders for 24 hours, which are then tracked via bar codes with state-approved software.

"It's the middle of the night and we're standing here doing high-fives and our version of a happy dance," said Gregory Stewart, owner of Nine Point Growth Industries in Bremerton, to the Associated Press. "It's huge for us."

Mr. Stewart and his director celebrated early Monday morning after working out some kinks in the pot-tracking software, the AP reported, whooping it up when they learned they could begin to ship orders at 2:22 a.m.

According to state regulations, however, those who grow or process the drug are not permitted to sell retail pot directly to customers. Business owners need separate $1000 licenses to grow cannabis, and then to process and distribute the plant. A third license is required for retail stores, which cannot grow or process the plant.

But the process has proven frustrating for would-be pot businesses in Washington since voters approved the initiative. The state is building its weed-regulating infrastructure from the ground up, since it has had no previous provisions for medical marijuana, like Colorado and 22 other US states.

“It’s a mess,” said Kurt Boehl, a lawyer representing potential retailers and growers in the state, to NBC News. “People are still scrambling to get their paperwork in.”

There are about 80 licensed growers so far, state officials say, but only about 20 shops are expecting to open this week. Washington’s recreational marijuana law allows for up to 334 retail stores throughout the state, but its Liquor Control Board is still sorting through a backlog of license applications, which were determined by lottery and limited by region.

Still, Washington’s marijuana entrepreneurs face more than regulatory hoops. The drug remains classified as a “Schedule I” narcotic with the Drug Enforcement Administration, a classification that includes heroin and “ecstasy” and technically is considered the most dangerous and addicting by the federal government. Methamphetamine, also known as “meth,” is classified as a less-dangerous Schedule II drug.

The Obama administration says it has not stopped enforcing the federal ban on marijuana, but last year the Department of Justice issued a memo clarifying 8 areas of priority for pot prosecutions, including marketing to minors, connections to criminal cartels, and driving under the influence. But technically, selling pot remains a federal offense that could carry prison terms.

And few, if any, banks are willing to do business within the budding marijuana trade, since this is also a federal crime. This forces entrepreneurs to conduct all their business in cash, which could make them a target for robbers and put employees in danger.  

In February, the Obama administration deepened federal ambivalence about the growing marijuana industry when the US Treasury Department said banks could serve pot businesses under certain conditions. But most banks have said the guidelines are too vague and their legal jeopardy too onerous to open accounts for those dealing with pot.

Among the businesses in Washington that are set to open their new pot shops is Cannabis City, which will be the first recreational marijuana store in Seattle.

“I've had a long day. It really hasn't sunk in yet,” James Lathrop, owner of Cannabis City, said to the AP after hanging “grand opening” banners and putting the final touches on his store. His planned opening is on Tuesday, but not until noon.

 “Know your audience,” Mr. Lathrop said. “We're talking stoners here. I'd be mean to say they need to get up at 5 a.m. to get in line."