2018/05/09 Council Agenda Packet

Over time, our expectation is that the forces of economic competition will result in some of the stores moving elsewhere within Snohomish County,provided that the county will permit them to move elsewhere. Why Renton has Fewer Stores than the LCB Allotted In mid-November 2015 the Renton City Council President, Ed Prince, called his friend Philip Dawdy, a cannabis industry lobbyist,to share his concerns that the LCB was not providing clear direction to local jurisdictions on how many new stores they might end up with, following the original lottery round of stores from 2014. Renton already had three stores and the LCB was, at the time, expressed that it would add an unlimited number of stores. Prince said Renton wanted to place a reasonable limit on new stores, and asked Dawdy what mechanism it could use to do that. Dawdy suggested limiting the number of City of Renton business licenses that the City would issue to retail licensees. Prince asked him what was a reasonable number, and Dawdy guessed that two new stores (for a total of five)made sense. The next day, Renton City Council passed an ordinance capping the number of local business licenses at five. This came one full month before the LCB issued its jurisdiction-by-jurisdiction allocations, which allotted six stores for Renton. To this day, Renton only has five stores. Revenue Potential for the City of Everett During the council briefing on May 2, a question was proposed in regards to what a potential revenue means for the city, if additional shops were introduced. The specific comment was related to the general assumption that adding more shops would bring in more tax revenue versus what the actual expectation should be. New stores will diversify the retail product mix in the area thus increasing quality and value of the products to consumers. Each shop has the potential to carry different strains of cannabis which will increase the interest from users in other jurisdictions that currently drive outside of the area of the existing five shops to secure their cannabis. Expanding the current number of shops will also add a compliment to the existing shops by providing for a more competitive pricing situation and has the potential to bring roughly 60 more jobs to the community. A more competitive pricing model is likely to bring in outside interest and customers as well. There are currently jurisdictions operating with multiple (more than five) shops in close proximity to each other and each of these stores regularly report significant sales numbers. For example, there are three store locations with less than a half mile in between each location which each average more than $170,563 dollars based on February 2018 retail sales. Based on this revenue example if each of the 5 stores were to be added in Everett based on DOR rates, approximately $5400 per month per store in revenue from Local City/County Sales and Use Tax could be generated for the City. While these calculations are approximated assumptions,they paint a picture for significant revenue potential in a city that has a current budget crisis. A Focus on Opioids The opioid overdose epidemic has become a major public health concern in recent times. In 2016 alone, the number of opioid-related deaths surpassed the number of deaths from breast cancer. (CNN, Getting off Opioids with Medical Marijuana: Patients turn to pot Over Pills, 2018). As research continues to explore alternatives to opioid prescriptions, experts have looked to states with legalized marijuana as leading examples in the movement toward medical cannabis use for treating chronic pain. Researchers are proposing that this switch could help counteract the growing epidemic and potentially save up to 10,000 lives every year, according to data obtained in a recent five year study reported on by