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Prospective Kent marijuana business owners speak before City Council

The Kent City Council and two prospective Kent recreational marijuana business owners participated in a spirited debate in connection with the city's ban against such businesses.

Chris Kealy, of Tacoma, told the council at its Jan. 7 public hearing about the ban that he applied to the state Liquor Control Board for licenses to open a producer and processor facility at his property at 11024 S.E. 208th St., in the Panther Lake area of Kent. He submitted the license under the name of Spinning Heads, Inc.

"As a producer-processor we would not be in view of your citizens," said Kealy, who also appeared in front of the council in November when it voted 4-3 to approve a six-month moratorium to keep marijuana businesses out of Kent. "We would just be employers of your citizens. How we intend to operate and go forward is to be inside the state processes that allow for legalization of this product."

Voters statewide in 2012 approved Initiative 502 to allow recreational marijuana sales, producing and processing. The liquor board will issue licenses later this year for retailers, producers and processors.

Kealy emphasized he's not interested in the retail sale of marijuana that's expected to be much more noticeable to the public when outlet stores open. The liquor board has set a limit of three retail stores in Kent.

"Mr. Kealy, I understand you are not open for retail for your product," Councilman Les Thomas said. "However, you're producing it, you're processing it, it's got to go somewhere to be distributed."

Councilman Dennis Higgins asked Kealy about how much of an investment he plans to make in Kent with his marijuana business.

"I have a building already under construction so I'm spending $8 million either way," Kealy said. "I'm going to spend another $12 million in Kent and employ 102 people and continue operations at an annual budget of over $10 million."

Higgins then asked Kealy what the facility would look like to someone passing by on the street.

"It will look just like a mini-storage with no vacancy," said Kealy, who added there would be no odor and no signage. "It will have eight trucks a day going in and out."

As far as the economic impact, Kealy said the state keeps most of the money.

"Unfortunately, the city is not getting a good cut on this deal and I think it's less than $100,000 a year at this point," said Kealy, who added he would like to see that changed at the state level so cities receive a portion of the recreational marijuana sales taxes.

Kent Acting City Attorney Pat Fitzpatrick said the city has analyzed the marijuana tax issue.

"We do not get any of the sales tax through the three-tier tax system of manufacturing, producing and sale," Fitzpatrick said. "We do get some B&O (business and occupation) tax."

Kent resident Steve Manzaneres testified at the hearing that he has applied for a producer and processor license under the name of Organic-Cannabis-Coalition. He was surprised to hear from Fitzpatrick that the state plans to keep all of the marijuana sales tax revenue.

"The state gets it all?" Manzaneres said. "Well, you better change it."

Seattle attorney Christine Masse, who represents Kealy in his efforts to open a marijuana business, told the council it should take a leadership role in regulating marijuana businesses rather than a ban.

"I think this is a place where you really could be a leader on this topic," Masse said. "You could look at the issues, the problems, the security and what makes sense for this community. You could take fate into your own hands rather than let the (state) attorney general come back with an opinion next month that dictates to the community one way or another what needs to be done here."

Masse said she and Kealy would work with the city in Olympia to help cities get a portion of the marijuana sales tax revenue.

"I do believe that like liquor that sends money down to local governments it wouldn't be that difficult of a change to get some of that tax revenue to be pushed down to local governments," Masse said.

Higgins, who voted in November against the city's ban against marijuana businesses, told his fellow members he wished it would take steps to regulate marijuana businesses.

"I appreciate your offer of how we might be proactive rather than reactive on this," Higgins said to Masse. "Whether we do it this year or five years from now we are going to have to deal with this in a regulatory fashion and I personally feel we should do it sooner rather than later."

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