Michael Keysor and the NW Cannabis Club

By Mat Lee

Out of the four legal recreational cannabis states, Alaska is the only one that explicitly allows private cannabis clubs to exist. For some unfortunate reason, Washington doesn’t allow this sort of business model to exist, and Oregon’s Indoor Clean Air Act closed the door there, although at least two clubs are operating, in what some consider a grey area. Plus things are constantly changing, at least in Oregon.

Colorado seems to allow such clubs in certain towns, but according to an article in The Cannabist online titled “Public tokin’ is stokin,” they experience busts from time to time. Denver and Colorado Springs were the two places cited in the article as having somewhat underground clubs that the police like to hit up every now and again.

Pot Luck Events in Anchorage, Alaska, operates on a private membership basis. The Pot Luck Events membership signup page states, “As of February 24th, 2015, it is legal for people in Alaska to use marijuana for medical and for recreational use. It is illegal to use marijuana in public, but as a Pot Luck Events Club member you can enter the clubhouse and consume and share your own cannabis products in safe private clubhouse that caters to members of our social club.”

Pot Luck Events offers a daily membership for just $5.00. If you are going to be in town for a day or two, this is definitely the plan for you. The catch is, you must live outside of Anchorage to get this rate. They offer different discounts depending on whether you are a veteran or a medical card holder, and have monthly to yearly memberships for locals. Like any good club, they hold events there, and allow members to rent the space to hold their own 420-friendly events.

At the Northwest Cannabis Club (NWCC) in Portland, Oregon, a lifetime Crow Card membership is $20.00. Then you just present the card and pay $5.00 to get in. They also have special events and rent club space for private parties. (There is a great list of events coming up on the events page at nwcannabismarket.com.) This is a club in Oregon where you might occasionally run into Mat Lee or Michael Schroeder, aka the Aging Ent, dishing up dabs or relaxing on the corner couch.

In the beginning of October, the NWCC celebrated its first anniversary. The CBJ sat down and had a chat with Michael Keysor, CEO and Founder of NW Cannabis Market and NW Cannabis Club.

Before this, Michael Keysor ran farmers-style markets in Seattle under the NW Cannabis Market name. In the five-plus years that Keysor ran these markets, he says he saw roughly two and a half million patient visits. But not everything was all sunshine and happy endings. When medical ended, it also took with it a lot of patient-driven business. When it rains it pours, especially in Seattle, and, as Keysor puts it, the state of Washington ran over 1400 dispensaries out of business. A sad day for the NW Cannabis Market.

Michael Keysor says, “The problem is symptomatic. The government wants to regulate every aspect of this industry. The first thing it has to do is demonize the patients and shut down the medical marijuana dispensaries.”

With so much potential here for cannabis- and non cannabis-related businesses to support local communities and strengthen societal bonds at large in a positive and constructive manner, it’s heartbreaking when too many government regulations prevent prosperous business and industry.

Keysor says, “Government has a plan, and that plan is really simple. Steal the wealth of this industry—the heart and soul—and, like most things the government is involved with, all we’re left [with] is handful of promises.”

Part of the cool business model Keysor uses at the NWCC involves other cannabis businesses renting time/space to come and talk shop with potential and existing customers in a fun and relaxed setting, complete with entertainment, snacks and alcohol-free drinks. For example, in the week leading up to the one year anniversary of the club, the guys from THClear Oregon were there chatting with people and dishing out dabs. It’s a great way for the people who make the dabs, grow the flowers and sell the edibles to have a meet-and-greet with the people who buy their products and support their businesses. It’s really a lot of fun, and much like the VIP parties at conferences, it’s starting to become a hotspot for doing business.

It’s not the sort of business you are thinking of—as in selling dabs or cannabis to people. That’s what the shops are for. Absolutely none of that is tolerated at the club. Instead, it’s the sort of business that brings companies together to make a great product. Business meetings at the NWCC? Yes, please!

Keysor shared this analogy during the conversation at the club’s anniversary: Let’s say we’re starting up a new restaurant. It’s a brand new concept. Martian food. We apply to the liquor board for a liquor license and a food service license and we can have the license in 60 days—to serve Martian food. Something that has never been done before. But if you are a cannabis club, you can’t get anything but words from the bureaucracy. That’s because, Keysor says, they have a particular plan for cannabis, and that's to squeeze every bit of life out of it and whoever participates in it.

Keysor believes that “502ers” stole the industry from the medical cannabis pioneers who started it. He passionately and colorfully described how the recreational side couldn’t beat the medical side in the open market, so they beat them the only way they could: by exploiting the system and using licenses obtained through a lottery system.

This gets a little confusing. A person who applied for a recreational license in Washington before July 2014, was operating or employed by a collective before 2013, and had a business license—paying taxes and doing all the other normal things a business would do—would get special top priority when the Liquor Control Board (LCB) handed out these highly coveted pieces of paper. A lawsuit has been filed in Thurston County Superior Court regarding this very thing.

According to an article by Bob Young at the Seattle Times, the lawsuit claims that the Washington LCB is giving licenses to businesses that didn’t exist mere months ago. One of the activists in the lawsuit, John Davis, said in the article, “I am watching phantom entities gobble up scarce licenses that will put real people out of business.” 

Another complaint is that it’s unfair to require a zero tax balance, rather than a simple showing that one has a history of paying all taxes in a prompt and timely manner. There is also a complaint about the LCB’s method for limiting the number of retail stores allowed.

This goes hand-in-hand with what Keysor is talking about. Keysor says, “Do you know there were five recreational people in Seattle that offered me $50,000—each one of them—to sign on their license, because my mark would hold such weight in the deciding process.” He goes on to explain how the state cut everyone out by allowing these so-called “Frankenstein” licenses.

He mentioned that the 227 dispensaries that were in Seattle at one time are now down to seven outlets where patients can get medicine, and 41 recreational outlets. “They gamed the … system that allowed it to roll right into their hands. They came out from underground into my markets first. They didn’t earn it. They stole the system and they stole it on the backs of the people who built that industry.”

Michael Keysor is no stranger to dealing with an overregulated industry, and has had his own fair share of run-ins with the city of Seattle. Keysor says, “The mayor came after me, and he sued me through the city attorney's office. He sued me on building code violations...” claiming that it was a changed use because of cannabis sales in the building. The city required new building plans, which required Keysor to hire an attorney and an architect and pay for a seismic survey on the building. (The city of Seattle was mandated federally to provide seismic surveys for buildings in Seattle, and didn’t fulfill their plan federally to do that.) “The city of Seattle took the opportunity to put that expense on guys like me,” according to Keysor.

Keysor said “I had to spend $8,000 for a survey on my building. They threatened me with fines of $500 a day for 19 months. My fines totaled $285,000.” This was, of course, settled for much less than what the fines totaled.