Weekly MJ Report 4_6_2015 (1) (1)

Weekly MJ Report 4_6_2015 (1) (1)

 

Infographic obtained through Spokane City Council WSLCB public records request. Many thanks to Blaine Stum for sharing it with us.

by Dr. Dominic Corva, Executive Director

Two weeks ago, the WSLCB released a massive raw Biotrack data dump to CASP and many other individuals and organizations that have been trying to track the emergence of Washington’s legal cannabis landscape. To my knowledge we are all — even private information organizations — still attempting to organize the data into coherent parts. In the mean time, CASP has been receiving requests for updates to publicly available information from the WSLCB “Frequently Requested Lists” site. This post is an effort to provide the best information we have right now, in response to rising public interest on the one hand and pending raw data processing on the other.

The infographic above is the only known document of its kind, possibly representing a document that will in fact be released on a weekly basis from the WSLCB to the public at large. While the licensing numbers are of particular interest and continuous with previously known data, I want to draw the reader’s attention to flower harvest and useable marijuana produced in this fiscal year.

According to the Washington State Board for Community and Technical Colleges, ¬†the state fiscal year is defined as follows:¬†“State Fiscal Year = A 12-month period used for budget and accounting purposes. The state fiscal year runs from July 1 through June 30 of the following year, and is named for the calendar year in which it ends (e.g., July 1, 2013 through June 30, 2014 is state Fiscal Year 2014).”

Thus, the fiscal year to which this document refers runs from July 1, 2014 through June 30, 2015. This time period encompasses virtually all of the possible Washington State cannabis harvests and sales so far. Therefore, the numbers in this worksheet, if they are accurate, represent the best picture of the Washington State legal cannabis landscape to date. There are three items of particular interest.

1. The numbers represented here render all of the previous calculations done on this site and others obsolete, in terms of accuracy. According to this infographic, only 15,865 lbs of usable cannabis, which I am interpreting here as salable flower, has been harvested to date, meaning that the fall 2014 harvest flower glut could not possibly have been the product of a 30,000 lb outdoor harvest. Instead, it would seem the exaggerated volume from harvest reflects total cannabis produced (including raw material for extracts).

2. We are producing¬†approximately 688 lbs usable flower /month, if we take this “April 6″ update to represent March’s “MTD” rather than the six days of April. This seems like a reasonable conjecture, but can’t be taken as gospel at this point.¬†That number should be taken as the current indoor capacity of the I 502 system, since we assume zero outdoor or greenhouse production this time of year (even though it’s possible and in fact likely that there are some hybrid greenhouses out there that have continued to produce through the winter).

3. The ratio of buds to raw material produced per plant was initially assumed to be 1:1 per WSLCB statements. But from these numbers we see that ratio is 43,002 lbs raw material to 15,865 lbs buds, or approximately 3:1 raw material to buds. This supports CASP’s insistence that¬†processing for extraction (as opposed to making pre-rolls) is the name of the game and if your producer/processor license’s business plan ignores this basic fact then you¬†aren’t maximizing your chance for success in what will be an increasingly competitive market.

We will go much further into the data when we figure out how to extract it from the files provided to us through our public information requests. I want to tip my hat to the WSLCB, which has had to deal with what appears to be a truly messy Biotrack reporting system, for deciding to go ahead and let the rest of us have a crack at it.

 

 

 

helpwanted

by Dr. Dominic Corva, Executive Director

CASP has recently received a huge raw Biotrack data dump from the Washington State Liquor Control board. It is extremely difficult to render the data coherent enough for analysis. We are looking for volunteers who can spend supervised time with Dr. Corva and staff to help sift through the data, which apparently will be updated on the 15th of each month. If you are extremely good with databases, Excel, and programming that can turn raw data into manageable components for analysis, please contact Dr. Corva at dominic@caspcenter.org.

Thank you.

I502medtit

 

Map by Dr. Richard Morrill, Emeritus Professor of Geography, University of Washington

Database architecture by Steve Hyde

by Dr. Dominic Corva, Executive Director

As the Washington State Legislature prepares to shut down medical marijuana access points by July 2016, it is helpful to begin to think about how many more I502 retail access points with medical cannabis endorsements will have to open to ensure the same level of geographic access Washington medical cannabis patients currently enjoy. Although available data is difficult to come by, this post is a first attempt at clarifying this picture for the public and policymakers.

The map above represents county-level shares of approved (not necessarily currently open) I 502 retail points and DOR-identified registered, tax-paying medical cannabis businesses. There are many problems with this data. I 502 approved retail points are growing in number at a rate of approximately 3-4 a week: the rate of openings is unknown. On the medical side, we are not sure how many of the 450+ medical marijuana businesses registered with the Department of Revenue (DOR) are retail access points (brick and mortar or delivery) and how many might be taxpaying producer or processor businesses.  The largest medical cannabis producer/processor-only business in the state, SODO-based New Leaf Enterprises (DAMA products), converted to I 502 status last month, so this number is also in motion.

“Patient access” is significant policy concern in the state of Washington, and the subject of much debate. Critics of the medical marijuana system, including I 502 business interests that have bulldozed the state’s longtime medical cannabis policy approaches in this legislative session for competitive rather than ethical reasons, have used the Seattle Times editorial board and anonymous “Staff” ( see here, here, and here, for starters) repeatedly over the last year to question the basic validity of the medical cannabis patient category. Medical marijuana advocacy organizations such as Americans for Safe Access [CASP’s fiscal sponsor is the federal 501(c)(3) sister organization, Americans for Safe Access Foundation – ed.] have spent a great deal of time and money pushing back against “cannabiz” strategies during this legislative session but with almost nothing to show for it.

So the question of access has been successfully framed as a question of the fundamental validity of cannabis as medicine, with zero efforts by anyone to collect real data on either patients or access. This post is agnostic on the question of “how many patients are real patients” because there is simply no data either on what constitutes authentic medical need, on the one hand, and what percentage of existing medical access point consumption is “valid.” Instead, we posit that absent real data about patients, we can instead provide real data about geographic access for however many existing and potential “real patients” are out there in the State.

Our ethical grounding point is the observation that¬†if a single “authentic” patient loses access of any sort — geographical or socioeconomic — then bulldozing the medical cannabis landscape so that I 502 industry can gain competitive advantage is bad social policy. Medical cannabis policy originating from voter will through the 1998 initiative has had zero complaints from patients, wherever they are in the state, and instead has been accused of social harm by everyone but patients and doctors. Instead, accusations of social harm have demonstrably come from I 502 business interests that have lined the pockets of state lobbyists and legislators who have no knowledge of cannabis as herbal medicine; how cannabis products have evolved considerably from flower through the state’s medical cannabis system; and how this has been facilitated by the lack of punitive regulation introduced this legislative session.

As a result, the above landscape tells us something about ease of geographic access to (some kinds of) cannabis via the I 502 system for adult users, at the county level. The good news appears to be that in some rural counties, I 502 retail access points appear to provide access to cannabis for the first time (keep in mind our medical n only includes DOR-registered, taxpaying businesses). This is indicated by mostly blue circles.

But where the state’s population is concentrated, up and down the I-5 corridor and in Spokane to the East, and in some rural counties, patients will demonstrably lose access to retail medicine absent several changes over the next year and change.

First, I 502 stores are forbidden by law to include medical or therapeutic information through customer service or product packaging. This is substantially different from medical access points, most of whom provide some, admittedly sometimes accurate, information about therapeutic aspects of different varietals and “strains.” The paucity of accurate information in both systems is a significant policy concern, but it is not addressed by shutting down the system that actually provides some useful information, and legislating “medical endorsements” for some unknown number of I 502 retail points, some unknown number of which may be existing dispensaries that applied for but did not win favorable retail lottery placements in March 2014. In order for the state to provide as much geographical access for patients as is currently available according to DOR data, it will need to ensure that each of those circles represents the same number of medically-endorsed I 502 retail stores — some 430 across the state by July 2016.

Second, although cannabis testing standards and best laboratory practices¬†in general are extremely problematic, the I 502 system has clearly exacerbated tendencies to reward labs that produce higher THC results. THC percentages are up 5-10% over previous ranges for medical markets. It’s quite clear that the I 502 system equates commercial “recreational” value with THC levels, reversing trends in medical markets to favor whole plant characteristics: varieties of cannabinoids especially CBD; and terpenes that may have as much or more therapeutic value than cannabinoid ratios. This is partially the result of stringent “security theater” regulations in I 502 that (a) keep the consumer from evaluating the product they are buying by smell and (b) severely limit visibility by requiring pre-packaging. Cannabinoid listing and “strain” name are pretty much the only things the I 502 consumer have to go on when it comes to purchasing flower. In order for the state to provide as much geographical access¬†to diversity of flower¬†terpenes and cannabinoids, as¬†as is currently available according to DOR data, it will have to relax those packaging rules and police lab practices and standards set forth in the American Herbal Pharmacopeia that are currently being flouted widely in the interest of capturing lab market share. Recent statements by WSLCB indicate that they are aware of the problem and are taking promising steps.

There are many, many more problems with patient access that will be exacerbated by proposed changes to I 502 and medical cannabis policy, but this particular post is agnostic on these. Instead, it uses real data (with transparent limitations) to provide evidence that Washington state cannabis policy changes proposed in the legislature are¬†bad social-geographic policy. The interests of Washington citizens — “society” at the state level — are poorly served by limiting geographic access to herbal medicine for patients, however many of them there are.

 

 

 

oregon

by John Sajo

After the dramatic hearings on implementing Measure 91 this week I think marijuana advocates need to clarify our positions on some key issues. There is much discussion about eliminating the black market as one of the goals of Measure 91. Breaking the black market down a little bit will help analyse how to reduce it. There are many different aspects of the black market but they are not equally dangerous.

The black market is any sales of marijuana outside the legal, regulated system. After July 1, when legalization takes effect, there will be many ways marijuana can be transferred between adults that will be legal but outside the regulated market. Any adult will legally be able to give any other adult up to an ounce of marijuana. Anyone holding a medical marijuana card can already legally give any other cardholder up to 24 ounces of marijuana. Thousands of pounds of marijuana will be exchanged legally between adults outside of the regulated market.

An adult selling anyone marijuana anywhere other than in a medical dispensary or rec store will be illegal. Anyone selling marijuana to a minor will be illegal. These transactions constitute the in-state black market. They can range from a friend or neighbor exchanging cash for marijuana at home to someone buying marijuana from a stranger on the street. There have been established criminal networks distributing marijuana illegally for decades.

The out-of-state black market is noteworthy because the Cole memo requires states to maintain a robust regulatory structure to prevent it. Oregon has a long history of exporting marijuana. In 1986, Oregon marijuana legalization activists campaigned with a brochure headlined “Oregon’s Billion Dollar Crop” that was based on NORML’s estimate of the value of Oregon’s marijuana crop that year. Marijuana seized in other states has been linked to OMMP gardens in many cases but this must be considered in the context of an underground market that was estimated at a billion dollars thirteen years before the OMMA even existed. The percentage of Oregon marijuana exports related to the OMMP is unclear.

Many marijuana grows linked to Mexican cartels have been busted on public lands in Oregon. The largest seizure a few years ago was over 100,000 plants. Presumably most of this marijuana is exported from Oregon through existing criminal networks. There is also a substantial amount of marijuana “hidden in plain sight” in basements, warehouses and outdoors that is cultivated by Oregonians illegally and shipped out of state. Many out of state marijuana seizures are linked to Oregonians with no ties to the OMMP.

After July, marijuana will illegally “leak” out of Oregon through many different channels. Marijuana will be shipped through the mail and through private carriers. People will drive marijuana out of state in their cars. People will fly to other states with marijuana in their luggage. Millions of cars and millions of airline passengers leave Oregon every year. To put the challenge of stopping leakage in perspective note that Colorado sold 140,000 pounds of marijuana in 2014. If Oregon produces a similar amount it would only take a half dozen semi trucks to carry the entire state’s production. Smugglers are no doubt becoming more sophisticated and shipping more shatter. A million dollars worth of shatter could easily fit in one car. Stopping leakage from Oregon to other states should be recognized as an unattainable goal in a free society.

SB 936, HB 3400, other legislative proposals and the OLCC have all proposed “seed-to-sale tracking” of small medical marijuana gardens as part of a robust regulatory structure to satisfy the Cole memo. I support tracking of large commercial marijuana farms, but tracking of small patient gardens is an unwarranted government intrusion into the private lives of patients and people trying to help them. Worse yet, those two bills would effectively cancel the safe access to medical marijuana for 13,000-23,000 of the 70,000 registered patients by prohibiting patient coops larger than either 4 or 8 patients. Some people support those provisions because they believe it is necessary to satisfy the Cole memo. Other people support those provisions because they believe that patients can be coerced into shopping at regulated dispensaries or recreational marijuana stores. Both ideas are completely wrong.

The Cole memo does not specify exactly what is required to continue federal tolerance of Oregon’s legalization law. It does not mention tracking. Oregon has allowed patients and growers to sell untracked marijuana to dispensaries for over a year and the federal government has shown no interest in shutting this down. Washington has a chaotic medical marijuana market with no tracking and the federal government has not acted to shut that down. In December, Congress passed a budget rider that forbids the U.S. Justice Department from spending money pursuing activity legal under a state medical marijuana law and the significance of this is currently being litigated.

The idea that patients can be shifted over to either medical dispensaries or to adult use stores ignores the painful reality of these patients’ lives. In 2014, 44% of OMMP patients qualified for reduced fees due to their low income. These patients have virtually no disposable income. If SB 936 prohibits them from being part of a coop garden, they won’t be able to shop at a dispensary instead. They will have to find a grower that doesn’t already have patients, depend on charity from others, or go without.

Trying to coerce patients into a market they can’t possibly afford is particularly cruel but the policy of trying to coerce customers into regulated stores is a terrible idea in general.

Tracking is appropriate for the commercial marijuana industry because it will raise quality, improve farmers’ best practices, and promote efficiency. It will allow any contaminated product to be traced back to its source to identify the cause and minimize any adverse public health impact. Tracking will not have a big effect on diminishing black markets. Requiring tracking on small cooperative gardens merely adds a burden on patients and their caregivers. What if a patient growing for other patients fails to report or makes mistakes. Are we going to penalize a struggling sick person for being unable to comply with arbitrary and unnecessary red tape?

The quality of information in a tracking system is suspect. Potentially millions of events and measurements are being tracked. Who is going to audit all that data? When a farmer reports that a plant was destroyed due to mold or bugs, is an inspector going to come check the compost pile? If cameras are required to audit the tracking system in real time, are they going to include night vision sensors to prevent cheaters from picking and diverting flowers in the dark? Can we be confident that hackers will never be able to modify the online data? How will we insure that OLCC employees are not corrupted the old fashioned way with bribes or threats? Tracking may sound good in the abstract but when applied to the real world situation of monitoring growing plants in diverse environments its effectiveness should be balanced against costs.

The only way to diminish the black market is to create a thriving efficient regulated market that significantly undercuts black market prices and offers wider selection, better quality and a safe comfortable environment. The regulated market can produce marijuana much cheaper by allowing growers to cultivate without plant limits. Plant limits raise prices and lower quality. Regulated growers operating openly without arbitrary limits – and without unneeded expensive regulation – will be able to undercut prices of any other source. Outdoor growers in particular can scale up dramatically without much increase in expense. The black market can be defeated by market forces, not by arbitrary rules with lots of unintended consequences.

Support for building an industry of family farms and small businesses is extremely strong. Some have proposed plant limits as a way to protect family farms against giant corporate farms but there are much better ways to do so. A progressive tax or fee structure will allow all farmers to take advantage of the economy of scale by growing large numbers of smaller plants. This is much more efficient and produces better quality harvests much faster.

Oregon can and will greatly diminish the in-state black market. The most important part of this will be much lower prices. The problem with this solution is that it will exacerbate the problem of out of state leakage. As Oregon prices drop, more out of state tourists will be attracted here and some will try to take marijuana home to other states. This highlights the real elephant in the room – federal law. It might be worth pointing out that some of this out of state leakage is desperate medical patients from other states seeking relief in states where their medicine is legal. Last year a Missouri patient traveled to Colorado to see if marijuana would help her. It did. She tried taking some home but was arrested driving through western Kansas, where she died in jail because she was denied access to her prescription drugs. An Oregon patient I know was convicted of a felony for mailing marijuana to herself so she could medicate while visiting family in another state. We might also ask if it isn’t better for Americans in other states to be buying marijuana from Oregon rather than supporting the Mexican drug cartels which represent a clear and present danger to the security of our nation? Oregon must implement Measure 91 to satisfy the Cole memo but there are many ways to do so. We should also be aware that actually succeeding in its goals would have some negative unintended consequences. I suggest that Oregon should also spend time and resources trying to lead the federal government away from a dysfunctional and destructive policy that is unsupported by either the citizens of our country or science.

What are some alternatives to seed to sale tracking to minimize out-of-state leakage? I suggest focus tracking on people and money, not plants and patients. There is a virtual gold rush of out-of-state investors seeking to buy marijuana farms and businesses. The most significant and destructive leakage would be if organized criminal enterprises like Mexican cartels or biker gangs in other states own and control Oregon farms. Regardless of tracking, I believe such organizations would be able to divert large amounts of marijuana into their existing distribution networks. This activity could be minimized by not allowing out-of-state ownership of marijuana businesses and carefully regulating investment in such business. This would prioritize focusing on the most harmful aspects of leakage and would do so with inexpensive effective tactics.

Many of these challenging policy questions will be solved over time. There should be no rush to dismantle programs that are working. All this can be revisited by the 2016 Legislature.

All this background leads me to the following policy proposals for the Legislature:

1) Honor the will of the 56.1% of Oregonians who voted to leave the OMMA alone. Don’t limit patient coops. Don’t track small gardens.
2) Do not allow out of state ownership of marijuana farms.
3) Do not impose plant limits on Measure 91 commercial growers.
4) Impose marijuana taxes and fees progressively to protect family farms and small business
5) Require tracking of large commercial farms to protect public health

I am looking forward to a productive discussion of these ideas.

IMG_1640

 

Legal Light dep hoops in Omak, Washington, 2014. Photo by Steve Hyde.

by Dominic Corva, Executive Director

It’s spring planting time! ¬†What are you going to do with your canopy this year? Hopefully you’re already built out and know how much of your canopy to light dep, how much to go full term, how much to hash crop, and what strains you’ll be focusing on. If not, this post is intended to help outdoor and greenhouse¬†I 502 producers and processors make the most out of their canopy over the next 9 months.

In order to make those decisions, you’ll need to understand how this year’s market dynamics will be very, very different from last year. Last year, just a few dialed-in producers contributed to a fall harvest sizable enough to overwhelm the 60 or so retailers that were open on the first of the year. As a result, prices fell dramatically, approaching par with medical and black market prices at both wholesale and retail. This dynamic panicked many producers, but it gave approved retailers the confidence to open up at a more rapid rate and attracted some unknown number of new consumers to the legal market.

This year, we’ll see the same pattern but on a much, much bigger scale. The variables to watch out for are: how many more retailers will open and how many more effective producers will realize a 1000 lb crop or more?

We still have less than 100 out of 334 allotted retail slots open, with about 125 approved. If conditions hold — conditions that include bans or moratoria in 40% of the WSLCB’s 120 retail jurisdictions — we can expect about double that number open in the fall. That means that if we more than double last year’s 20+ thousand lb fall harvest, we will see prices crash to a level that will put all but the most efficient or capitalized operators out of business. It is possible that the WSLCB will open up retail geographies one way or another, which that would help a great deal.

I project right now that we will have at least five times the 2014 harvest, given that only seven out of 185 producers managed at least 1200 lbs and the next highest volume producer came in around 600 lbs. And all that was on a short-term harvest cycle, with most getting fully vegged plants in the ground from black and gray market sources by early August 2014. This year, you are starting now, more or less; and a whole lot more of you are open. How many more will be the subject of posts this week.

So, excluding the Tier 1s,  what do you do with your 21,000 or 7,000 square feet of canopy?

1. Light dep. At least a third of your canopy should be devoted to a light dep harvest, followed by full term canopy once harvested in July at the latest. This way, you’ll be able to get wholesale prices when the market for flower is strongest. Already, we are seeing prices bounce a bit from the winter glut. Inventory is clearing, and more stores are opening, which means we may see a significant wholesale price bump starting in May, through August. The light dep crops will start to drive those prices down in September.

2. Hash crop. If you’re going to see $2/gram wholesale prices in November, save yourself some work and dedicate a huge portion of your field to a hash crop destined for processing rather than flower sales. Hash crops require far less maintenance and minimal grooming at the end, depending on how you intend to process them. You’ll save big on production costs and give yourself the option to either sell high quality raw material (ie, buds as well as trim/shake) to specialist processors, or …

3. Maximize your value-added by processing it under your own license. Whether this means in-sourcing one of the many high quality concentrate specialists from medical and black markets; leasing or purchasing a CO2 or other solvent-based closed-loop system; or, my favorite, using your best material to make high-rated solventless icewax; capturing more value in the process means a great deal for your bottom line.

Currently, 6-star solventless concentrate is the highest value-added cannabis product out there. It’s not easy to make, and the expertise to do so is scarce, so get started now on developing that expertise by identifying or cultivating talent. The first thing you have to know is that it’s all about the raw material, so buds harvested at the maximum terpene level or cured to a maximum terpene profile, are a must. When it comes to hash, it’s not just about potency — it’s about potency¬†and terpenes, which is why BHO concentrates have limited appeal. It’s not impossible to make BHO with a great terpene profile, but it takes a master.

4. Choose your strains wisely. The market potential¬†of legal cannabis is wayyyyyy beyond potency, which is the old reliable for black and gray markets. New consumers are going to want balanced cannabinoid profiles, novel terpene profiles, CBD-rich profiles, and more. For the last several years, domestic cannabis producers have been afraid to commit a significant percentage of their crop to CBD-rich strains. This year, CBD-rich flowers are being sold at a premium¬†and hardly anyone has them in commercial quantities. Don’t be afraid to commit a chunk of your canopy to CBD-rich strains — when everyone else is desperately trying to offload THC-rich material, your CBD-rich material will attract retailers.

Good luck everyone!

 

 

I-502 Sales Forecast

I-502 Sales Forecast

By Dr. Jim MacRae, CASP Research Associate

As we approach the 8-month anniversary of Washington’s market for State-legal Cannabis, a clear pattern of linear growth is emerging in the level of observed total daily sales. When one considers that, as of Monday Feb 23, 2015, the State-legal Cannabis market in Washington has generated over $100 million in cumulative sales, this growth suggests strong future revenue potential for the State.

Driven in large part by the steady approval of I-502 licenses and the associated structural growth in the market, the ‚Äúbest-fit‚ÄĚ linear trend is currently predicting a daily increase in the level of sales of almost $2,660 (e.g., next Monday is expected to generate $18,600 more than this Monday did).

We assume that one of the primary determinants of the growth rate seen so far in State-legal Cannabis sales is the rate of licensing of new I-502 businesses (primarily Retailers). Under this assumption, current levels of sales growth are expected to increase until approximately March of 2016 (at which time, we estimate that the WSLCB will have largely completed processing the initial batch of I-502 Retail business applications).

Using the conservative assumption that sales will continue to grow at their current rate until March 27, 2016 and then will go flat, we estimate the following annual sales totals for 2015 and 2016:

In 2015, $392,200,400 in total State-legal Cannabis sales are expected (generating $98 million in excise tax revenue).

In 2016, sales of $645,789,342 are expected, (generating over $161 million in excise tax revenue).

For those currently considering legislation that will impact this industry, these estimates would serve well as a ‚Äúfloor‚ÄĚ or baseline against which future projections could be compared.

If the punitive 25/25/25 tax burden continues, business failures will tend to decrease revenue (and taxation) expectations.

If local governments are allowed to continue the obstructionist position that many are taking, even more businesses will fail or fail to begin operations and these expectations for revenue (and taxation) will decrease.

If, on the other hand, restrictive regulations, inappropriate geographic restrictions, and obstructionist permitting processes are discouraged, this marketplace will develop and grow. With the institution of a taxation structure that allows at least the possibility of competing with unregulated Cannabis markets, this marketplace could well thrive.

Call your Representatives and/or Senator(s) today and let them know that you want to see this market thrive and that a vote supporting the State-legal Cannabis Industry is a vote against the black market and all of the unregulated behavior, nasty up-selling, and targeting of minors that tend to go along with it.

Video by Steve Hyde

 

by Dominic Corva, Executive Director

On Monday, February 16, I sat down with Todd Arkley, CPA, to discuss the state and trajectory of I 502 tax policy as it relates to the big picture; and to do a little ethnographic interview in order to situate Todd’s knowledge in the development of cannabis policy as social policy in Washington State. The interview’s first half addresses the former, and the second half the latter.

The content of this particular interview is extremely timely. In the ecology of social issues that shape state cannabis policy, tax policy is currently dominating how the state makes cannabis policy.

This creates a problem for the optimization of cannabis policy in Washington State. Arguably, I 502 was passed primarily to address the state’s crime policy, informed heretofore mostly by the punitive war on drugs.

Once it was passed, however, it became subject to competing social problems: how do we make good policy for cannabis patients? how do we make good policy for parents with children? how do we make good policy for creating a new market? how do we make good policy for banking? And so forth.

Right now, the only social problem that legislators are interested in is maximizing revenue for our cash-strapped state. They seem to see this in a very simplistic fashion: what is preventing the maximization of tax revenues?

To that end, they have found a well-funded constituency that has purports to have an answer for them. It goes something like this: shut down any potential competition to the I 502 market.

That answer is appealing because it is simple; and because it converges with a singular private interest: vested I 502 business owners, particularly those associated with Martin Tobias’s Washington CannaBusiness Association.

Unfortunately, those business owners do not understand how this way to address the social problem — tax revenues; and the private problem — dysfunctional legal cannabis markets; is unlikely to help either because medical cannabis markets are not the reason the system is dysfunctional.

The system is dysfunctional because the Washington State Liquor Control Board, presumably at the direction of the Governor’s Office, insisted on creating a very tightly regulated market aimed at capturing a very small percentage of Washington State cannabis consumption. There is nothing inherently wrong with that, but this design cannot possibly maximize public and private revenues.

The system is dysfunctional because the slow pace of approval has given reactionary forces time to organize against I 502 proximity in their localities.

The system is dysfunctional because the Association of Washington Cities has organized to block I 502 implementation in order to gain shares of I 502 revenue.

And yes, the system is dysfunctional because the tax structure cripples profit margins in a nascent industry.

Medical cannabis markets will be in competition with I 502 markets when the latter are able to provide geographic accessibility aligned with the reality of Washington State cannabis consumption (and certainly not 25% of it); when the production/processing/retail chain smooths out from the feast or famine pattern of the last eight months; and when that system starts producing the range of goods available in black and gray markets.

Legislators and private Big Money Cannabis groups have apparently not heard that all attempts to eliminate the black market for cannabis for the last 40 years have only served to make it stronger. Prohibition makes profit margins possible, and the retreat from prohibition has already driven down black and gray market margins within range of basic cost of production, at least on the West Coast.

The public needs to know, and policymakers need to understand that their current alignment of tax revenue maximization with I 502 Big Money interests can only be suboptimal policy for everyone, including the legislators and lobbyists who are pushing it.

 

02102015_RETAIL_POINTS_MAP

Map by Steve Hyde

All textual information in this post comes from the 2/3/2015 WSLCB “Frequently Requested” Marijuana Applicant list. The map reflects the 2/10/2015 list.

by Dominic Corva, Executive Director

It’s been a while since we’ve looked at the progression of I 502 Retail Cannabis landscape, pictured above in the map by Steve Hyde. The conjunctural interest is driven by our need to understand how fast I 502 retail stores are currently being approved, now that the availability of supply is no longer a barrier to entry. We expected more retailers to open up once this happened, and in the trendline below we see that around January 1, 2015, the pace of new approvals began to exceed the overall trend since July 6.

image (2)

 

There are lots of other factors that influence retail decisions to go into business, of course. The availability of affordable retail space for lottery winners, and subsequent lottery replacements for the 25 retail applicants who for one reason or another failed to cash in on their lottery number, is the most significant variable. This of course is also influenced by jurisdictional bans and moratoria that represent a ceiling on how many of the 334 retail slots can possibly open, even given approval.

It’s also important to note that many “approved” applicants are not yet open, because it takes a little while to open retail doors once approved. As of February 3, 2015, 117 retail stores have been approved.¬†Dozens of that number are not yet open, and we anticipate that their arrival in the market will¬†help clear the harvest bounty. It is too early to say how much.

But one thing we can say with some confidence, is that the flip side to the Producer/Processor glut problem is that prices are down and quite possibly, I 502 recreational stores may be picking up consumers for whom I 502 product is a reasonable substitute for medical access point product, if price of flower is the main obstacle to switching over. Of course, there’s a lot more to it than that, but the closer retail prices for comparable product¬†for comparable consumers (ie, not patients), the easier it will be for I 502 producers to clear inventory.

The other factor is of course geographic accessibility. And the I 502 retail landscape, by design, limits that considerably. At some point in the near future we will publish a comparison between the I 502 retail landscape above, and the 462 tax-paying medical cannabis access points registered by the Washington State Department of Revenue.

Below, a table of the 117 approved (not necessarily open) retailers identified in the 2/3/2015 WSLCB list. If you own a retail store that has a web site that is not listed, please contact us and we will fill in that information for you.

 

Trad-ename License # Street Address City County ZipCode DateCreated DayPhone Web Site
2020 SOLUTIONS 415470 2018 IRON ST STE A BELLINGHAM WHATCOM 982264212 7/6/2014 3603938697 http://i502solutions.com/
TOP SHELF CANNABIS 414256 3863 HANNEGAN RD BELLINGHAM WHATCOM 982269103 7/6/2014 3602243735 http://www.topshelfcannabisbellingham.com/
MARGIE’S POT SHOP 413414 405 E STUEBEN BINGEN KLICKITAT 986050000 7/6/2014 5094930441 http://www.margiespot.com/
BUD HUT 413901 1123 E STATE ROUTE 532 CAMANO ISLAND ISLAND 982828833 7/6/2014 4254789928 http://www.thebudhut.net/
FREEDOM MARKET 414280 820A WESTSIDE HWY KELSO COWLITZ 986264355 7/6/2014 3603550682 http://freedommarket420.com/
420 CARPENTER 415083 422 CARPENTER RD STE 105 LACEY THURSTON 985037906 7/6/2014 3604026368 http://www.420carpenter.com/
WHIDBEY ISLAND CANNABIS COMPANY 417511 5826 S KRAMER RD STE A AND D LANGLEY ISLAND 982600000 7/6/2014 3603216151 https://www.facebook.com/pages/Whidbey-Island-Cannabis-Co/691508350904708
4US RETAIL 413700 23251 HWY 20 OKANOGAN OKANOGAN 988400000 7/6/2014 3602240978 None
CANNABIS CITY 413319 2733 4TH AVE S SEATTLE KING 981341912 7/6/2014 2066821332 http://cannabiscity.us/
VERDE VALLEY RETAIL SALES 413596 4007 MAIN ST UNION GAP YAKIMA 989032040 7/6/2014 5094203430 https://www.facebook.com/VerdeValleyRetail?ref=br_rs
AUSTIN LOTT 413530 29 HORIZON FLATS RD STE 8 WINTHROP OKANOGAN 988628400 7/6/2014 5094295556 None
MILL CREEK NATURAL FOODS 414250 4315 MAIN ST STE A UNION GAP YAKIMA 989032115 7/11/2014 5098400186 http://www.millcreekfoods.com/
HERBAL NATION 413683 19302 BOTHELL EVERETT HWY BOTHELL SNOHOMISH 980127113 7/18/2014 4254852535 http://www.herbalnationbothell.com/
HERBAL ACCESS RETAIL 414418 661 NESS’ CORNER RD PORT HADLOCK JEFFERSON 983390000 8/1/2014 3602977996 None
221 414574 18729 FIR ISLAND RD STE C MOUNT VERNON SKAGIT 982738159 8/4/2014 3604454221 http://www.221inc.com/
MARIJUANA MART 413370 1405 YELM AVE E YELM THURSTON 985979480 8/4/2014 3604801912 None
SAVAGE THC 412066 4428 WILLIAMS VALLEY RD STE A CLAYTON STEVENS 991109745 8/6/2014 5099992989 https://www.facebook.com/savagethc
TOKEN HERB 400209 837 A CRESCENT BEACH RD EASTSOUND SAN JUAN 982451695 8/11/2014 3603766900 https://www.facebook.com/pages/Token-Herb/1527134654199061
HIGH SOCIETY 414430 1824 BROADWAY EVERETT SNOHOMISH 982012349 8/14/2014 2063071651 http://www.cannarailstation.com/
LOVING FARMS 412370 2615 OLD HIGHWAY 99 S MOUNT VERNON SKAGIT 982730000 8/14/2014 3605405168 http://www.lovingfarmsmarijuanastore.com/
CANNARAIL STATION 413366 1448 BASIN ST NW SUITE A EPHRATA GRANT 988239695 8/18/2014 5097541047 http://www.cannarailstation.com/
THE GREEN SEED 412495 8420 ASPI BLVD STE 3 MOSES LAKE GRANT 988373601 8/22/2014 5098552271 None
LONGVIEW FREEDOM MARKET 413544 971 14TH AVE STE 110 LONGVIEW COWLITZ 986324049 9/4/2014 3606360420 http://www.freedommarket420.com/
CANNAREX 414060 2714 HENSON RD MOUNT VERNON SKAGIT 982739036 9/5/2014 4254058179 http://cannarex.net/
STICKY’S 413836 7831 NE HIGHWAY 99 VANCOUVER CLARK 986658836 9/8/2014 5099521602 None
MR. BILLS OF BUCKLEY 413980 29297 HWY 410 E STE D BUCKLEY PIERCE 983218482 9/12/2014 2533835855 http://www.mrbillsofbuckley.com/
GREENSIDE 414295 23407 PACIFIC HWY S DES MOINES KING 981988738 9/18/2014 2068786470 https://www.facebook.com/pages/Greenside-Recreational-Des-Moines/286093628240585
GREENLIGHT 415112 10309 E TRENT AVE MILLWOOD SPOKANE 992064514 9/18/2014 5093093193 http://greenlightspokane.com/
THE 3-M’S OF GRAYS HARBOR 415001 5675 STATE ROUTE 12 STE 1 ELMA GRAYS HARBOR 985410000 9/23/2014 3604709265 http://greenlightwashington.com/city/seattle/retail_store/the-3-ms-of-grays-harbor-llc/
OCEAN GREENS 413372 9724 AURORA AVE N SEATTLE KING 981033223 9/26/2014 2062299893 http://www.oceangreens420.com/
HWY 420 413843 1110 CHARLESTON BEACH RD W BREMERTON KITSAP 983124504 9/30/2014 3609323182 http://www.hwy420.xyz/
MJ’S POT SHOP 415314 1335 SE BISHOP BLVD PULLMAN WHITMAN 991636408 9/30/2014 5093325203 http://mjspotshoppullman.com/
DIAMOND GREEN 413374 4002 S 12TH ST TACOMA PIERCE 984051509 10/14/2014 2532225697 http://www.diamondgreentacoma.com/
GOLDEN DISPENSARIES 414292 650 LLAMA LN GOLDENDALE KLICKITAT 986209140 10/17/2014 5097730700 None
THE NOVEL TREE 414983 1817 130TH AVE NE SUITE B BELLEVUE KING 980052225 10/23/2014 3609301700 http://www.novel-tree.com/
CINDER 414817 1421 N MULLAN RD STE B SPOKANE VALLEY SPOKANE 992064051 10/23/2014 5092413726 None
THE GREEN DOOR 415410 28120 HWY 410 E UNIT A8 BUCKLEY PIERCE 983218482 10/24/2014 2532248299 None
LOCALAMSTER 414243 1006 CALIFORNIA WAY LONGVIEW COWLITZ 986321615 10/27/2014 2068760140 http://www.local-amster.com/
CANNABIS COUNTRY STORE 414970 1910 W MAIN ST SUITE 101 BATTLE GROUND CLARK 986040000 10/28/2014 3607987194 http://www.cannabiscountrystore.com/
CINDER 413940 7011 N DIVISION ST STE A SPOKANE SPOKANE 992083968 10/28/2014 5092413091 None
SATORI 414664 9301 N DIVISION ST STE B-C SPOKANE SPOKANE 992181254 10/29/2014 5099947051 None
THE BACK PORCH 415645 907 N WENATCHEE AVENUE STE B WENATCHEE CHELAN 985011572 10/29/2014 5096699160 None
2020 SOLUTIONS ON THE GUIDE 413314 5655 GUIDE MERIDIAN STE A BELLINGHAM WHATCOM 982269722 10/30/2014 3607342020 http://i502solutions.com/
KUSHMART 414520 6309 EVERGREEN WAY STE C EVERETT SNOHOMISH 982030000 10/30/2014 2067691282 http://www.kushmart99.com/
MR. DOOBEES 415206 2870 OCEAN AVE RAYMOND PACIFIC 985774926 10/30/2014 3608758016 https://www.facebook.com/pages/Mr-Doobees-Natural-High-Store/382047841953436
HAPPY TIME 414777 1301 N 2ND ST YAKIMA YAKIMA 989011801 10/30/2014 5094802097 None
THE HAPPY CROP SHOPPE 413481 50 ROCK ISLAND RD EAST WENATCHEE DOUGLAS 988025352 11/1/2014 5098881597 http://thehappycropshoppellc.com/
W.C.W. ENTERPRISES 415445 3708 MT BAKER HWY EVERSON WHATCOM 982470000 11/3/2014 4253127077 None
THE HIDDEN BUSH 412921 3230 E HWY 101 PORT ANGELES CLALLAM 983629073 11/4/2014 3604606641 https://www.facebook.com/TheHiddenBush
GANJA GODDESS 413558 3207 1ST AVE S UNIT A SEATTLE KING 981341819 11/7/2014 2066827220 http://www.ganjagoddessseattle.com/
CANNABIS & GLASS 415243 6620 N MARKET ST SUITE 100 SPOKANE SPOKANE 992177809 11/7/2014 5099991112 None
GREENSIDE 414296 10600 MAIN ST BELLEVUE KING 980045922 11/8/2014 2069103811 None
SPOKANE GREEN LEAF 413347 9107 N COUNTRY HOMES BLVD STEB SPOKANE SPOKANE 992182071 11/11/2014 5099193467 http://spokanegreenleaf.com/
THE STASH BOX 412494 3108 A ST SE STE F AUBURN KING 980028811 11/12/2014 2537970959 http://www.thestashboxllc.com/#!visit-us/c24vq
HERBAL E SCENTS 414902 545 C HWY 395 S COLVILLE STEVENS 991140000 11/14/2014 5096756901 https://www.facebook.com/pages/Herbal-E-EScents/1391912257773681
LA PUSH KUSH 413695 100 LA PUSH RD STE 602 FORKS CLALLAM 983319406 11/19/2014 5416109508 None
420 SPOT SHOP 414550 1374 SE LUND AVE PORT ORCHARD KITSAP 983665628 11/20/2014 3608765699 https://plus.google.com/106821460925309747546/about?gl=us&hl=en
GREEN COLLAR 412923 10422 PACIFIC AVE S STE B TACOMA PIERCE 984446052 11/20/2014 2532670675 None
PURPLE HAZE 414680 4218 RUCKER AVE EVERETT SNOHOMISH 982030000 11/24/2014 4252583054 None
GREENWAY MARIJUANA 413541 4851 GEIGER RD SE PORT ORCHARD KITSAP 983669350 11/24/2014 3602041119 http://greenwaymarijuana.us/
GREEN LIFE CANNABIS 414755 3012 GS CENTER RD STE A WENATCHEE CHELAN 988019116 11/27/2014 2817260614 http://www.greenlifecannabis.com/
UNCLE IKE’S 414533 2310 EAST UNION ST SEATTLE KING 981222966 12/1/2014 http://www.uncleikespotshop.com/
THE SLOW BURN 413773 4101 MAIN STREET UNION GAP YAKIMA 989032042 12/1/2014 5098234793 None
CANNABIS CENTRAL 415662 1516 WEST UNIVERSITY WAY ELLENSBURG KITTITAS 989260000 12/2/2014 5098335556 http://www.ellensburgapothecary.com/
STONEHENGE CANNABIS 415361 8142 HIGHWAY 14 LYLE KLICKITAT 986350000 12/3/2014 5097670039 https://plus.google.com/109331736796915623279/about?gl=us&hl=en
DOCKSIDE CANNABIS 414569 15001 AURORA AVE N STE 15029 SHORELINE KING 981336134 12/3/2014 2066186094 http://docksidecannabis.com/
GREEN STAR CANNABIS 410798 1403 N DIVISION ST STE A SPOKANE SPOKANE 992021810 12/3/2014 5099193398 http://www.greenstarcan.com/
DAVE’S PLACE 415202 10 MAPLE GROVE RD SUNNYSIDE YAKIMA 989440000 12/8/2014 5098300275 None
RAIN CITY CANNABIS 413803 11537 RAINIER AVE S SEATTLE KING 981783984 12/9/2014 2063210149 http://www.highaboveseattle.com/tag/rain-city-cannabis/
CANNABLYSS 415575 2705 HARTFORD DR STE A LAKE STEVENS SNOHOMISH 982589204 12/11/2014 4253277529 http://www.cannablysslakestevens.com/
ALTITUDE 414225 260 MERLOT DR PROSSER BENTON 993500000 12/11/2014 5097864200 http://altitudemj.com/
LUCID 414963 4820 YELM HWY SE SUITE D LACEY THURSTON 985033402 12/12/2014 5304010839 None
TREEHOUSE CLUB 413369 14421 E TRENT AVE SPOKANE VALLEY SPOKANE 992161392 12/12/2014 5094132169 http://www.treehouseclub.buzz/home.html
MARY’S FINEST MARIJUANA 415325 12230 AURORA AVE N STE B SEATTLE KING 981338033 12/15/2014 7862465027 None
GANJA VITA 415539 23441 NE STATE ROUTE 3 BELFAIR MASON 985280000 12/16/2014 2535143949 None
4:20 FRIENDLY 413586 1515 LEWIS ST SPOKANE SPOKANE 992249785 12/17/2014 5094990999 None
GREEN THEORY 414417 10697 MAIN ST STE B BELLEVUE KING 980040000 12/18/2014 4255027033 http://www.green-theory.com/
MARY JEAN’S GREENS INC. 412048 3204 MERIDIAN AVE E EDGEWOOD PIERCE 983722608 12/18/2014 2537356550 None
GREEN STOP 413801 7466 MT BAKER HWY MAPLE FALLS WHATCOM 982660000 12/18/2014 None
CROCKPOT 415229 1703 SE SEDGWICK RD STE 113 PORT ORCHARD KITSAP 983669599 12/18/2014 2533127280 https://www.facebook.com/crockpot420
420 HOLIDAY 415526 2028 10TH AVE LONGVIEW COWLITZ 986324007 12/20/2014 3607033103 http://www.420holidaydispensary.com/
THE HAPPY CROP SHOPPE 413600 5736 VALE RD CASHMERE CHELAN 988150000 12/24/2014 5096696835 http://thehappycropshoppellc.com/
GLOBODYNE 414982 3223 PINE ST EVERETT SNOHOMISH 982014536 12/24/2014 4258793437 None
MAIN STREET MARIJUANA 414876 2314 MAIN ST VANCOUVER CLARK 986602642 12/24/2014 4259745804 http://www.mainstmj.com/
HL SOUTH 415534 1944 1ST AVE S #100 SEATTLE KING 981341406 12/26/2014 2069728500 None
MARY MART 415037 3005 6TH AVE STE B TACOMA PIERCE 984066202 12/29/2014 None
RAINIER ON PINE 414723 3111 S PINE ST TACOMA PIERCE 984094711 12/29/2014 http://www.rainierwellnesscenter.com/
MARIJUANA MERCANTILE 415216 8411 SR 92 STE 6 GRANITE FALLS SNOHOMISH 982520000 12/30/2014 3603227122 None
SPOKANE’S GREEN DEPOT 414101 71 N RALPH ST STE 102 SPOKANE SPOKANE 992024826 12/30/2014 2532417773 None
NEW VANSTERDAM 413732 6515 E MILL PLAIN BLVD VANCOUVER CLARK 986617455 12/30/2014 3605974739 http://newvansterdam.com/
WESTSIDE420 RECREATIONAL 412466 4503 OCEAN BEACH HWY STE 103 LONGVIEW COWLITZ 986325055 12/31/2014 3604235261 http://www.westside420.com/
SMUGGLER BROTHERS 413762 1912 STATE ROUTE 20 SEDRO WOOLLEY SKAGIT 982840000 12/31/2014 3606473437 http://www.smugglerbrothers.com/
CASCADE KROPZ 413819 19129 SMOKEY POINT BLVD STE B ARLINGTON SNOHOMISH 982234258 1/1/2015 3606595422 http://www.cascadekropz.net/
GREEN LADY 415130 3044 PACIFIC AVE SE STE B OLYMPIA THURSTON 985012043 1/3/2015 5098697574 http://www.greenladymj.com/tag/recreational/
SEA CHANGE CANNABIS 353260 282332 HIGHWAY 101 STE 2 PORT TOWNSEND JEFFERSON 983688700 1/3/2015 2064228328 http://www.seachangecanna.biz/
CREATIVE RETAIL MANAGEMENT 414889 7046 PACIFIC AVE TACOMA PIERCE 984087219 1/3/2015 2536917293 http://www.hiwy7.com/home.html
A BUD & LEAF 413821 421 LILLY RD SE OLYMPIA THURSTON 985012108 1/5/2015 3608706000 None
THE TOP SHELF 414716 1305 S HAYFORD RD SPOKANE SPOKANE 992245276 1/5/2015 5099444350 http://www.topshelfcannabisbellingham.com/
BUD COMMANDER 413802 849 TROSPER RD SW STE 207 TUMWATER THURSTON 985128145 1/5/2015 3606881709 None
CASCADE HERB COMPANY 415094 1240 E MAPLE ST STE 103 BELLINGHAM WHATCOM 982250000 1/6/2015 3607782357 http://www.chcthc.com/
GREEN LEAF 413886 4220 MERIDIAN ST STE 102 BELLINGHAM WHATCOM 982269153 1/6/2015 3603032860 None
EVERGREEN CANNABIS 415064 922 PEACE PORTAL DR BLAINE WHATCOM 982304409 1/7/2015 3603328922 None
GREEN CITY COLLECTIVE 413737 13601 HIGHWAY 99 STE B EVERETT SNOHOMISH 982045496 1/7/2015 4258693670 http://www.gcc420wa.com/
SATIVA SISTERS 413739 10525 E TRENT AVE STE 1 SPOKANE SPOKANE 992060000 1/7/2015 2086603909 http://www.sativasisters.com/
CLEAR CHOICE CANNABIS 413358 8001 S HOSMER ST TACOMA PIERCE 984081017 1/9/2015 2534445444 http://www.clearchoiceglasstacoma.com/
HERB’S HOUSE 402039 716 NW 65TH ST SEATTLE KING 981175049 1/14/2015 2065577388 http://www.herbshouse.org/
HIGH END MARKET PLACE 413550 1906 BROADWAY VANCOUVER CLARK 986630000 1/14/2015 3606090364 http://highendmarketplace.com/
THE LOCAL JOINT 414539 5309 GUIDE MERIDIAN RD SUITE A BELLINGHAM WHATCOM 982260000 1/15/2015 3603063257 None
ISSAQUAH CANNABIS COMPANY 414867 230 NE JUNIPER ST ISSAQUAH KING 980270000 1/16/2015 2069492124 http://www.issaquahcannabiscompany.com/home/
RAINIER DOWNTOWN 415010 112 S 24TH ST TACOMA PIERCE 984022904 1/20/2015 4258020949 http://www.experiencerainier.com/#!the-rainier-family/c1ah4
GREEN OUTFITTERS LLC 413798 668 OCEAN SHORES BLVD NW OCEAN SHORES GRAYS HARBOR 985699344 1/21/2015 4252684391 None
PRAXA 414785 14343 15TH AVE NE STE A SEATTLE KING 981253162 1/22/2015 2066438576 None
EMERALD LEAVES 413363 2702 6TH AVE TACOMA PIERCE 984067213 1/22/2015 2063991361 None
BELMAR 415253 614 116TH AVE NE BELLEVUE KING 980045206 1/23/2015 4254535749 None
ROCKY MOUNTAIN HIGH 415115 6323 NE BOTHEL WAY KENMORE KING 980280000 1/28/2015 2066604722 None
THE HERBERY 084045 212 NE 164TH AVE STE 11 VANCOUVER CLARK 986840000 1/28/2015 3609490319 http://www.theherbery.info/
HIGH SOCIETY 413534 8630 S MARCH POINT RD ANACORTES SKAGIT 982213412 1/29/2015 3606610168 None

 

 

 

Retail Volume

Data from WSLCB document released to CASP on January 27, 2015

Harvest volume per month

Data from WSLCB harvest document released to CASP on January 27, 2015

Warning: this post contains calculations from data provided by the WSLCB, without contextual explanation for the December 2014 anomalous sales data; and without a clear definition for retail gram volumes given how difficult that is to include concentrates and edibles. The WSLCB has recently tightened their information provision services and informs me that I should have answers from them in a month or two.

by Dominic Corva, Executive Director

The seasonal glut deriving from fall harvest has a lot of I 502 producer/processors worried about how and when to sell built-up inventory. This post uses WSLCB spreadsheets released to CASP on January 27 to estimate current total market inventory, on the one hand, and retail sales data for projecting inventory clearance on the other. Since national media has decided to throw unsubstantiated, alarming numbers around, I have decided that it is necessary to provide the best educated guess I can based on actual data received from the WSLCB.

The graphs above depict the following information gathered in table form below. Let’s take them one at a time.

Retail Volume per lb Cumulative Total Monthly
July 174.52 174.52
August 517.62 343.10
September 1030.77 513.15
October 1737.89 707.12
November 2584.54 1553.77
December 2845.35 260.81

 

The retail volume data is clearly problematic. The first five months show healthy, even logarithmic growth in the volume of cannabis sold per month. November’s sales more than double October’s, with 1553.77 lbs sold. December’s data, on the other hand, return us to a volume sold that is less than the second month of I 502 retail volume. What should we make of this? On the one hand, we could guess that the way retail volume is calculated changed in December, casting the first five month’s data in doubt. On the other, we could guess that December’s data is off for some other reason. A third option would be to doubt all of the numbers provided.

If we select Option 1, however, we would be forced to project an totally unrealistic logarithmic jump in retail volume of unknown dimensions. Surely, December could not have been a 3,000 lb month. On the other hand, we could project more realistic growth or even at least volume maintenance, and we could pick a number for December that is anywhere from 1500 to 2000 lbs.

If we select Option 2, we might be able to say with a grain of confidence that at least 250 lbs per month had been sold prior to December and we could expect at least that much for January. If this were so, we would have started seeing major inventory build-up in October, but that doesn’t match what we qualitatively know about the market.

If we select Option 3, we have no leg to stand on and no further analysis is possible.

Realistically, Option 1 seems like the safest bet, with a possible accounting date flexibility that put a lot of December’s sales in November, which actually could be more anomalous than December given its huge jump. Let’s split the difference and suggest that if 1800 lbs were disposed of between the two months, and there is growth rather than stagnation, we could have had about 850 sold in November and 950 in December. At that rate, we expect about 1100 lbs to go in January, bringing cumulative sales to date at about 4000 lbs. That’s probably the best we can do right now, so for this post we’ll go with that number.

How much is that out of everything that has been produced?

Harvest Volume in lbs Cumulative Total Monthly
May 0.19 0.19
June 94.82 94.64
July 446.46 351.63
August 1475.72 1029.26
September 3431.60 1955.88
October 10936.10 7504.50
November 25295.07 14358.97

 

This data lacks December, which is a big problem especially since it’s uncertain how much of the fall harvest was recorded by November 11, and how much of it will be recorded for December 11. A liberal¬†approach might take September’s harvest as a baseline for indoor production, although my guess would be less given the light dep crops contributed to the September number. This is where we get into almost SWAG (Scientific Wild-Ass Guess) territory, so please feel free to assign different numbers than the ones I pick, which is 2000 lbs for December and 1000 lbs for January. That would give us approximately 28,000 lbs harvested to date — about 4000 of which have been sold.

The Bottom Line

If the above calculations are in the ballpark, that leaves 24,000 lbs of inventory. ¬†That’s a lot! But, it’s important to understand that at least half of all the cannabis harvested should have been trim and shake, and thus don’t really count the same in terms of inventory. Half that — 12,000 lbs —¬†should count as flower and thus reflect farmgate flower prices. The other half should count as raw material for processing. That includes pre-rolled joints, which are usually not derived from bud. The rest of it is processed into concentrates which are then either further processed into edibles, or sold as concentrates. Right now, it appears that edibles and pre-rolled joints are where most of it is going.

One problem that this poses is, what is the comparison between pre-rolled joints and flowers, in terms of wholesale price per weight? It is entirely possible that pre-rolled joints are being sold at a price per gram that is a little too close to the price per gram of bud flowers, even taking into account the value added by rolling and packaging. It is also entirely possible that this is pure conjecture with so little available information.

But let’s think about that 12,000 lb number. If inventory is around 12,000 lbs, and the retail volume trajectory has us at around 1100 lbs per month right now, with expected growth at about 300 lbs per month, that’s still a serious problem that won’t necessarily clear up this summer as I have previously suggested — especially given the possibility that 1100 lbs per month is about our indoor production volume.

The bottom line is this: we need more processors and retailers to come on line, and fast. I hope the WSLCB understands this, because if we don’t achieve solid growth in those areas of the market then we will not get the summer farmgate price rise that we have been projecting and a whole lot of people will be put out of business. I also hope the legislature understands this, because something needs to be done pronto about bans and moratoria that represent firm ceilings on how many retail stores can open, on the one hand, and how punitive tax structures render the I 502 system unable to capture “recreational” consumers.

It is a bad sign, however, that the WSLCB cannot provide up to date information. This data should be at their fingertips so they can optimize their decision-making capacity. I am afraid that perhaps it is not.