The penalty for hiding owners in a Washington legal-pot business is loss of license. But that punishment has rarely been the result of 36 violations the state has alleged. The case of a Seattle store, Vela, suggests why.
Vela, a uniquely designed Seattle pot store, opened last year with fanfare and sophistication.
Snoop Dogg dropped in on Vela’s opening weekend for a fundraiser benefiting the University of Washington Cannabis Law and Policy Project. The store then hosted a speaker series featuring top city and state regulators of the legal pot industry.
All the while Vela, a few blocks south of Safeco Field, was facing closure for allegedly violating state rules by hiding owners in the business.
The rules say if you do that, you lose your license. The sanction is severe because hiding owners is a way for unsavory characters or illicit funds to infiltrate Washington’s tightly regulated industry, which includes FBI background checks on all owners.
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It’s also a way to skirt the state’s limit on three retail licenses per person (soon increasing to five) and rules preventing store owners from also being growers.
Investigators at the state Liquor and Cannabis Board (LCB) have issued 36 hidden-ownership violations since legal sales began in 2014. But only three have led to canceled licenses. Sixteen cases are unresolved.
The lack of revocations isn’t because the LCB is overreaching or caving to offenders who appeal, said Justin Nordhorn, the LCB’s enforcement chief. Investigators haven’t found cartels lurking in our pot industry, Nordhorn said. In many violations, businesses appeared to hide sources of funding more out of negligence or financial desperation than for more sinister reasons, according to a review of investigation and settlement records by The Seattle Times.
Five cases have been resolved with fines and 12 with written warnings. “If you look at…