Spokane-area business owners see potential in pot

Among more than 500 applications by people wanting to grow, process or sell legal pot in Spokane are those submitted by a former Republican state senator and a high-profile developer of homes and apartments.

One of the largest proposals is an indoor grow operation proposed for the former Costco store on East Third Avenue. The venture would be led by Clarence “Cip” Paulsen III and his business associate, former state legislator Brian Murray.

Paulsen, whose great-grandfather built the Paulsen Building in downtown Spokane, owns the large former Costco building.

Another recognizable name on the application list is developer Lanzce Douglass. Son of developer and property owner Harlan Douglass, Lanzce Douglass has applied for two permits – to grow and to process pot.

Reached by phone, Lanzce Douglass said he had no comment on his plans for that business.

Murray, who served in the state Senate from Spokane’s 6th Legislative District from 2003 to 2004, said he doesn’t use marijuana. “But I was presented with an interesting business opportunity,” he said, noting he also has partial ownership in Spokane-based winery Vintage Hill Cellars.

He also provides consulting services for political candidates. It was in that role he first met Paulsen, who runs Sticker Shock Signs.

Both men said they saw a strong business upside in legal pot, which Washington voters approved in November 2012.

“A lot of money will be made in this new industry,” Murray said. “And we plan to run this as a very professional business.”

Murray also said the state’s plan to carefully regulate growing and distribution makes more sense than relying on law enforcement to deal with individuals buying and using small amounts of pot.

In their application, Paulsen and Murray call their company GrowState, a name they chose to emphasize their focus on a carefully managed business, Murray said.

The two men also submitted applications for three pot processing operations inside the Costco building. The state’s regulations allow for multiple permits for growing and processing under one roof, but the businesses must be kept physically separate from each other.

The former Costco store, with 130,000 square feet, would be ideal for managing multiple operations and keeping them all secured and monitored by video cameras, said Murray.

Murray said he’s not sure what form of processing GrowState might do. “We would consider baked goods as one option,” he said.

Before becoming Costco’s first Spokane-area store, the building on East Third had been Buchanan Chevrolet’s showroom and service center. The Paulsen family bought it in 1973 and added 20,000 square feet to help Costco move into the building.

Costco vacated the building in 2001, moving into two smaller area stores. Paulsen has tried to sell the building without success since then.

Paulsen currently stores boats, RVs and autos in the building. If the state approves the applications, Paulsen and Murray won’t be allowed to operate any other business inside the building, Murray said.

Murray said it’s not certain the state will approve three licenses for growing pot. And it’s not certain they’d approve their requested amount of space for growing – 90,000 square feet for controlled plants.

“If they only approved 1,000 square feet, it wouldn’t make any sense to use this building for that,” Murray said, standing outside the former Costco store.

Both Paulsen and Murray have talked to potential investors who might want to join their business if the state approves their application.

They’ve also been in contact with people who have been involved in growing marijuana for the medical-pot industry. “We’d be looking for master growers, because we would have to find honest, hard-working people who will help us make this succeed,” Murray said.

Murray added he hasn’t discussed the business idea with friends in politics. “I don’t think they even know I’m doing this,” he said.