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Marijuana company says it is close to purchase of K2 building
The K2 building could one day be home to a large operation for producing edible marijuana products, should a company close to purchasing the property complete the deal and clear several regulatory hurdles.
Bakkhos Holding, a legal marijuana company, has placed an offer on the K2 building, and the offer has been accepted, according to Dan Anglin, a spokesman for the company.
Anglin said last week that Bakkhos Holding — a company with Seattle-area investors who have been involved in the medical marijuana industry — is now under contract to purchase the building from K2, which is owned by the Jarden Corporation, but the purchase has not yet been completed.
Bakkhos is currently performing inspections at the property, and Anglin was unsure when the sale might close.
“Our offer is very strong, and our contract is strong,” Anglin said.
Representatives from Cushman & Wakefield, the commercial real estate broker selling the building, did not return phone calls from The Beachcomber, and a representative from K2 could not be reached to comment either.
Last month Bakkhos Holding applied with the state Liquor Control Board to both grow and process marijuana at the 180,000-square-foot K2 building, putting in for a Tier 3 production license, meaning the indoor growing operation would be 10,0000 to 30,000 square feet.
At least two other applications have also been submitted for marijuana licenses at the K2 location.
Should the sale go through and should Bakkhos be granted state licenses as well as King County permits, the company would grow marijuana and manufacture Edipure-brand edible marijuana products at the building, said Anglin, who is also a spokesman for Edipure. The products would be sold to off-island distributors of recreational marijuana.
Anglin said that Bakkhos Holding, which has worked with an attorney from the Seattle-based Canna Law Group, has done thorough research and is confident about closing the deal and locating its operation at K2. He said the company expects it could begin operations as soon as June.
“We’re very excited about the opportunity the property presents. … It’s a great piece of property in a great community,” he said.
King County officials, however, say such a marijuana business is not currently allowed at the K2 building and Bakkhos Holding could have a long road ahead of it before it can begin operations there.
According to officials with King County’s Department of Permitting and Environmental Review (DPER), locating a marijuana growing and processing business at the K2 building would require an amendment to King County’s comprehensive plan.
Ty Peterson, a commercial product line manager at DPER who has been handling marijuana business zoning inquiries, said that although the K2 building is zoned as community business and marijuana growth and production will be allowed in that type of zone in King County, the building is also part of a special district that Vashon’s Town Plan Committee created in 1996. That special district, which was folded into the King County Comprehensive Plan and provides the basis for a code provision at the K2 property, has several permitted uses, but marijuana growing and processing are not included.
Allowing those uses would require amending the county’s comprehensive plan, Peterson said, something that would be considered and voted on by the King County Council. The process would likely take at least a year, he said, and would include public comment opportunities and at least one public hearing.
“It’s a contentious enough issue that you wouldn’t just amend the town plan for this purpose without an extensive process,” Peterson said.
Should an applicant choose to challenge DPER’s zoning interpretation for the K2 property, Peterson said, officials higher up in King County could be called on to issue a decision.
What’s more, Peterson said, the department will likely alert the state Liquor Control Board that marijuana business is not currently allowed at that location.
DPER will eventually review all marijuana licenses submitted for King County locations and, based on county zoning regulations, will make recommendations for each one. The state is not obligated to follow the county’s recommendations, and will take other factors into consideration, Peterson said, but DPER’s recommendation will carry some weight.
“We definitely would recommend no on this site,” he said of the K2 property.
Jim Chan, DPER’s director of permitting, concurred. He said county officials have fielded multiple inquiries about the K2 property and recently shared their interpretation with a group interested in purchasing it.
“We were very clear with them that you cannot do this use at this time and need a comprehensive plan change in order to do that,” he said.
Anglin, with Bakkhos Holding, said he was unable to comment on the county zoning issue, but said the company has been in contact with county officials and is confident about moving forward with its plan. While it would have preferred that the building’s purchase be contingent on Bakkhos getting its state licenses, that option was not available, he said.
“We would have liked to have made that offer, but it was not on the table,” he said.
The owners of Bakkhos Holding have been involved in the medical marijuana market since 2012, distributing Edipure products through the nonprofit Green Cross Washington.
Information available on the Secretary of State’s website on Bakkhos Holding lists three men with Bainbridge and Mercer Island addresses as the company’s governing persons.
Anglin, however, declined to give details on the company or its owners, saying they would be more forthcoming once they have secured the property. He also declined to say how much they offered for the building.
“We’re not prepared to engage with the community in the way we want to until we own the building,” Anglin said.
Green Cross Washington currently makes several types of Edipure-brand, marijuana-infused soft candies, as well as some baked goods and savory items such as crackers and nuts, at a Seattle-area kitchen. It also makes cartridges for marijuana vapor pens, which are similar to electronic cigarettes.
According to its website, Edipure products are currently available at six medical marijuana dispensaries in West Seattle as well as a handful of stores outside the Seattle area. Edipure products are also made and widely distributed in Colorado.
Should Bakkhos secure the K2 building for its new production facility, Anglin said, it will likely close Green Cross Washington and focus on making Edipure products for the new recreational market in Washington.
The K2 building, which sits on 18 acres a mile south of Vashon town, has been empty for about a decade, since K2 Sports moved its operations off the island. It was rezoned from industrial to commercial in 2010. That same year, K2 began to actively market the property, originally listing it at $3 million. In recent years, it has reportedly been offered at $1.5 million. Efforts by some islanders to purchase the property and transform it into a multi-use site that would benefit the community have failed to gain traction.
Anglin said that officials with Bakkhos Holding have visited Vashon several times to see the building and are excited about the prospect of locating their new business on the island. They chose the K2 location in part, he said, because the large building suits their needs, they like the Vashon community and they believe many islanders will be welcoming to marijuana businesses.
“We’re really enjoying meeting folks in the community, eating at the restaurants. It’s the right vibe for us,” he said.
Should the real estate deal close, Anglin said, the company plans to be in close communication with the community, explaining their plans, addressing concerns and providing information on future employment opportunities for locals.
“We’re confident this building meets our needs, is zoned appropriately, and now our focus is ... on the community,” he said. “We plan to be transparent and provide as much information as we can.”