One of three applicants for recreational marijuana-based businesses on Whidbey Island is pulling its application.

Ester Bandelin Rodriguez said the planned Coupeville-based Salish Sea Industries is withdrawing its land-use permit due to federal regulation conflicts.

Rodriguez, along with Judy and Josh Harvey, and Mark Rodriguez proposed to build a 3,833-square-foot barn for the production and processing of marijuana on Edgefield Lane off Engle Road.

The problem, Rodriguez said, was part of the property includes a conservation easement with the Whidbey Camano Land Trust.

“As there is a federal component to this easement, which provides little to no flexibility at present time, we simply do not wish to enter into a protracted legal battle with the federal government at taxpayer expense,” Rodriguez and her counterparts said in a prepared statement.

Pat Powell, executive director for the Land Trust, said she notified Salish Sea Industries that the terms of the conservation easement would not allow them to do something that is in violation of federal law.

Powell said part of the $75,000 easement was paid for with federal funds.

“The Land Trust has no position on this issue,” she said. “We just have to make sure property owners comply with easement regulations.”

The proposed location for Salish Sea Industries lies within Ebey’s Landing National Historical Reserve. County officials initially proposed banning pot businesses from the area, but that changed after Coupeville farmers said they were against restrictions that would treat Central Whidbey different from other areas of the county.

While the permit was still in process, the public was invited to comment.

One resident wrote against the proposed business, but Rodriguez said he was misinformed and thought all property within in the reserve is federally owned, when in fact a large portion is privately owned.

While working on the permit application, Salish Sea Industries worked with Island County, the Land Trust and Ebey’s Landing National Historical Reserve.

“To our knowledge, we were in good standing with all of them,” Rodriguez said. “The only conflict we encountered was the easement.”

While not all of the proposed location is conservation easement, Salish Sea Industries cannot operate on the other portion of the property because the bordering property is zoned rural residential.

Per Island County Code, marijuana-based businesses cannot operate in rural-residential areas.

Another permit application still in processing is submitted by Maureen Cooke, who filed applications for a site plan and a building permit for a 760-square-foot marijuana retail store in Bayview next to the El Corral Mexican restaurant.

She opened the shop for a short time in early August — though she didn’t have any product — but it turned out she didn’t have the necessary approvals from the county.

A third Whidbey Island applicant submitted this month, Bud Brothers, a proposed producer/processor business on Goldie Road in Oak Harbor.

“We’ve had several pre-application conferences and conversations with potential applicants that have yet to file for county approval, but at present, we have only three applications,” said David Wechner, Island County Planning Director. He confirmed Salish Sea Industries withdrew its application Tuesday morning via email.

A third application is also pending for a business proposed on Camano Island.