So you want to grow legally under 502?

[deebickle]

Alright, I hate the bullcrap and rules I see being proposed for Washington 502 adult marijuana use. But, I mean really, this is a chance to be a legal grower, pretty much a first in the world. Hard to pass up, and I think the rules might be doable. So I think I'll throw my hat in the ring and apply for producer/processor ($500 to apply), and $2000 for the two licenses. If I want to quit after one or two harvests, I should be able to cover costs. I want to keep it small, entire space needed would be about 1500 sq ft. My big unknown is our county zoning is undecided, if they don't come out with something soon, it'll be too late. I want to do it on my place, 20 acres of forestland with house. I don't know if the LCB would consider that as at a 'place of residence' or not. If they zone indoor growing in industrial only, then I'm looking at pretty serious rent, and hard to come by too, with everybody and their cousin thinking like me.

Anybody else thinking of doing this please join in with ideas. Like the required operational plan that needs to be included with the application. I think the LCB will give more guidance about what should be in the plan besides what's in the rules, but not sure.

I'm confused how the producer is supposed to sell without a distributor system, but I think that will sort itself out.

Any other people thinking seriously about being a 502 grower?

 

[mustang519]

Hey Dee: My journey started when 502 passed. Since then I have purchased property and Monday will be the final inspection to the 30 x 48 foot building I just finished. I will have two 12 x 8 flower rooms (4 x 1000w each) and a 12 x 8 veg-clone-mother room. I will also apply for a producer and processor license. I think that you will have to contact retail stores and set up your own distribution to them. The residence thing is a bit confusing, I think they will have to give us more information before I truly understand that part of the regulations. I hope to have the rooms in place in the next month. Good luck and keep moving forward.

 

[deebickle]

Wow, tang, you're on your way. So what do you figure is your optimal annual production from the space? Yeah, distribution will probably be like medical until a system gets in place that is more efficient. I emailed the LCB about the residence question and the response was clear. If it is an outbuilding that you are not living in then it would be considered okay by the state. Now the local zoning is another issue, but out of state control. So that means it is a possibility for my situation, depending on my local county zoning decisions.

Maybe I should ask a mod to move this to a different part of the forums....

 

[SunJ]

Like I said, mustang, I envy you. I still don't have my land, but I do have this picture of the 4200 square foot facility I want to build! dee, I know you didn't ask me, but I'm basing my model on a self-imposed 99 plant limit for the first several runs. As for distribution, I plan to designate one day a week for delivery, since I'll be set up on a perpetual weekly harvest. As I understand it, we can't use anyone but ourselves or an employee to do the delivering. And since I'll be a one man show in the beginning, it's going to be me logging the miles.

 

[Demurrer]

The license application window will be very short to prepare the application package. Especially the Ops plan for those who haven't done one before. I'm offering a 2 day workshop in Bellingham, Seattle, Vancouver, and Spokane on drafting the Business Plan. anyone interested can check out my website www.mjbusinessplan.com

 

[Demurrer]

I think the LCB will give more guidance about what should be in the plan besides what's in the rules, but not sure.

The LCB is going to provide a template for the Plan. At a minimum it will require everything they made a specific rule about but it will also require some form of financial disclosure. I'm assuming it will be the same 4 financial statements that are included in a standard Business Plan but we'll know for sure on Oct 16th.

 

[colonuggs]

just remember bros..... TAXES SUCK.

until the Feds change the marijuana from sch#1.... you will not be allowed any business expenses or tax deductions

As of yet Banks wont take marijuana money they closed business accounts related to the industry So all cash

 

[mustang519]

Dee: I am glad to hear about the residence. I want to build a house on the property next year. I passed the building inspection on Monday, and have started the electric and water to building. Trenches are in, pipe and conduit in place. I will finish the wiring and plumbing next weekend. I too will stay under the federal minimum number of 99. Can't take that chance. I hope to produce .5 grams per watt to start. That would mean about 2 kilos per month. I hope to get approx. 50 lbs per year (indoors). I also plan to have a solid wall greenhouse (12 x 16) that should add approx. 15 lbs to the mix. If I can keep costs down this should provide a good income for mom and pop. So far on this project is has been all pop. I have been able to keep cost under control but the amount of man hours is double what I calculated. Good thing I started early. Keep moving forward!

 

[deebickle]

Mustang - You are well along the road, but seems to me you are are maybe too far ahead. If the county or city you are in has not yet implemented marijuana zoning, what makes you think that the land you are building on will be in an approved zoning classification? Not trying to be on a downer, but when you apply to the LCB, the application will go to the local government for approval. If they say no due to zoning then the state won't issue license. At least that's my understanding of the process. I guess if you're in an agriculture zone, you might figure you'll be safe no matter what. But I would check with your county planning department.

As for the 99 plant thing, I think that is clearly off the table after the last DOJ memo, if you are following the state rules they are not looking at number of plants, period.

Demurrer - thanks for the link. Good idea to offer such a workshop. Can you tell me how a business plan differs from an operational plan? Seems like a business plan goes more into the financial side and the OP is more how things are going to be done.

 

[PurpleBuz]

As for the 99 plant thing, I think that is clearly off the table after the last DOJ memo, if you are following the state rules they are not looking at number of plants, period.

.

Do not count on the 99 plant count to be ignored. Regardless of the memo, if the feds decide to target you (for whatever bogus reason) they will come after you, and the 99 plant count is still in the law.

 

[deebickle]

Yeah, you're right, they can do what they want ultimately. But, under that reasoning, no one should get into 502 industry, because (regardless of 99 plant minimum sentencing) the Feds can bust your chops for any 'bogus reason', and deliver some severe penalties. A la Montana MMJ just recently. So why should anyone feel safe under 502?

 

[PurpleBuz]

its a matter of managing risk. If you go large (100s of plants), the risks are much higher.

 

[mustang519]

I have thought about the county and what action they might take. I do not have to worry about city zoning.... out of any town. The property is zoned agriculture. The worry is that the county will pass a moratorium. I don't think they could change zoning that would be contrary to state law but I am no expert. Yes I am early but I want to be ready when the process begins. I have been planning this well over a year when passage of 502 looked promising. The good news is the property is worth more now than when I purchased it so even if the worst happens (denied) I can recover my costs. Several communities around this area are not going issue city business licenses so they will have no ties to a federally outlawed business. They plan on allowing the retailers with out a city license. Still up in the air. If I get a license then the state of WA will be my accomplice in breaking federal law and the state will be getting a cut of the profits, I hope this will keep the feds at bay, but I will not take a chance on a minimum sentence. Not my kind of fun. For me this is a calculated business venture. I will pull the plug when.... denied, rules make it cost prohibitive, new local regulations, etc.

 

[deebickle]

Yeah, I'm with you both on this, I guess. Play it as safe as possible and be flexible. That's interesting, having the city basically ignore it to keep themselves from accountability. You should be fine with the ag zoning, I would think, unless they do the moratorium. Sounds like my county is going to come out with something by Oct. 1, which would be great for a little planning time, since you need an address in the application.

 

[deebickle]

So the word is that my county is going to allow a 502 grow in residential zoning. Like it's no different than growing tomatoes, which is allowed in residential zoning. That would be great if it happens, I'll post when I hear the official word.

On another note I called my insurance agent to ask about getting insurance as a producer/processor, he said there was only limited for dispensary at this point. The LCB rules currently call for insurance, including product liability. Don't know who would issue that, or if they did it would be at high prices, as to make it unavailable. Might make it impossible for the little guy.

 

[SunJ]

Check with Farmers Insurance.

 

[deebickle]

That's my agent, Farmers. He checked other sources too.

On another note, this grow idea sounds good only if prices stay someplace reasonable. But I'm thinking of acres and acres and large greenhouses on the east side and cheap labor .... Any reason why the price won't sink way down there? A big operation could produce tons of bud outdoors. So that would change the economics of producing under lights, legal or not. Only thing might be if the quality goes downhill, might still be demand for indoor.

look at this photo from 420 magazine article.

 

[SunJ]

That's no bueno! I was told back in June that they'd be able to help me. Now I have some calls to make...

 

[deebickle]

Let me know if you find out something different. In all fairness though, it may just be since there are no final rules in place yet. They would be unwilling to underwrite anything until they know the lay of the land. Once the rules are finalized they might offer something. I would doubt that anyone would offer product liability for marijuana though, so hopefully that requirement will get changed.

 

[Demurrer]

Business Plan is the 'bigger' document that includes more of the 'vision' stuff that investors and key suppliers look for. Operating Plan is the 'day to day' operations stuff and is usually a section within the Business Plan. Many people use the terms interchangeably unless there's a specific reason to use them more accurately. The WSLCB rules apply to stuff that usually goes in a Business Plan AND stuff that usually goes in the Operating Plan section of the Business Plan. So, I'm curious to see what the WSLCB's Operating Plan template looks like. The materials I'm preparing for the class can be used to prepare the full Business Plan. Once the WSLCB's Operating Plan template comes out (Oct 16th) I'll customize the materials to fit that template. So, from my workshop participants will have the 'Operating Plan' for the license application and the bigger 'Business Plan' for other uses.