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STEVE ELLIOTT

Your source for uncut, uncensored, no holds barred, non-corporate controlled cannabis news

Want to become an instant marijuana mogul in Washington state? Here’s your chance. You just need $50 million, and you’ll own the state’s two biggest chains.

The #1 and #2 cannabis retail chains in the state on Monday announced they were up for sale as a package deal, Uncle Ike’s owner Ian Eisenberg confirmed to Toke Signals on Tuesday.

Ramsey Hamide, who owns Vancouver-based Main Street Marijuana, and Eisenberg, who owns Uncle Ike’s, have three storefronts apiece. They’re offering up the combined six shops for the $50 million price tag, reports John Schroyer at Marijuana Business Daily.

The period of uncertainty represented by the incoming Trump administration is certainly one major factor in the decision to sell. With virulently anti-cannabis Attorney General nominee Jeff Sessions as the top law enforcement officer in the land, all bets could be off.

But another factor, Eisenberg told Toke Signals  on Tuesday, is the likelihood of out-of-state investors being welcomed into the state’s retail cannabis industry.

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Ian Eisenberg inside the flagship location of Uncle Ike’s:
“The Republicans seem hell bent on allowing out of state ownership of cannabis businesses and crushing our fledgling cottage industry”
[Steve Ringman / The Seattle Times]

“With multiple bills in Olympia to open the I502 market up to out of state ownership the timing seems right,” Eisenberg told us. “The Republicans seem hell bent on allowing out of state ownership of cannabis business and crushing our fledgling cottage industry, the timing sort of feels right to put our feelers out.”

Main Street and Uncle Ike’s combined in 2016 to bring in total retail sales of more than $64.8 million, according to 502data.com, which uses data from state government. About $34.4 million of that comes from Main Street, and $30.4 million from Uncle Ike’s.

Their closest competitor, #3 New Vansterdam, based in Vancouver, Washington, had sales just over $20.6 million in 2016, according to the site.

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Hilary Bricken
[Canna Law Group]

Under current I-502 rules, anyone who invests any funds in a Washington state-licensed marijuana business is required to have been a resident of the state for at least six months, according to weed attorney Hilary Bricken at Above The Law. That means out-of-staters have only been able to participate in the state’s legal weed market by providing property to licensees (as landlords), by selling or leasing of equipment to licensees, or by providing consulting services.

Those who back the idea of opening up Washington’s marijuana market to out-of-state money say that such a move would make capital more readily available. Cannabis businesses, of course, need investment capital in order to grow and compete. Some other states with legal marijuana markets are more permissive in allowing out-of-state corporate investments, so we’re told Washington needed the same to “remain competitive.”

Under current I-502 rules, anyone who invests any funds in a Washington state-licensed marijuana business is required to have been a resident of the state for at least six months, according to weed attorney Hilary Bricken at Above The Law. That means out-of-staters have only been able to participate in the state’s legal weed market by providing property to licensees (as landlords), by selling or leasing of equipment to licensees, or by providing consulting services.

What this could mean, though, according to those of a more cynical bent, is that what little hope mom-and-pop entrepreneurs currently have to establish a viable marijuana business could be all but extinguished by opening the floodgates to big corporate money from out of state.

Even those in favor of opening investment to out-of-staters have acknowledged the need for restrictions to ensure that big corporations with big money aren’t allowed to dominate the state’s cannabis market.

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