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Pot company is out, ends contract to purchase K2
By NATALIE MARTIN
The marijuana company hoping to purchase the K2 building has terminated its contract to do so, said Dan Anglin, a spokesman for the company, and it will look outside King County to set up its factory for edible marijuana products.
Anglin said the company, Bakkhos Holding, is pulling out of its plan on Vashon because of county land use processes that make it difficult and time-consuming to establish such a business on the island.
“Unfortunately, this just comes down to a simple business decision that equates to are we going to lose money for a year or are we going to start our business,” he said.
Anglin said there was too much time and uncertainty involved in rezoning the K2 building and obtaining a conditional use permit (CUP) required by the county of all new marijuana businesses of that size. Bakkhos, a company with ties to the Colorado marijuana industry, recently asked the county to pass legislation that would allow it to avoid the CUP, he said. When that wasn’t proposed at last week’s meeting of the county council’s Transportation Economy and Environment (TrEE) Committee, Anglin said Bakkhos decided it was time to look elsewhere.
Lorelei Borland, a vice president of Jarden Corp., K2’s parent company, confirmed last week that Bakkhos’ contract to purchase the 180,000-square-foot building had been terminated.
Anglin, who is also a managing partner with EdiPure — the Colorado-based company and brand of product Bakkhos would make — announced a couple weeks ago that Bakkhos may look elsewhere to set up its operation. The King County Council had not yet passed through committee the Vashon Town Plan amendment that would allow their business at K2, he said. What’s more the CUP process could take about a year since the permit surely be appealed by someone from Vashon, and he recently found out it couldn’t be expedited as he once thought. At the time, county officials confirmed that the process could be lengthy but said they hadn’t recently changed their message about it.
Some islanders who have supported Bakkhos’ plans quickly petitioned the county council to fast track the town plan amendment, writing to county councilmembers and holding a short demonstration outside K2.
∂At a TrEE Committee meeting on April 1, several Vashon residents spoke both for and against the town plan amendment. And although King County Councilmember Joe McDermott previously indicated the committee would take two to three meetings to consider it, after a short discussion, the committee voted 5-0 to pass the amendment on to the full council with a recommendation to approve it.
“There was comfort from the committee to go ahead and advance it,” said McDermott, who has long supported the amendment. “Questions and concerns were addressed by the first hearing.”
Anglin said that while the county did move the amendment quickly, as some islanders asked, it didn’t help Bakkhos much in the end, as the company still faced a CUP and rezone. The rezone of the K2 property from Community Business to Industrial was an unclear process that could also take up to a year, he said.
“It’s just too complicated,” Anglin said of the situation. “We have competitors that are licensed and already growing, and we can’t afford to sit idly by and just wait.”
Shango Los, an islander who founded the Vashon Island Marijuana Entrepreneurs Alliance and has campaigned in favor of Bakkhos, posted a blog about last week’s meeting titled “No One Wins.” Los, who commented at the meeting, said he thought neither Bakkhos supporters nor those who opposed the town plan change got what they wanted that day.
“It was definitely a disappointment,” he said of Bakkhos’ decision to end its K2 contract.
McDermott said that Anglin did ask that the county lift the CUP requirement for buildings zoned Industrial, but McDermott never considered proposing that to the committee and believed the idea wouldn’t have support on the council either. He defended the CUP requirement, saying it makes sense to have more a stringent permitting process for the largest marijuana start-ups, even if it discourages some new businesses.
“Any time we lose an opportunity for economic development in the county, and in this case a viable option for K2, I can be disappointed,” he said. “But the regulations that the county has in place on the whole I don’t think are unreasonable for a new industry that we are learning.”
Also passed along as part of the Vashon Town Plan amendment was wording that would allow the Seattle Distilling Company to remain at Center, as well as a clause that any properties within the boundaries of the town plan that are listed as contaminated by the state Department of Ecology (DOE) must obtain a No Further Action (NFA) letter from the state before a CUP is granted for the site.
McDermott said that portion was included in the amendment in response to concern from islanders about contamination at the K2 site and a widely-signed petition from the Backbone Campaign. The DOE has said that to obtain an NFA letter for the K2 property, its owner would have to enter the Voluntary Cleanup Program and work with the state to determine what action is required at the site. Neither K2 nor Jarden have entered the program.
Anglin didn’t mention the NFA letter as an obstacle to Bakkhos, but did say the company is now looking to set up its operation outside King County, in a “municipality that does not have additional layers of restriction,” he said.
As Bakkhos begins a new search, it appears that the company has also experienced some internal issues. Two of its three original investors — including one who was the founder of EdiPure — are no longer with the company. And it apparently has struggled to submit documents in a timely fashion to the state Liquor Control Board (LCB), which is considering its marijuana business license application.
According to a March 7 letter to Bakkhos Holding from a marijuana licensing investigator at the LCB, the company hadn’t submitted any documents requested by the state in January as part of its application process. The documents were due in February.
Anglin has since said that the letter was a mistake. However, a public records request by The Beachcomber that was fulfilled by the LCB on Friday contained none of the requested documents and no record that they had been submitted.
What’s more, Bakkhos’ marijuana license application is now on hold because it backed out of the K2 property. According to an LCB document, a new policy at the agency requires that applicants who make significant changes during the licensing process have their applications put on hold due to time limitations at the agency. Bakkhos’ application is now on hold for six months.
Bakkhos, which is listed on the Secretary of State website as including one original investor as well as one new one, is now looking at properties in Mason County, according to Anglin. Mason County is located on the Kitsap and Olympic peninsulas. Anglin called the county “the perfect environment for marijuana operations,” but said the company would have preferred Vashon.
“We’re disappointed we’re not locating our operation on Vashon Island,” he said. “We not only invested financially, we invested emotionally and liked Vashon.”
On the island, an ongoing community debate over Bakkhos’ proposed operation and the town plan amendment that would allow it has inspired some to call for an update to the Vashon Town Plan. The section of the Vashon Town Plan that creates zoning regulations dates back to 1996.
The Vashon-Maury Island Community Council recently held a planning meeting to discuss the town plan that was attended by about 20 people.
VMICC president Tim Johnson said the council is early in the process and hasn’t been in communication with the county yet, but it is hopeful it will eventually update the plan.
The council would like to get county officials, planning experts and representatives of various groups involved, Johnson said, and plans to hold another planning meeting next month. He also suggested the council could use technology to get even wider input than it had the last time the plan was updated.
“Our goal is to see what the island wants and to create a town plan overlay or island plan that is developed in cooperation with a lot more people,” he said.
Editor's note: An earlier version of this article stated that K2 Corp could obtain a No Further Action letter for its site by addressing oil contamination there and not performing site-wide testing or clean-up. Donna Musa of the Department of Ecology (DOE) said that could not be determined until the company enters DOE’s Voluntary Cleanup Program. The company has not enrolled in the program.