Washington Faces Higher Legalization Hurdles than Colorado
We are six months into Colorado’s rollout of legalized recreational marijuana markets and the results have been remarkable. From over $27 million in marijuana tax revenue to law enforcement finding no pot shops selling to minors or increases in marijuana-impaired driving, every current indicator points to success in Colorado.
But Washington State looms next week as Act II in the story of retail marijuana legalization. Like the second act in any screenplay, this is where the tension begins.
Colorado had the distinct advantage of merely attaching a recreational side to its already well-established and highly-regulated medical marijuana shops. Many details about packaging, inspections, manufacture, training, security, and distribution had already been worked out by the medical dispensaries working with the state Marijuana Enforcement Division.
Meanwhile, Washington has had the dubious distinction of being the least-regulated medical marijuana state next to California. Like California, it remains the only medical marijuana state without even a statewide patient registry. In Washington, a medical marijuana patient isn’t even protected from arrest; they merely have an affirmative defense to marijuana charges in court.
A system of medical marijuana dispensaries has evolved in Washington, but aside from some paying sales taxes, they provide no guidance or assistance to the recreational side of the market. Thus, the Washington State Liquor Control Board (WSLCB) was tasked by I-502 legalization initiative to create an entirely new marijuana market from scratch, and now the problems are looming.
The WSLCB will be issuing the first recreational retail licenses on Monday, July 7. But while I-502 approves up to 334 retail pot shops, WSLCB will only be issuing 15-20 licenses next Monday. Of those potential licensees, WSLCB reported that only one outlet in Seattle was ready for final inspection to open on Tuesday, July 8.
When those first few stores open, they may not have much product for long. Over 2,600 applications for recreational grow licenses were fielded, but only 80 growers have yet been approved, and most of those growers won’t have anything harvested by July 8.
You won’t initially find any edibles in the Washington pot shops, either. Commercial kitchens to produce marijuana-infused products must be inspected and licensed. Of the two kitchens inspected so far, one is still in process and the other was rejected for, among other things, lacking a hand-washing sink.
Finally, if you can finally find an open Washington pot shop with product for sale, you’ll be hit with that triple-25% that has opening prices estimated at $25 per gram, or twice what the going rate is in Washington’s medical gray market and recreational black market. Many experts believe WSLCB’s stated goal of capturing 25% of the black market is near impossible given such high prices and product shortages.
I believe Legalization’s Act II in Washington will be a chaotic, overtaxed debacle that casts a shadow nationally over Colorado’s successful Act I, but only for a year. Act III – Oregon’s legalization – is coming soon on the ballot. When passed, by summer of 2015 Oregon’s low cost, unlimited licenses and flat tax of $1.25 per gram will force Washington’s legislature to reduce taxes and increase production and retail outlets if Washington wants to compete with Oregon for marijuana tax revenue.