This new Eastern WA cannabis shop is Black-owned. Here’s why it matters

Pasco is now home to four legal pot shops.

The newest is Lucky Leaf Co. and is licensed under a unique Washington program bringing diversity and equity to an industry that racked up $1.2 billion in sales last year.

David "Slim" Penn Jr. opened Pasco's second Lucky Leaf store this week. He is partners with Lucky Leaf owner David Morgan, who operates stores in both Spokane and Pasco with his wife, Shilo.

Penn, who is Black, is 51% owner of the downtown location. The store is one of five so-called "social equity" stores licensed by the Washington State Liquor and Cannabis Board.

The category was created in 2020 to award licenses to people who have been shut out of the industry because they lack income or have been affected by poverty or because their families were affected by the war on drugs, which led to a disproportionate number of minorities being convicted of cannabis-related crimes.

Penn is running his new venture with his longtime partner Jamie Badden, who serves as the store's general manager. The couple have 17 employees, many recruited from the neighborhoods around the store at 528 W. Clark St., near Moon Security.

Penn is thrilled to be part of downtown and to secure a future for his family.

"It's about getting minorities into this cannabis world and building generational wealth," he said.

Pasco roots

Penn and Morgan are longtime friends with roots in east Pasco. Penn supported Morgan when he pushed the Pasco City Council to reverse its ban on legal cannabis sales to adults in 2022.

The council removed the ban in 2023, leading to three stores opening by this spring, all operating under standard licenses. Pasco is home to a Lucky Leaf on Road 68, Green2Go on Road 90 and Pacific Outpost on Court Street.

Penn said he's ready to be part of the downtown revival by employing local contractors for his business and being a good neighbor. He intends to channel store profits into a youth-focused nonprofit.

Penn and Badden initially planned to open their shop on East A Street, near the Amazon warehouse complex.

It was one of the few spots that met the state's strict rules about keeping cannabis retailers away from schools and other other sensitive spots.

They were deep into planning when the A Street landlords realized they couldn't lease to a cannabis business because their loan was guaranteed by the federal government via the U.S. Small Business Administration. Cannabis remains illegal under U.S. law.

The couple turned to their backup location, a former bank spot near Moon Security. The property owner was agreeable and they leased the 2500-square-foot space.

They gutted the interior and rebuilt, investing about $30,000 in the new interior, including a secured back area where inventory is managed.

Penn said he is channeling his mother in his new business, vowing to bring excellence even when no one is looking.

"Being excellent to my mom is cleaning the bathroom and cleaning behind the toilet," he said.

He built his first business as a child, offering to mow a neighbor's law. The neighbor made a deal: Penn would mow his yard every Friday, then could use the mower over the weekend as long as he provided his own gas. He was a paper boy as well, working a Tri-City Herald route, including collecting fees from subscribers.

"I remember those 20 pound papers," he said, only slightly exaggerating the heft of Sunday papers laden with inserts.

He attended Pasco High, then joined the army, serving as a heavy equipment mechanic. The military helped him mature, he said, calling the memory a blessing.

Community building

The social equity program created an opportunity for him to own his own business. He wants the store to give its workers the same opportunity to develop their own careers.

"I want my people to use my store as a trampoline," he said.

Lucky Leaf held its soft opening the weekend after Halloween as customers arrived at its door. It isn't fully stocked, but it is catering to those it can and sending others to its fully open rivals.

Once fully open, Lucky Leaf in downtown will be open the maximum hours allowed under law: 8 a.m. to midnight, seven days a week. "Eight days, if we could," he joked.

Washington voters legalized recreational cannabis use for adults in 2012, but the impact is blunted locally because of a series of local bans like the one Pasco implemented. Franklin County and the cities of Kennewick, Pasco, Richland and West Richland all banned cannabis stores from opening in their jurisdictions.

The bans on retail sales do not make it illegal under state law for adults to possess or use cannabis.

Benton County followed suit, but only after several stores opened in unincorporated areas, including Green2Go in Finley and Nirvana Cannabis Co. next to West Richland. Its ban did not apply to the already-open stores.

Ongoing battle

Pasco is the only city to allow legal cannabis stores.

Efforts to allow stores in Richland and West Richland have failed. In August, West Richland voters overwhelmingly advised the city council to hold firm on its cannabis ban , with 56% of nearly 4,000 ballots cast saying they oppose marijuana sales in the city.

As of this spring Washington had issued 473 cannabis retail licenses, according to a May 2024 analysis by economist Beau Whitney, commissioned by the Washington State Liquor and Cannabis Board, which oversees implementation of the cannabis rules.

The report concludes that the legal stores collectively sell about 50-55% of cannabis or marijuana sold in the state. Illicit sales account for the rest. If all cannabis sales were channeled through legal stores, the state could support nearly 800 licenses, the report noted.

For fiscal 2024, the state distributed nearly $23 million in cannabis-related taxes to the cities and counties that allow stores. The state retains most of the money generated to support health and education initiatives, resulting in relatively paltry checks for local governments.

In the Mid-Columbia, Benton County received nearly $479,000, Benton City received $6,200, and Prosser received $23,400.

The city of Pasco does not appear on the 2024 distribution list because its stores haven't been open a full year. It confirmed it received a quarterly cannabis payment of $11,000 on Sept. 30.

Jon Funfar, spokesman for the city of Pasco, said the city will earmark cannabis tax proceeds to support its parks.