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To:

Seattle City Council Members & Mayor Murray

From:

Concerned 1-502 Business Owners

Date:

9 December 2014

Subject: Unregulated Medical Marijuana Markets.


Greetings,
We write this letter as licensed I-502 facilities on behalf of many of our
industry's interested parties. Our concern is the unregulated medical
marijuana market.
As we all file and pay state and local taxes, pay living wages, allow employees
to accrue sick time, abide by building code and 'regulations, adhere to strict
investor, testing, labeling and packaging guidelines, we are competing with
the grey market of growers and dispensaries who run all cash, regulation- and
tax-free businesses. This uneven playing field is creating highly profitable
untaxed businesses and individuals and threatens to cause the legal
marketplace to fail.
There are currently a couple of bills in the state legislature that will curb or
end the so call.ed "medical" marijuana business as we know it, bringing it
under the full fold of 502 rules, including licensing, zoning, buffers,
employment, actual medical verification, security and so on. The end result
would be a safe medical marijuana system for patients and recreational users
that generates hundreds of millions in tax revenues.
We have seen the City of Seattle's plan to regulate the medical market rather
than end it. This approach conce,rns us as it runs the risk of further
legitimizing the grey market and making it impossible for the state to create a

well regulated, tax generating industry as asked for by voters.


Patients should be a priority, and we believe they can get more rigorously
tested, measured, controlled and safe medicine at 502 retailers than at grey
market dispensaries. Ingesting high levels of THC, mold, Butane, Benzene,
Miracle Grow and other pest

and~insectiddes-an~-dange-roos,andsim:e ------

dispensaries don't have to comply with any testing or labeling regulations,


buying dispensary marijuana, edibles and concentrates can be dangerous.
The quasi-legitimate status of the "medical" market allows both retailers and
grow operations to spread unabated in our neighborhoods. This harms small

business in small business districts that must compete with untaxed,


unregulated businesses driving up commercial rents and driving away
customers. It harms the legal 502 business, and ultimately the true unintended
victims are the real patients who are buying faulty products that are
sanctioned
and protected by local governments.
..

List of Issues:

Below is a list of issues that we have included for your reference; these are

very important issues that need attention. We encourage you to consider


these as you make a policy for Seattle, and to additionally look at what other
nearby municipalities like Pierce County and Tacoma are doing, and ultimately
ask you to support a legal, safe, tax generating, well regulated marijuana
market by closing the grey market medical business as soon as _possible.

- "Medical" growers are not paying excise taxes on their illegal sales to
dispensaries, which robs the state of tax revenues that 502 growers are
paying.

------------~-----

- Only a small percentage of "medical" buyers are buying for legitimate


medical conditions. The other buyers are just wanting illegal, untaxed,
unregulated cheap weed. Understandable, but a legal, well regulated
marijuana industry will fail in this climate.
-The marijuana that "medical" is selling is not truly medicinal quality. It has no
testing or packaging requirements and is often intentionally mislabeled, has
toxic chemicals like mold, fungus and pesticides, and the THC levels are
usually mislabeled. Here's a great article from San Francisco on recent testing
of so called "medical" marijuana and how bad it is b~!f?.jf_!J.~y~_c1.:~9..'!]Ll~.e_~'I!.m and

at http:J/seattletimes.com/html/localnews/2023759490 pottestingxml.html
- Medical cards are being sold like candy. We need better standards for
issuing medical cards, and real fines for health care providers who give them

'

out without a real medical need .


.

- 502 growers are producing the low THC, high CBD marijuana requested by
patients. It's tested, clean and high quality.
- ~here is no medical justification for the high THC products like BHO and
Shatter. These are the crack of the marijuana business. At the very least there
should be limits on levels of THC dispensaries can sell. 15% THC, verified by
testing, should be the extreme upper limit.

-Every batch of 502 marijuana is tested for THC and CBD levels which are
then clearly and accurately printed on the package. It is also tested for mold,
fungus, and moisture so it won't mold on the shelf. It is also tested for
pesticides. 502 marijuana is consjstent, well regulated and safe.

-At 502 regulated businesses, edibles processing involves clean, commercial

kitchens, testing criteria and health standards. This does not exist under the
"medical" model, which can sell food items not produced in sanitary,
regulated conditions. These dispensaries are the only sellers of unregulated
consumer edible items in the state.

"'502 businesses-paystate exCiseandsalestaxes ats-different levets; on


growers, processors, and retailers. In addition they pay B&O tax, permits and
license fees. "Medical" businesses, while highly profitable and selling mostly to
recreational users, pay none of these.
-True patients in need of medical marijuana should not have to pay sales tax,
and it would be easy to allow that if a patient has a well-regulated medical
card .
.. -"Medical" growers and dispensaries are making huge profits but aren't legally
employing people. They aren't paying minimum wages, providing any benefits
like sick days, or paid_ time off, overtime, health insurance, worker's camp, or
payroll taxes, and don't have labor standards, health and safety standards.
-

"Medical" growers don't meet zoning rules, building standards,


community planning, ADA standards, etc.

-City planning involves deciding where you want what businesses, such as
Mixed Use or Warehouse Residential, etc., but "medical" businesses aren't part
of the conversation. Grow houses are operating in the middle of
neighborhoods in people's garages and basements, retailers are opening next
to each other in developing business districts, and delivery services are
operating out of people's homes and apartments.

-Because the "medical" business isn't licensed and can't bank like 502
businesses can, we are seeing home invasions, dispensary robberies, hold ups

and literally gunshots in the street. This is the sort of crime that results from
unregulated cash businesses. Legalization was done in part to keep this from
happening, and will.
-Further, the "medical" side of the pot business is illegally selling to anyone
and everyone, including minors, people without medical cards, and people
without true medical needs. "Medical" cards are handed out without
regulation. The Seattle Times just did a sting and was able to buy pot
unchecked 66% of the time.
-Many dispensaries are charging sales tax and not paying it to the state,
which is dishonest and illegal, robbing both their customers and local
governments.
-Almost all dispensaries are buying marijuana, which violates the state
medical law that only allows medical patients to donate to dispensaries from
collective gardens.
-There are no standards about who can invest in a medical operation,
allowing organized crime to be involved, unlike 502's rigorous and thorough
background check system.

Please consider these points when deciding to legitimize a very bad business
model or putting your efforts into ensuring that 1-502 is implemented to the
fullest extent. The argument that patients are taking away legitimate
medicine is false, but providing a safe, tested product for those truly in need
.
.
of medicine, while providing a well regulated, tax generating, community
enhancing recreational marketplace, is your responsibility.

Sincerely,

Davrd-~ Meinart~::owner~s Pciit1t, ComeF&~forch~-Nwa~-5o2 Business).

Ian Eisenberg- owner Uncle Ike's Pot Shop


Christ & Scott Massi - owner Tumbleweed Farm
Dan Devlin, Patrick Devlin, Michael Devlin, DB3 Inc. DBA Zoots
Jody Hall- owner CuP.cake Royqle & The Goodship Co. (I 502 Business)

..