Continuity, Discontinuity, and Contingency between Legal and Medical

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July 2014 map by Steve Hyde, of then-pending Legal retailers and advertised Seattle Medical access points

by Dominic Corva, Social Science Research Director

Legal Cannabis Phase I, for our interview subjects, overlapped with another State legal regime, Initiative 75, which was codified as RCW 69.51.A in 1998. Washington State medical cannabis laws were first passed by citizen initiative in 1998 and amended legislatively multiple times until 2011. The 2011 amendment, SB 5073, was a legislative bill requiring the State to regulate and tax commercial medical cannabis. It was the culmination of over a decade of then-Senator Jeanne Kohl-Welles collaboration with Washington State medical cannabis patients and stakeholders. Those efforts continued for four years, until SB 5052 swallowed them up by folding medical cannabis regulation into the I 502 framework in 2015. First, let’s clarify this timeline, and then let’s discuss how this is relevant to our study of Legal Cannabis Phase I.

The timeline goes something like this.

  1. Medical Phase I: 1998- April, 2011. Key legal framework: affirmative defense for possession; evolving criteria for authorizations; and evolving plant counts.
  1. Medical Phase II: April 29, 2011 — July 1, 2016. Key legal framework change: commercialization tolerated in policy, especially in Seattle and King County, via a noncommercial clause, “collective gardens.”
  1. Legal Phase I: I 502 (December 2012/13 — April 28, 2015/July 1, 2016). Key legal framework: an explicitly non-medical system regulated by the WSLCB.
  1. Legal Phase II: July 1, 2016- .  Key legal framework: a single integrated medical and non-medical system regulated by the WSLCB, plus other reforms to the 502 law. 

      5. Overlap: April 28, 2015-July 1, 2016. Medical Phase II and Legal Phase I co-exist.

This timeline could easily be broken up further. For instance, the 2008 liberalization of authorization authority had a significant impact on the availability of authorized consumers for access points. And the 2011 legislative vehicle was the first of Senator Kohl-Welles’ reform efforts that sought to regulate patient access, rather than improve patient access. Between 2008 and 2011, something or some things happened to centralize legal reform efforts away from “more cannabis and more patients” to “discipline unruly State cannabis markets.” This is the subject of another book or chapter, however.

Instead, we want to understand the dynamics of Medical policy and markets as continuous and parallel to the dynamics of Legal policy and markets. And to do that, we have to unpack the evolution of both processes in relation to and separate from each other. We want to use Medical Phase I to break up and analyze Legal Phase I as the upstart — or start-up — framework with messy and unanticipated dynamics, not a homogenous legal time in which one thing logically followed another until it was time for Legal Phase II in Washington State.

In fact, the reason they evolved separately had less to do with the passage of I 502 than the way the WSLCB chose to implement it. And the way they chose to implement it was to create a completely different system rather than to use State Medical markets as a foundation. This is probably the defining characteristic of the “Washington model,” since no other state has chosen to do it that way.

The WSLCB took about 10 months to go from figuring out what cannabis was at the most basic level to implementing a “starting from scratch” model. For the first six months or so, that process was dominated by public and private meetings across the state so the Board could learn from existing cannabis market stakeholders a few things about the commodity they were charged with regulating. Starting in about April 2013, that process overlapped with a more academic exercise, in which BOTEC was contracted to estimate the size of the cannabis market, its potential environmental impacts, and so forth.

By the fall of 2013, the WSLCB had decided on a course of action that may or may not have been understood by the bureaucracy itself as a model for starting from scratch. There would be a one month window for applications, some time to process producer and processor applications, and then a lottery for retail applications, then some time to process those, and then by June 2014 Legal Phase I would open for business. This is a well-known timeline, but we emphasize two things about it that are poorly understood.

First, the applicant pool was much larger and different from what the WSLCB expected. Instead of a few hundred experienced applicants, they received a few thousand applications, many of whom were “gaming the system” by forging real estate claims and creating rings of applicants from friends, family, or straight up business associates to maximize their odds in the retail lottery or gain control of more canopy than they could otherwise.

And second, applicants to the 502 system were applying to a system that was legally forbidden from making any medical or therapeutic claims about cannabis. Although some of our interview subjects anticipated that this would change, it was a great disincentive to existing Medical Cannabis stakeholders against joining the I 502 system. This applies especially to retail access points, whose products and customer base revolved centrally around making those claims. But it also applies to producers and processors, since medical markets themselves continued to evolve away from simply growing high THC sinsemilla flower, towards CBD-rich cultivars, extracts, and edibles of much greater potency and diversity than would appeal to “recreational” consumers in the new system.

The takeaway for this post is that while the WSLCB may or may not have intended to “start from scratch” with I 502 stakeholders that were overwhelmingly new to cannabis, that’s how it worked out. This is most clear for the retail side of things, in which the lottery system could have by chance favored existing Medical Cannabis access points, but the odds were pretty slim given the amount of applicants and the way they gamed the system.

This is how it shook out for our interviewees. One of them “won” a lottery position outright, but was derailed repeatedly over real estate and business partnership issues. One of them acquired a Shoreline lottery position very early, and once a few of the winning lottery positions failed to take advantage, had their Seattle number come up. They have a Sodo location now. Two others drew extremely low lottery numbers whose numbers never came up. And one did not apply at all, figuring that the two systems would remain separate given that the 502 system was not allowed to be medical in any way. We will address who these are, and how this process shook out, in the book.

Introducing the book in progress: Why Medical Transitioners?

Photo by Lisa Buchanon. Dr. Corva presenting at the Alliance May 12, 2016, at the Swedish Cultural Center, Seattle, WA.
Photo by Lisa Buchanon.
Dr. Corva presenting at the Alliance May 12, 2016, at the Swedish Cultural Center, Seattle, WA.

by Dominic Corva, Social Science Research Director

Last Thursday, Dr. Corva gave CASP’s first public presentation of our book-in-progress, “Washington State Legalization Phase I: An Ethnographic Report from the Perspective of Medical Transitioners.” We will be rolling out pieces of it on this blog through August, and this post introduces the book by explaining up front why we focus on stories of Medical Transition.

The unique value of the book project is its focus on the experiences of Medical Cannabis Transitioners, people and businesses that established livelihood identities as Medical Cannabis stakeholders before deciding to become Legal Cannabis stakeholders. For most, this means becoming a business licensed under the I 502 system. We have conducted 18 in-depth interviews ranging from one to seven hours long, since February. These interviews were transcribed, coded, and we are now in the process of writing four chapters. I’ll talk about those in a moment.

The choice to focus on Medical Transitioners is a calculated one. Here is a short list of reasons, in no particular order, which when put together make a powerful argument for the relevance and salience of this approach.

  1. Our interest in cannabis legalization is continuous with our interest in the historical arc of cannabis policy reform. Law and Policy reforms have built on one another over time, and formal legalization is but the next step in a process whose social dynamics require past progress. No single entity or moment can claim singular responsibility for legalization: it’s the outcome of a social movement, not a campaign that breaks radically with the past. Transitioner stories make this abundantly clear.
  2. Our interest in successful transitioners excludes both non-transitioners and new market actors. These two groups deserve careful study and research, but given the infancy of our State Legal Cannabis policy experiment we find that official efforts (such as the annual WSIPP report) focus almost exclusively on I 502 as a New Market/Policy; and that State actors are indifferent-to-hostile to non-transitioner stakeholders. Transitioner stories help us identify what kinds of knowledge are or can be transitioned into the new system.
  3. Transition knowledge comes from a fundamentally different cultural reality than New Market and Policy knowledge. Transitioner culture is post-prohibition in that it proceeds from civil disobedience to Federal Prohibition, from medical and underground cannabis values in which the plant is not, fundamentally, a threat to society. New Market and Policy culture remains tied to the “social threat” meaning of cannabis in a lot of ways, but chiefly through compliance with the Federal Cole Memo.
  4. There is a fundamentally practical side to examining Transitioner knowledge, since these are the people have far more experience with the plant, its markets, its cultural identities, and even the practice of regulatory compliance with local and State officials than New Market actors. They are the ones who have worked with policymakers and the public to get open as licensed businesses in the absence of central licensing law and policy. They have developed relationships with their communities, police, fire inspectors, and City and County officials, in a way that New Market actors have not. They have developed an organic local legitimacy necessary for sustainable businesses, and translated that legitimacy to the state by becoming licensed I 502 businesses.
  5. The system needs them, therefore — needs that experience and knowledge that comes from creating social trust in the absence of State endorsement. It’s clear that State endorsement doesn’t lead to social trust, necessarily, as evidenced by the Bans and Moratoria that make our State Policy experiment a rather uneven one, geographically. The knowledge about he plant is vital, too, as evidenced by SB 5052’s intention to “protect” medical access through the I 502 system past July 1. The recreational system was literally not allowed to make any kind of claims about cannabis as medicine for Phase I, and desperately needs stakeholders with experience and knowledge of cannabis as medicine to comply with SB 5052’s mandate.
  6. Transitioners have a nuanced critique of our State Policy experiment that is necessary for a robust understanding of not just the outcomes of our State Policy experiment, but the process of designing it. Annual WSIPP reports will provide fantastic information on the results of the experiment, but they’ll never provide a productive and transparent critique of its design and administration. “Productive critique” here does not mean criticism, it means analysis of the power relationships that steer the ship, to mix metaphors, in the direction it says it wants to go: away from prohibition. Transitioners aren’t hamstrung by prohibition culture, so they don’t have to discipline what they say to reflect the Cole Memo’s prohibition values.
  7. Finally, CASP as an organization has spent most of its research efforts on Medical Cannabis organizers and organization. Thus, this ethnography is the outcome of three years in the field for Dr. Corva and Dr. Sexton, not just 18 processed ethnographic interviews. The legitimacy of the interviews as a basis for research reports rests on this fieldwork “embeddedness”: we knew what questions to ask because we were there and often part of it. There is a “participant-observation” aspect to this ethnography, which in the social sciences comes with its strengths and weaknesses. We will address those at length in the methodology section of the book.

This is the first in what should be a summer-long release of different parts of the book as we fill out the chapters from the interview evidence collected. We hope to have a full draft done by August 1, 2016. Our next post will focus on the structure and process of the book, which is more the production of a collaborative research network than any single author. For now, let’s acknowledge authoring collaborators — later we will acknowledge our interview subjects themselves. Our interns are Hillary Bernhardt and Paul Jamison; Dr. Michelle Sexton and Brad Douglass of the Wercshop are primary contributors to the Lab chapter so far, but Dr. Jim MacRae will be getting his crack at it once Brad sends us his comments; Dr. MacRae is also a substantive contributor to the Producer/Processor chapter. And of course Dr. Corva is cat-herder in chief of the project.

A Brief Review of CASP and introduction to CASP 4.0

by Dr. Dominic Corva, Social Science Research Director

This post reviews the evolution of our nonprofit think tank since we earned our own 501(c)(3) Federal designation last July, after being fiscally sponsored by Americans for Safe Access Foundation (ASAF) between Fall 2013 and July 2015.

Since founding the organization in May 2013, we have gone through three major organizational structures, all part of bootstrapping an idea about a nonprofit service into an actual, functioning think tank with a focused identity. Since January 2016, we have been busy nailing down that sustainable identity, which you can read about in our new About page. The web site itself is a bit behind, but we will gradually catch up as bandwidth permits. The constant process throughout this time was Dr. Corva’s ethnography of cannabis agriculture especially as it relates to legalization in Washington state, where the Center is centered; and Dr. Sexton’s ongoing academic research and presentation to many national and global audiences especially the International Cannabinoid Research Society.

CASP 1.0 was the rough draft, the seed from which our possibilities could be assessed for further selection. Primarily, it was comprised of Dr. Michelle Sexton, myself, and Dr. Sunil Aggarwal as founding Board members, meeting a few times a month on Google Hangout and exchanging information about the field as we saw it opening up amongst us. Dr. Sexton had a particular vantage point as a state subcontractor on cannabis rule development before and during this period; Dr. Aggarwal was finishing his NYU residency and had a more East Coast and global perspective on developments. And Dr. Corva’s perspective was informed especially by his then three-year ethnographic project on policing cannabis agriculture in Humboldt County, California. For this period, our main focus was on learning the new landscape, especially in Washington State.

CASP 2.0 overlapped with 1.0 to a degree, as it emerged from our fiscal sponsorship agreement with ASAF in Fall 2013. During this period, a melange of volunteer energy pulled CASP in many different directions, depending on what the volunteers wanted to do. This was a period in which, absent resources, we discovered and engaged community development interests to sharpen our understanding of the embryonic field. This period concluded in late spring 2014, when Dr. Aggarwal accepted his NIH fellowship and officially took leave of the organization with our best wishes. At that time we took stock of our network and composed a Board to help develop the organization. Dr. Sexton remained on the Board, but for this period served a similar role to other Board members, as a real economy portal into the State’s accredited lab industry. The other Board members for this time period were Naz Victoria, I 502 producer/processor and drug war POW; Don E. Wirtschafter, lawyer, I 502 prospective applicant, museum founder, general cannabis history participant OG; Aaron Varney, Dockside Co-op (medical and I 502 retail); Joy Beckerman, Hemp Goddess, Woman of Weed, and general cannabis history participant OG; and Rachel Kurtz, I 502 business lawyer and Washington State cannabis organizer and drug policy activist OG. Locally, during this time period Dr. Corva was especially engaged in the Health Before Happy Hour legislative campaign (spring 2014); from which he developed a steady working relationship with the Coalition for Cannabis Standards and Ethics (CCSE, a nonprofit industry self-regulation group); the Washington Cannabis Commission Project (Oct 2014-present); and continues to serve a think tank function with the Cannabis Alliance, a recent integration of CCSE with three other industry standards group. There were lots of talks delivered and meetings held along the way.

In California, Dr. Corva was invited to serve as a cannabis agriculture and policy expert and observer for California Cannabis Voice Humboldt’s explosive and often controversial ordinance development campaign, which was ultimately successful as a County Supervisor-finished process. This meant not just regular visits but formal accompaniment for two CA State official tours of cannabis farms: the first Lt. Governor Gavin Newsom in the spring of 2015, and not long after the CA Board of Equalization (or half of it — Fiona Ma and George Runner).

California Board of Equalization crew, featuring Fiona Ma, at the end of the Light Dep tunnel on the Tour.
California Board of Equalization crew, featuring Fiona Ma, at the end of a Light Dep tunnel on the Tour.
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Ma and Runner visit Wonderland Nursery

At the same time, I served on the informal board of the Humboldt and Mendocino Marijuana Advocacy Project (HUMMAP), a coalition of heritage farmers drawn mostly from the ranks of the back-to-the-land movement that pioneered the domestication of sinsemilla cannabis agriculture — and were the first subjects of its policing — in the United States.

CBD-rich breeding pioneer Lawrence Ringo, may he rest in peace, was a HUMMAP member.
CBD-rich breeding pioneer Lawrence Ringo, may he rest in peace, was a HUMMAP member.
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Christopher Larson, Lawrence Ringo’s partner in Lost Coast Botanicals, was also a HUMMAP member.

These old timers were some of the first people I met and interviewed in Humboldt County; and they also served as CCVH’s main foil during the ordinance push. Their general opposition to the ordinance process was grounded in the feeling that it was insufficiently attentive to the needs of truly small Humboldt back-to-the-land heritage farmers. I saw this as an opportunity to develop and bridge community dialogue, but left he Board of HUMMAP when the decision to litigate the ordinance was made, as I could not be party to formal legal proceedings that pit some of my friends against others. I did try to mediate by providing clear information to both sides up to that time.

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Kevin Jodrey and Reverend Jeff Cannabis talk terpenes and the market at the Terpestival.
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Ganjapreneur content producer and Vashon Island community organizer Shango Los in the audience at the 2015 Original Terpestival.

CASP 3.0 began in July, 2013. This was the month we put on our first popular education fundraiser, the Original Terpestival, which changed our outlook on what was possible both for the focused mission of our think tank and for our annual budget. The event featured Dr. Ethan Russo, the world’s foremost cannabinoid and terpene scholar as well as Vashon Island resident, as its keynote lecturer. The science of terpenes is a significant resource of industry development, both medical and recreational, and the terpene-focused Cup was the first of its kind. The overwhelming show of support from industry for learning real science was incredible, and we raised over $7,000 due to sponsorships and the donation of testing by the Wercshop.

This pulled us out of a serious budgetary hole, almost; and proved the concept of popular education could be practiced through events that combined public and private interest in an uncontroversial fashion. Board members Joy Beckerman, Aaron Varney, and Michelle Sexton were especially key to the event’s success, with special credit to Joy. By then Rachel had moved to Oregon; Don had concluded his I 502 efforts; and Naz was spending most of his time concluding his business interests in his home state of Pennsylvania until the I 502 market matured enough to be worth getting into as a processor.

During all iterations, Dr. Corva continued his work in California and Washington, without much concern for documenting and promoting what he was doing. Until we have resources to do this, Google will have to suffice. These included a paid trip to Berlin for a cannabis legalization conference keynoted by the mayor of the city; Seattle Town Hall appearances; Seattle Hempfest panel moderation, participation, and organization, and many others. I was particularly active as a public intellectual and scholar around issues pertaining to the political economy of cannabis agriculture and policing. Dr. Sexton was also extremely active as a public intellectual and scholar, especially around the subject and practice of cannabis as herbal medicine.

CASP 3.0 provided two major developments. First, Dr. Sexton’s permanent relocation to San Diego and full time commitment to full-time research (rather than running an industry lab) opened up considerable possibilities and focus for organizational restructure. This move has been especially facilitated by her work consulting for other States as they develop new medical and legal regulations.

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Dr. Sexton in Humboldt with Heritage Women Growers after the 2015 Emerald Cup
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Dr. Sexton with her fellow contributors to the American Herbal Pharmacopeia, taken at the 2015 ICRS conference in Italy.
Dr. Sexton presenting at the 2015 Emerald Cup in Santa Rosa, CA.
Dr. Sexton presenting at the 2015 Emerald Cup in Santa Rosa, CA.

Second, Dr. Corva was enlisted at the last minute to teach two courses at the University of Washington in Fall 2015, which actually substitute-paid his salary for the year. This completed our return from budget impossibility, and fulfilled CASP’s mission to provide public sector education. It was a one-off thing, great for the organization financially but difficult to reconcile with continued organizational development. For Winter 2016, Dr. Corva was engaged even before the Fall appointment to teach “Cannabis, Law and Social Change” for the University of Washington’s Evening Degree Program. This was much more in-line with CASP organizational development, and was a sequel to a similar course developed in graduate school with Dr. Aggarwal in 2008. That 2008 class received an award from the College of Social Sciences, and we were delighted to get a second crack in an even more relevant and rich state context. Unfortunately, the University has decided to close down the Evening Degree Program in favor of online classes, and so it is unlikely to happen again unless championed as a regular day class by a tenured faculty member in a Social Science Department. And that is also quite unlikely, for many reasons. The availability of salary from that class for the first quarter of the year opened things up, however, to the engagement of two interns for a four month project. We are halfway through a book about Phase I of Washington legalization (I 502-5052).

CASP 4.0 has a razor-sharp, minimal-financial-overhead focus. Our goal is to finally be able to produce journal articles, chapters, and books based upon our experience in a field that, in practice, stretches from Washington to San Diego, California, where Dr. Sexton is setting up shop as CASP South. For this period, Dr. Sexton and Dr. Corva will serve as co-Research Directors (he’s Social Science, she’s Medicine) and share Executive Director responsibilities as they are needed. This organization will not go out of our way seeking large donors, because we don’t need them and don’t need Big Money Agendas driving our research agendas. See our new About section for more!

We are also pleased to have Dr. Aggarwal and his partner, Dr. Tapoja Chaudhuri, informally back in the circle as they have moved back to Seattle and are exploring research development opportunities. This period will see us further develop our Board, given that it has already been geographically and otherwise dispersed. Dr. Corva is looking for more community-oriented local portals to the real economy, now that Aaron Varney is the only full-time local Board member; and Dr. Sexton will be developing Board members that can support her needs as a medical cannabis researcher in California.

One final note: we have recently signed our event planner and are now producing the second Original Terpestival, a collaboration with Project CBD, in Hopland, California.

Martin Lee of Project CBD is third to the right; co-collaborator Jerry Whiting of LeBlanc CNE second to the right; and medical cannabis documentarian Michael Scott is fourth to the right. This picture was taken after Martin's guest lecture to Dr. Corva's Cannabis, Law and Social Change class Winter 2016.
Martin Lee of Project CBD is third to the right; co-collaborator Jerry Whiting of LeBlanc CNE second to the right; and medical cannabis documentarian Michael Scott is fourth to the right. This picture was taken after Martin’s guest lecture to Dr. Corva’s Cannabis, Law and Social Change class Winter 2016.

This is both a great opportunity to collaborate with a trailblazing cannabis knowledge nonprofit, and the outcome of Washington State’s criminalization of cannabis events at the end of the 2015 legislative session (this takes effect July 1, 2016, but was in law for our first iteration).

In the meantime, you can look forward to more consistent updates on this web site now that Dr. Corva’s teaching responsibilities are on indefinite hiatus. Also, don’t forget to follow our Facebook page, which has served pretty well as a micro-blog and newsfeed this whole time — we have over 2,000 likes now.

This should bring the public up to speed on our organizational fine-tuning. We are excited about this phase, which clearly defines what we do and how we do it, because the field has developed well enough for us to understand how to provide unique and focused content while maintaining our general mission of public and policymaker education.

Call for Help from WA Medical Cannabis Access Points

Estimating the medical cannabis market for the WSLCB:

Left to right: CASP Board member Don E. Wirtschafter, esq; Don Skakie; Reverend Jeff Church; NORML President Kevin Oliver; Medical Cannabis Producer Shawn DeNae; and Dr. Corva. Panel from 2014 Seattle Hempfest Hemposium.

Photo by Steve Hyde

by Dr. Dominic Corva, Executive Director

CASP requests assistance from all Washington State Medical Cannabis Access Points! We have been contracted by BOTEC to help develop and administer an anonymous, 10-question survey to this part of the medical cannabis industry. The surveys will be aggregated and run through a BOTEC-developed econometric model to estimate the size of Washington’s medical marijuana retail market. The results will be presented to the Washington State Liquor Control Board, who will then use the results to make big decisions about the new 502 retail window and the issuance of medical “endorsements.”

In addition to being anonymous, a further step has been taken to insulate the information providers from identification. We have received a letter from the WSLCB stating that they will not have access to the raw data. It is available here: BOTEC – Letter on behalf of LCB – FINAL.

In the interest of transparency, I am fully aware that our information network is being used in exchange for money. I have two observations about that: our network tends toward the collaborative side, and it’s tough to ask people for money just because. The value of our community’s interest in knowledge-based policy makes this a public service, not just a policymaker service.

This contract breaks new ground for CASP, and we are humbled to be invited to steward the production of useful knowledge. The better informed policy is, the better the policy is. We make no grand claims about this knowledge: it will have to be refined and undoubtedly will be used for many purposes.  We only claim that it will be better for your participation.

If you are an access point owner in Washington State, please contact Dr. Corva at dominic@caspcenter.org to receive the survey and answer any questions.

Thank you very much for your time and consideration. We hope to hear from you soon! We have a small window of time to do this, as the LCB will need processed results in just a few weeks.

 

State Building Code Leans Away from Smaller Rural Cannabis Farmers

by Dominic Corva, Executive Director
As a political geographer, I understand the core policy and market geography of I 502 cannabis to be shaped by the intersection of Public and Private Real Estate interests. Not WSLCB approval, not taxes, not medical access points, not legislative “fixes” for I 502. The main Public Real Estate interest at stake here is Land Use Governance, which is shaped by Zoning and Building Code rules and regulations.
The latest struggle for inclusionary I 502 policy in that regard is the Washington State’s Building Code Council’s efforts to impose F1 Industrial (ie, Urban Warehouse) building standards on I 502 production and processing that is now and will in the future primarily be Rural and Agricultural.
The first collective efforts to change this are emerging, not surprisingly, by I 502 producer and community organizer Crystal Oliver on the I 502 google group. She has posted her letter  to the Washington State Building Code Council on the group for others to adapt and send. Her fellow community organizer Jamie Curtismith has responded with complementary guidance in support of Crystal’s call.
I reproduce these letters below in support of “Agriculturalizing” Cannabis Policy in Washington State. It’s a great example of the need to consider Cannabis as Social Policy, in this case on behalf of the need for Agricultural rather than Industrial Land Governance.
by Crystal Oliver, Washington’s Finest Cannabis
Dear Washington State Building Code Council,
I am contacting you to voice my opposition of building code proposal IBC 15-035 and my disappointment that this proposal is being considered without a financial impact assessment being completed as it will adversely impact my small business.
My husband & I own and operate a legal WSLCB licensed marijuana farm in Spokane county. We presently grow our cannabis underneath the sun in the soil of our 10 acre farm.  We are coming up on our first year in business and are working busily in the field ourselves from sunrise to sunset hoping for a good harvest this fall so we can pay our mortgage, electricity, keep working for ourselves, provide a few jobs to others in Spokane county, and continue supporting our local community through our commitment to buying supplies and materials from other small local businesses. We had hoped to save up enough this year to install a few greenhouses next year purchased from a local supplier.
Proposal IBC 15-035 will have an extremely profound economic impact on my small business, other small businesses in the area, and quite possibly the future of this new industry and the potential tax revenues the State of Washington hopes to collect.
F1 building code requirements, require fire flow, fire flow generally requires the existence of a municipal water district.  My rural lot, surrounded by farms does not have access to a municipal water supply.
The green house operation that we are dreaming of is far simpler than the greenhouses of my fellow farmers down the road who raise leaf lettuce, tomatoes, and petunias who don’t abide by F1 building codes.  It is extremely unfair to apply more restrictive zoning to the production of marijuana than the production of other plants and vegetables.
This proposal also suggests that processing of marijuana sometimes involves the use of hazardous materials and lists this as reason to prevent farmers from operating on rural properties, however, Spokane County Building & Planning department, in cooperation with our County Commissioners came up with a solution to that.  They permit only limited processing outside Industrial areas.  There are no hazardous materials in use at my processing facility, I simply hand trim the cannabis flowers from my plants, separating the flower from leaf and stem and place them in bags and jars for sale at the retail store.  Spokane County allowed for limited processing to protect the small marijuana farmers in our county who are operating on rural properties.
This proposal, if adopted would prevent small, family farmers, in rural communities from being able to join, compete in, and thrive in this brand new and highly lucrative industry.
Over 20% of the marijuana producers and processors currently licensed by the WSLCB reside in Spokane County.  Many of us are on rural lots where we cannot meet F1 building standards.  A proposal that negatively impacts that large of a portion of this new industry will have a significant impact on sales and tax revenues collected by the state of Washington.
I urge you to decline this proposal as the economic impact that it will have on many small business owners in rural areas throughout the state is too significant to ignore.
Highest Regards,
Crystal Oliver
Managing Member
Washington’s Finest Cannabis

 

by Jamie Curtismith

F1 code compliance is yet another in a long line of strategies to get marijuana operations off rural lands. In Snohomish County, our building inspector (who also happens to be our Fire Marshall) had an ‘IBC interpretation’ that mandated operators to upgrade to these rigorous standards on non-public buildings, which industrializes otherwise straightforward agricultural-use buildings, making them truly manufacturing facilities (not agriculture) and therefore, not allowed in many rural zones. He claimed that his use of F1 had nothing to do with cannabis and more to do with building type, but his application of code became inconsistent and arbitrary as the industry came online and he began to realize the variety of barns, pole buildings, and rigid greenhouses being used.  Of course, the real problem is (other than the expense involved), is that several of the F1 requirements, as Crystal pointed out, are impossible to comply with (and therefore are a defacto ban) because many rural parcels lack the necessary services (power, water, emergency services…etc) to support “industrial use”. Some rural zones allow for manufacturing/industrial, for example, we have a rural light industrial (R1) zone where F1 Buildings would be acceptable, but it is only 0.00013% of the county (or 182 acres) and hasn’t had a parcel available for a few decades!

Caution: When arguing code compliance (IBC) try to avoid muddling the argument with zone compliance. From a building inspectors perspective, they don’t care (or have control over) where the industry is zoned. That is the responsibility of the Local Council. Inspectors only care about the types of buildings used for the purpose of the businesses operating in them. An inspectors job is pretty straight forward; inspect a building and apply IBC. One of the challenges that the marijuana industry has posed to building inspectors is our unrelenting creativity and resourcefulness. The facilities where some grow operations take place have been the most innovative utilizations that most inspectors have ever investigated (cargo containers, converted prefabs, MHUs, storage pods…etc) so there has been a tremendous amount of room for code interpretation around our usage. Not having been officially declared an agricultural crop (and awarded Right to Farm protections), we are viewed as manufacturing, so they are interpreting code accordingly (industrialization). That is why it is IMPERATIVE to get cannabis declared as an agricultural crop, which again, the state building council has nothing to do with, but it doesn’t hurt to keep arguing the ‘cannabis as an agricultural crop’ logic.

Also, many inspectors (and especially Fire Marshals) are still completely oblivious to our processing needs, and still have exploding butane canisters in their minds when they hear the words ‘cannabis extraction’. Most local municipalities have not figured out that processing-only licenses are not tiered, and not all will be extracting, but I don’t think that will stop reefer mad councils from implementing heavy handed measures on them.

Bottomline: This fight is happening on many fronts, among many regulatory authorities simultaneously, and we need all hands on deck to get Cannabis Sativa recognized as an agricultural commodity and get it regulated accordingly, so that ALL producer processors will be protected, not just small and rural growers.

 

Jamie Curtismith

206-491-3802

curti…@hotmail.com

Southern Humboldt’s Kerry Reynolds Recent Interview with Dr. Corva (With Transcript)

 

by Dominic Corva, Executive Director

TRANSCRIPT BELOW

“Dr. Dominic Corva of the Seattle-based think tank Cannabis and Social Policy recently visited Southern Humboldt and talked with CCN’s Kerry Reynolds about lessons for California in legalization trends in Washington and Oregon.”

This is Cannabis Consciousness News produced at Redwood Community Radio in Redway, California.  I am Kerry Reynolds reporting for CCN.

 

Kerry: This is Kerry Reynolds with CCN.  I’m here with Dr.  Dominic Corva of the Cannabis and Social Policy Center, based in Seattle, Washington, correct?

 

Dominic: That’s correct.

 

Kerry: In terms of enforcement in cracking down on the black market, trying to pursued people into the above-the-ground market, are there any things you are seeing in Washington, in terms of cracking down more on the black market?

 

Dominic: So, you know, the black market needs to be defined, right?  We all assume we know sort of what the black market is but it’s also a term that gets used pejoratively to identify like mad people, as opposed to — the black market, you know, technically is, you know, the informal market essentially like un-taxed, un-regulated market.  So, the main thing you know in Washington that I suppose could be learned is that you really need to make sure that you’ve got plenty of retail outlets.  That is — you can have all of the best intentions and all the best designs for permitting growers but if their product doesn’t have a place to go, if there is a bottleneck because there is not enough retail stores then, you know, like you are looking at diversion from a, you know, regulated system.

 

Kerry: Yeah, then it’s going to be filled out at someone’s apartment.

 

Dominic: Yeah, so that’s — the distribution question needs to be worked out and whether that means necessarily like, you know, opening up retail permitting or coming up with farmer-to-consumer distribution, there are lot of different ways to I think create pathways to market from the field and California should consider all of them _____1:50 basically because it grows way more than California consumes and in that way it’s like Oregon, but on a much bigger scale, although I’m not sure how much bigger scale these days Oregon is.  There is a whole bunch of Californians in Oregon that are applying the lessons that they have learned.

 

Kerry: So, things are blowing up basically?

 

Dominic: Things are blowing up in Oregon.  You know, Oregon’s got the cheapest cannabis in the country now according to the latest map that came out of Cannabis Prices, and, you know, historically that’s the indicator of like, you know, where most of it’s coming from.  Of course, Oregon being right next to Northern California, it’s really — they should break it by county because it won’t be the whole state that will be cheaper.  It will be like, you know, that zone from the Bay area up to — that’s really, you know, a cannabis growing region that’s continuous.

 

In terms of certifying, you know, gardens as, you know, they have got their water permit and so forth, you know, the question is that, okay, let’s do that so that you know, we can get the environmental stewardship going, but on the other hand if you try to apply like a seed-to-sale tracking system in this area, you are throwing it all out the window because there is just too much products and it needs to go somewhere and they can’t all go into California, they just can’t; it’s not mathematically possible.  I think it should be interesting to see how that aspect of formalization happens in this area where, you know, attempts to shove people into a box that really like, you know, makes their lives too difficult and makes them not want to participate, gets kind of back to its first problem, which is like nobody wants participating from here because it doesn’t work with them.

 

So, there is going to be particularities to the area that’s going to be a little tough to work out in a nuance fashion at the state level, so I’m really hoping that — and it definitely seems to be the case the local government is much more interested in being involved in that.  Humboldt, you know, obviously had its head in the sand for a very long time just like everybody else.  I think that’s really, you know, one of the interesting things about Kevin using that all.  Kevin is like, that’s not head in the sand, that’s head out of the sand and actually looking around 360.  So, that’s promising to me.  It’s promising to me.  I think it’s easier to make sensible policy with people that like you’ve met face to face, you looked in the eye and you’ve talked to them and they talked to you.

 

Kerry: It was startling as someone who covers the industry here to see Representative Huffman, meeting with people that were out-cannabis farmers just recently and I believe Senator McGuire as well.

 

Dominic: Yeah, that’s right.

 

Kerry: So, to have Luke Bruner, representative of California Cannabis Voice Humboldt, sitting at the same panel table with the Lieutenant Governor was really showing how much the cannabis producing community has gained respect in order — and legitimacy in a way before the full legality has come onboard.

 

Dominic: Absolutely.  You know, I think that the politicians are responding to the organizing.  They understand it’s — Hezekiah, obviously, was also at that table.  Hezekiah Allen.

 

Kerry: Yes, in their early meeting.  I really think — and in a public meeting I was like, yeah.

 

Dominic: Went to public meeting, that’s right.

 

Kerry: But Hezekiah Allen of Emerald Growers Association, also representing cannabis farmer.

 

Dominic: They are at the table and like that’s the first step.  It is like sitting down at the same table.

 

Kerry: And even John Corbett, the Chair of the North Coast Regional Water Quality Board sat at that meeting.  When we go to do our water inspections, we don’t check for 215s and we don’t care if it’s medical cannabis or just cannabis.  So, there is sort of our recognition of reality on…

 

Dominic: There is progress — there is real progress being made; just so much progress being made on dealing with what is actually there instead of what you wish was there or not there.  You asked me about, you know, lessons from Washington and Oregon.  Did you want to, you know, talk about the elephant in the room which is the tendency that Oregon has at least now kind of confirmed for legal cannabis to be an occasion to radically change, you know, essentially medical cannabis?

 

Kerry: Are the dispensaries of California going to go the same way as the dispensaries in Washington and by the way, what’s happening with the dispensaries in Washington?

 

Dominic: Yeah.  So, basically what’s happening with dispensaries in Washington is there is Senate bill they just passed 505(2), that was essentially sort of a comprehensive medical marijuana, you know, regulation act and if you will recall back in 2011 we had one of those.  And it established a system for, you know, regulating commercial, you know, medical dispensaries and our governor section vetoed every part of it that had to do with regulation.

 

Kerry: The Washington Governor.

 

Dominic: Washington Governor basically because any part that would have involved a government official like, you know, being a part of that regulatory process — what she said then was, subject to them to Federal prosecution and so section vetoed out, you know, every part of it that would have been regulation.  And so all the folks who were geared up to, you know, satisfy the regulatory conditions in that bill which came from legislature and not initiative, they know what to do and so they got the legal advice that pretty much became standard practice which was, to operate as collective gardens and there was collective garden language and of course, collective gardens in that bill did not have to be regulated.  They were non-commercial provisions.  They were appendages to the actual regulatory structure which involved commercial regulation.

 

So, what we have is essentially excess point system that was — that sprang up not overnight at all, but certainly under the new conditions basically, if you’re a collective garden them you weren’t regulated, so it’s really easy to open up.  All you got to do is find a spot in the strip mall.  That’s the — that was the legal interpretation that they were operating under for four years and until the cannabis decision from last year, which was the first like — sort of challenged, that actually was ironically brought by medical cannabis activists to essentially get a legal opinion that, in fact, excess points were legal in the State of Washington and of course, they got the opposite result.  And since then basically like all anyone has had to do was apply that decision wherever they were and if they want to, you know, basically declare medical marijuana illegal, and that’s essentially what happened.

 

So, with 505(2), it creates a medical aspect to the legal cannabis markets.  I don’t want to go too deep into those.  I think we have talked about that a lot before, but what’s happened to the existing dispensaries is that City of Seattle is now kind of leading the way in terms of a specific framework for it, because technically everybody’s got till July of 2016 to be open.  City of Seattle issued essentially a three-tiered process for dealing with all of the dispensaries within its jurisdiction.  So, the first tier is essentially, if you opened up your dispensary after January 1st, 2013, you are out.  So, you are regarded as a, you know, as an opportunist.  You are just showing your lack of good faith because you opened up after legal cannabis passed.  So, that’s a condition.

 

The second condition and that’s one — this one was unanticipated I think and a little bit surprising to folks, is that the laws for legal cannabis which are only for people 21 and over, just got applied to dispensaries.  So, dispensaries basically were now being investigated every time they sold to a patient that was under the age of 21; that’s ongoing.  And so as a result the dispensaries and dispensary system — any patient that they had that was under 21 which, let’s say, was a fair amount actually — a lot of their clients are…

 

Kerry: Children with epilepsy, for example.

 

Dominic: Yes.  But children with epilepsy were not coming and buying, you know, _____9:50 on a regular basis necessarily at the dispensaries.  But there is a current way in which actually people under the age of 21 can go to a dispensary and wouldn’t get the dispensary in trouble and that’s if they got essentially like a caregiver letter.  Now, under the new system basically which, you know, again it will take a while to kind of implement it, instead of collective gardens there are four-person cooperatives that you can register with the State, and I think it’s three plants per person so, like you know four times three is twelve.

 

So, the new legality is, you know, one that is radically different from what was going on already, which makes it a pragmatic policy because what it’s doing is actually not really like working with what’s there and trying to shift it, it’s denying what’s there and burying your head in the sand and just saying, just go back to the black market basically.  So, that’s the interesting dynamic that’s going on right now and Washington’s dispensaries even if they are not shutdown because they are all getting letters in there — if they don’t shut down then they get like a huge fine and the other conditions are they have to be, you know, paid up on their taxes.

 

Kerry: How many dispensaries are we talking about here in Washington who are now illegal and being told to shut down because of this…

 

Dominic: Well, they are being told not necessarily to shut down unless they have — they meet their prior conditions already like you say — again, if they have not been paying their taxes, there is your letter you should shut down.  You have been paying their taxes, you were open before January.2013, we are going to leave you alone and also you now get to apply to be part of the rec system.  And let me say that the mathematics of this are not as severe as you would expect.  The City of Seattle counted something like a 106 dispensaries within its city limits and identified that about half of them actually have been open before January 1st, 2013.  So, like for their first cut half of them were still surviving as eligible to continue as part of the system.  Now, of course, then they are going to have to meet, you know, the zoning requirements and all the other things.

 

So, like how many of those people actually end up in the rec system, not sure, but again this is the good actor, bad actor, you know, a discourse.  It’s like let’s identify the good actors and then _____11:55.  Everyone else is a bad actor and has to go away except for that’s not how it’s ever worked within the context because really more people will just go away, they find other ways to do business.  So, what’s happening essentially is our, you know, not terribly regulated medical system in Washington is being actively downsized and dramatically changed.

 

Kerry: And at the same time production is increasing.

 

Dominic: Yeah, so the production side of things — of course, the rec side of things especially that’s an issue because Washington has never been obviously a big producing State.  It’s been, you know, an indoor producing State and importer of you know Oregon, BC and California cannabis.  But with the 502 system of course like that’s a native production, you know, system and that system we are getting up to about 800 pounds a month indoor basically.  It seems to be moving through the inventory.  Our outdoor season last year on a very abbreviated one again, you know, 14,000 pounds and created within the i-502 market, you know, a gloat and a problem with prices and so forth because we had 80 retail stores open in December.  We have like a 150 open now.  We are on schedule to have about 250 open in December of this year.

 

So, not even the full component of 335 that like the state has authorized there to be for a number of reasons, bans, inventory and so forth.  But what that says to me is that you got twice as many retail stores.  Let’s be generous and call that three times as many retail stores.  You are going to have at least 10 times the production.  So, what does that say for, you know, the outlets and the prospects of, you know, diversion or of folks who may even be actual growers who are growing buds but are not able to sell their stuff because there is not enough retail outlets essentially for it.  It’s a chokepoint.

 

So, this is all happening of course in the context of downsizing the medical dispensaries and so fewer medical dispensaries, not enough retail dispensaries, lots of production on legal side, plenty of production around in Washington State, I mean that’s legal side.  All that is recipe for, you know, what the state says it doesn’t want which is diversion in the black market.

 

Kerry: And it’s what the Department of Justice says, it doesn’t want through the Cole Memo.

 

Dominic: But that’s the funny thing about the Cole Memo.  The Cole Memo is actually relatively broad or vague and when it comes to talking about diversion and the conditions under which the legal experiment can go forward which is — which folks interpreted additionally, diversion meant out of the legal market into any other part, whether that meant out of the state, in the state.  If it was produced in the legal market, it needed to be sold in the legal market.

 

So, diversion was interpreted as being just about legal cannabis.  Since then diversion has been now applied to include essentially medical cannabis and so, medical cannabis is considered to be, you know, black market or diverted.  You know, if you don’t have a system regulation, it’s all diversion.  Diversion is the condition of not regulation according to the sort of latest popular sort of interpretation, which is why, you know, part of the justification for shutting down medical system is because Cole Memo.  And the Cole Memo, again, originally like did not at all apply to medical.  Why would you ask the states to be home to a standard that the Federal Government has never been able to actually keep itself, which is shutting down the black market.

 

If we interpret the Cole Memo to include that kind of demand, what we are doing is essentially saying the Cole Memo, you know, is absurd on its face and, you know, like how we are supposed to take it seriously at all.  If it sets an impossible condition and you are interpreting that impossible condition as something you have to meet even though you can’t, it would be totally impossible and you don’t have the funding to do it, it’s taking steps backward Kerry.  So, for me that’s a concern in Washington State.

 

It’s not like I’m here to defend, you know, unregulated or deregulated cannabis; I’m for regulated cannabis.  I’m for evidence-based regulation though.  You know, evidence that this works and that by the way is also part of the Cole Memo.  It has to actually work.  That’s a condition.

 

Kerry: Robust regulation.

 

Dominic: Robust regulation, which is interpreted as regulation that actually like does what it’s supposed to do and that’s not a reinterpretation of the Cole Memo.  That’s an original interpretation of the Cole Memo and it still applies and I believe that, you know, our legislature has fallen down you know, on their faces when they are ignoring — they are ignoring that part of the Cole Memo.  Cole Memo says it’s got work.  They are doing stuff that’s the opposite essentially and I feel like…

 

Kerry: Probably not their intention to do it.

 

Dominic: Yeah, probably not.

 

Kerry: So, we have got a long — we have got a lot of issues in Washington and I think you have given us a real good overview of that.  I know you have also been doing more analysis of the Oregon recreational market.  What’s the status today in Oregon, please?

 

Dominic: Well, what’s happening in Oregon is that’s — although Oregon had a regulatory system, you know, the Oregon Medical Marijuana Act, they were cruising along after initiative passed, there was a joint taskforce, you know, bipartisan, you know, both members of the _____17:14, and what they were tasked to do is writing rules to create the legal market and it had nothing to do with medical, nothing.  Somewhere along the way that joint taskforce essentially stumbled over, I think increasingly like the fact that it wasn’t addressing medical and essentially dissolved and we are left now, instead of the joint taskforce that actually has been listening and trying to figure things out, we are now seeing in Oregon the position of an agenda that looks a lot like Washington’s.  It’s an agenda that claims that Oregon needs to be concerned about the Cole Memo’s diversion situation.  Again, the diversion thing is really — it’s getting hammered home as a common sense discourse and is being redefined in my opinion.

 

Kerry: By whom? Who is doing this?

 

Dominic: Well — so, you know, it’s usually hard to tell but you know we do have a white paper that was produced by a Privateer Holdings Incorporated, same folks who own Leafly.  They are an investment group.  They are based out of Seattle.  They have run Tilray, a big cannabis warehouse in British Columbia and, you know, they are essentially venture capital firm that invests, you know, in and around the cannabis industry.  Now, what this really means right now is that, you know, they invest in real estate, they invest in things like Leafly, you know, really safe things or you know what…

 

Kerry: Things that are directly touching…

 

Dominic: Right.

 

Kerry: The plan, the dangerous plan.

 

Dominic: Yeah, except in Canada, right Tilray.

 

Kerry: Okay, and that’s a producer and seller.

 

Dominic: So, Tilray is a production facility, so — exactly.  So, like they want to get into that.  They think very highly of their ability to do so and they think essentially — obviously, what works for the Canadian system is, you know, the fact that it’s a centralized sort of warehouse production predominant system.  And that is not the system that works on the West Coast United States because to do that — even if they were able to capture the market that they think they can capture, we don’t need more people growing cannabis here on the West Coast.  We have got a lot of people who have been doing it for a while and doing it pretty well.  Freezing those people out of the legal regulated market basically by, you know, making it harder and harder for them to meet conditions to be in it, which is — the white paper is very much, you know, there’s a very explicit like a medical market needs to be reigned in and, you know, legal market needs to be _____19:40 them, right said.  Centralized warehouse production and so it’s a white paper, right.  So, that means it’s for policy makers and it’s like this is your issue in Oregon and this is — but it’s very…

 

Kerry: But it’s being written by someone it sounds like or an entity that has a very obvious agenda.

 

Dominic: It has a private interest.  Yeah, it’s a really-really naked agenda, you know, like it’s not even pretending.  They are basically saying — there is a certain kind of attitude there that’s — it’s a little incomprehensible to me.  But that’s public documents and it was meant to guide policy makers and very recently, you know, that’s the direction Oregon policy is going which is to remove protections from medical cannabis growers that currently exist for them, and that’s the key thing.

 

So, for Oregon — like California, Oregon is a big exporter.  You know, Oregon system — the concept of diversion like has to be treated very pragmatically because you cannot mathematically fit Oregon production into an Oregon consumption system.  It’s not possible.  What you do with everybody else there…

 

Kerry: Well, come on doctor, if everybody started smoking pot from morning to night maybe.

 

Dominic: I’m not sure actually.  Like — possibly, I don’t know, but certainly…

 

Kerry: Yeah.  Okay, so Oregon is also an exporter?

 

Dominic: Also, a huge export — so, the question is in terms of the social ecology is that, okay, they are producing a lot of cannabis and they have been doing under the legal protection of Medical Marijuana Act.  So, they get X amount of plants and they grow outdoor plants in Southern Oregon and they grow big ones, right.  So, the problem is that the protections are being talked about as that’s what they need to take away.  So, that would leave these folks without a pathway into the rec system, (a) because they can’t fit into it and (b) kind of leaves them back in the space of vulnerability that they haven’t, you know, had to — they have been able to be integrated members of society in many ways obviously because they have been left alone.

 

Kerry: So, the celebrated legalization of cannabis in Oregon is now making medical growers in Oregon more illegal.

 

Dominic: It is — vulnerable, that’s right, yeah.  That’s the trajectory right now.  It could change next week.

 

Kerry: So, who would they expect to grow the cannabis in Oregon?

 

Dominic: Privateer and — Privateer Holdings Incorporated perhaps.  Who do they expect to grow?  The people who get in on the system basically, who are able to get into the rec system.  Again, like those rules are still being sort of written, they are still being hammered out.

 

Kerry: So, there are no licenses now yet, it’s still in process; sounds like it’s getting pretty butchered from the original voter concept.

 

Dominic: Absolutely…

 

Kerry: Spirit of the law.

 

Dominic: I’m sure that that is the case and so for me it’s very interesting to watch this sort of medical cannabis versus legal cannabis like antagonism develop because it’s framed in a one way and it can’t be framed another.  It’s framed as, you know, these people are not worthy citizens because they are all gaming the system anyway.  Medical marijuana is a fraud, is the discourse, right and that’s why essentially these things are happening in Washington and Oregon because policy makers have been convinced by someone or someone’s such as Privateer Holdings that medical marijuana is a fraud.

 

Now, what I understand obviously, you know, all cannabis, especially medical like _____22:56, but on the other hand I understand that _____23:00 doesn’t really fly necessarily to the American public.  What I would say, you know, to the American public is that actually, you know, medical marijuana laws are not just about the right to health and therefore about whoever is being fraudulent about claiming that right to do things to make money for example.

 

It’s also about legal protection from an insane drug war and especially for growers that is the case.  Why is it that like — it’s not okay for folks to grow, you know, herbs in their backyard, why is it that we have to track this like it’s nuclear waste instead of an herb.  Why is it criminal to grow a plant and to me like — medical marijuana instead of fraudulent I would say that it has been a shield and I think it’s been human right shield for, you know, a more ecologically, you know, in-tune population essentially to carryout direct civil disobedience against an unfair, unjust, racist and genocidal law.  The threat to our society has come from the drug war not from, you know, people growing plants.

 

Kerry: And in the meantime, these people that they are —

 

Dominic: They need those protections, they need to keep them.

 

Kerry: They have also been providing the medicine that has been saving children with epilepsy from 200 seizures a day, etc., so that sort of recognition we saw in Garberville because of the organizing in education that’s been done by the grower population here in Northern California.  That’s not coalescing as well in Oregon yet, and would have to pretty quickly to reverse this trend would you say?

 

Dominic: Well, you know, to be honest Oregon is incredibly organized and, you know, they have had _____24:35 in the room like I spoke to the Oregon Sun Growers Guild, you know, last year when they were like, you know, what do we have to expect coming up, you know, I was talking about well, this is the rule making process and Jonathan Mann was in the room _____24:45 and he was like, and this is how it’s going to work in Oregon, you know.  He gave the very specific thing.  So, they have been there.  They have been in the room.  They are talking to each other in a way that never was the case in Washington and still this is happening and that’s what scary about it, is that, this is not, you know, defenses population that’s been mobilized against; these were activated citizens who were already calling their, you know, representatives and being very engaged in the process and they are still getting shoved out.

 

So, it’s difficult to say, you know, like — obviously, I don’t have the answer for you know, how it’s going to be reversed.  I’m hoping that by presenting, you know, evidence in the base policy recommendations that I’m hoping that that can help; it didn’t help in Washington, so I don’t know.  But, you know, either way the upstart of this is the whole thing is going to move forward one way or the other and it’s either going to be moving forward with, you know, more social antagonism because of the policy that’s been created is going to be less.  Either way we are going to have legal cannabis and we are going to have medical cannabis and one shape or form we will have a black market, but the fact is that people are making decisions that are changing the landscape in a way that is potentially, you know, productive of more conflict in society rather than less and that’s my main concern.

Kerry: Thank you for all the work you are doing with Cannabis and Social Policy in Stanford.

 

Dominic: Thanking you for getting the word out.

 

Kerry: Cannabisandsocialpolicy.org, correct.  Any closing remarks?

 

Dominic: Yeah, I do actually want to, I want to give a plug for the women’s groups that are starting to proliferate here in Humboldt, CCVH Women’s Group and the Women Grow.  There are meetings that happen in Northern Humboldt, meetings happen in Southern Humboldt.  This is — honestly, if there is anything I can tell you about Washington that’s really positive is the women’s groups have been, you know, incredible.

 

Kerry: In Washington?

 

Dominic: Yeah, they have been, you know, powerful and humane and forces of good and I see that happening here too and I’m really starting…

 

Kerry: Yeah, Normal Women’s Alliance also.  So, we have three different, four different women groups that are really gaining momentum here in the region which is also very promising.

 

Dominic: I’m really excited about that.  I think they will make the difference honestly.

 

Kerry: Yeah, bringing women to the table always helps the discussion.

 

Dominic: Yeah, absolutely.

 

Kerry: All right.  Well, thanks Dr.  Dominic Corva.

 

Dominic: Thanks Kerry.

 

Kerry: Okay.

 

That’s all for today’s show.  Thanks for listening and join me again next week 5:30 p.m. for another special edition of Cannabis Consciousness News.  You can also find links to this and past programs on the Facebook page Cannabis Consciousness.  Reporting from the heart of the emerald triangle, this is Kerry Reynolds.

Inventory Stories June 2015

Inventory June 15 final

Chart by Dominic Corva, using data from”Weekly Marijuana Report” http://www.liq.wa.gov/records/frequently-requested-lists, accessed 6/18/2015

By Dr. Dominic Corva, Executive Director

Late Spring 2015 has come and gone. While wholesale prices have stabilized relative to Winter’s crash, Washington’s legal cannabis market exhibited zero evidence of a market clearance that usually leads to more favorable wholesale prices in late spring and early summer. We clearly have more than enough cannabis to serve approximately 150 open I 502 recreational stores, and that does not bode well for I 502 producers for Fall 2015.

The chart above was created by using the WSLCB June 17, 2015 “Weekly Marijuana Report,” in which Usable Marijuana Sales are subtracted from Usable Marijuana Production on a monthly basis to show an accumulated inventory of 6,293 lbs, about a month and a half of supply at the current 4000+ lbs per month sales rate. This is actually a “processing” inventory, not a production inventory, so we don’t really know — nor can we know, as far as I can tell — what the production inventory might be. On the same weekly report, “Marijuana Flower Harvested” does not equate with “Usable Marijuana,” as the former is a raw production number and the latter is what ultimately gets packaged out of said harvest. Producer inventory can and does sit in storage until it is packaged — “processed” — for the wholesale market, which usually only happens when a processor thinks they can sell it.

So the chart above represents the difference between when a processor thinks they can sell it, and when they actually do. And of course usable marijuana can be turned onto all sorts of processed goods, not just flower. Here is the WSLCB harvest chart, reproduced below:

Marijuana Flower Harvested

 

The chart above gives us raw numbers, which we need to qualitatively assess as “indoor”; “light dep”; and “outdoor” in order to get a sense of what’s going to happen later this year. Indoor production occurs year round; light dep is a type of outdoor usually harvested June-August; and “outdoor” refers to full-term outdoor harvested September-November (the “November” part really refers to when we manage to count October’s harvest). I’ve created a table below for consideration.

Pounds Harvested Type of Harvest
July 352 Indoor likely
August 1014 Light Dep and Indoor
September 1907 Light Dep
October 7172 Mostly Outdoor
November 13702 Mostly Outdoor
December 4051 Indoor likely
January 4016 Indoor likely
February 3515 Minimum indoor capacity
March 5117 Indoor likely
April 5420 Indoor likely
May 6426 Indoor likely

 

As you can see, indoor production has been surging this year and now seems to represent about 5,000/month. There’s plenty more to come, but note that about half of last November’s supply shock from outdoor is being produced on a monthly basis. By November we could have 1.5X that much, or 7500 lbs/month.

The question is, what’s November 2015’s outdoor harvest going to look like? Remember last year, about half that production came from SIX Tier 3 outdoor producers (plus ONE Tier 2 indoor), out of 185 “active” producers at that time. We have 404 producer/processors licensed right now, and we expect about 30 of those to be Indoor Tier 3s; 44 to be “Both” indoor and outdoor Tier 3s, and about 47 of those to be “outdoor” Tier 3s, using WSLCB information provided to CASP to create sample percentages for the industry for 160 I-502 producers.

That’s about twice as many licensed Tier 3 outdoor producers as there were last November, and of course it doesn’t take into account Tier 2 outdoor production (Tier 1 outdoor barely exists). Further, that’s the number of outdoor producers who are potentially able to grow all year, including light dep production. Light dep canopy does eat into full-term canopy projections — how much, I have no idea at the moment. But compare with last year’s cohort, which began in mid-lat July as opposed to April.

Let’s get back to simple math. At this rate, it’s not unreasonable to project indoor harvest capacity in November between 7000-8000 lbs. Let’s conservatively project outdoor production capacity at least three times the capacity as last year, but probably more like 5X-7X last year’s capacity (note that indoor production is up at least 10X from July 2014, right now). That’s 39,000 lbs. of outdoor, and 7500 lbs of indoor, for a November harvest of about 46,500 lbs.

Then, add the inventory that was accumulated over the previous 12 months. Currently, 6,293 lbs, or a month and half supply at current retail movement.

Add light dep to the picture. Consider the degree to which light dep production will happen in the next three months — we should have a better idea of what that means next month, when the first light dep data should become evident.

Add to that the unknown quantity of “Marijuana Flower Harvested” but not produced — from last year, light dep, and indoor.

What can we project? I could pull numbers out of thin air all day long but I prefer not to do so in this forum. We can, however, be qualitatively certain that there will be a harvest tsunami that will leave many producers — if not most — with Serious Inventory Problems.

Many, if not most, will go out of business. It’s not like the industry has lots of capital to tide it over till it can be sold — in fact, post-tax season, most producers and producer/processors struggle to stay afloat now. While concerns about how much of the I 502 industry will go under can be thought about as a “private” concern, here’s a public one: if you are a producer sitting on several hundred pounds of cannabis you can’t sell, and you decide to liquidate, it’s going to be awful tempting to liquidate outside the legal market.

There’s plenty we still don’t know, and lots of information yet to come in. Let’s see if the WSLCB moves quickly to license existing medical retailers with “medical endorsements” — there are about 400 of those in the state, and maybe half of them could convert very rapidly into I-502 retail points. That would help considerably. It would also help considerably if the WSLCB could open up the remaining 160 or so retail lottery winners, but a significant chunk of those simply can’t open because of local jurisdictional bans. And what about the retail applicants that didn’t win the lottery? Many of those are current medical access points, so that would help. But many of those are not going to be happy to get jumped in line by medical access points that were not in the lottery.

The solution is simple, of course — open up the rest of the retail applicant pool to all lottery applicants; and also move to convert as many existing medical access points as possible as can into the I 502 retail system with “medical endorsements,” as must happen anyway.

 

I 502 Industry Tips Away From Producers, Processers

Percent of Revenue from Wholesale - May2015

 

by Dr. Dominic Corva, Executive Director, and Dr. Jim MacRae, Research Associate

The I 502 cannabis market is just shy of its first birthday, and this chart demonstrates the consolidation of gross revenue at the retail level over the first 11 months. The first three months of the story took place when a few dozen retail stores struggled to stay open and stocked with cannabis. This condition was alleviated considerably as the first light dep crops were harvested and processed through the system: producers and processors continued to command premium wholesale prices through November. But on November 15, 2014, Randy Williams of Fireweed Farms put up his entire outdoor harvest for auction, netting about $2K per pound wholesale, or roughly $4/g.

Wholesale prices plummeted over the next month and have stayed low ever since, although there has clearly been price stabilization starting in February that indicates the fall harvest inventory began clearing. Some of the wholesale price pressure has been alleviated by the opening of new retail stores. At last count, 148 out of 163 approved retailers have reported sales and thus should be considered operational. At the same time, however, indoor production is coming online rapidly: May’s harvest numbers from the WSLCB came in at 6494 lbs. This includes both bud and raw material for processing into extracts and edibles, but note that this figure is about half that of last November when the outdoor harvest sent wholesale prices tumbling to a range of $2-$7/g.

Thus the story of the chart, in which retailers are capturing a larger and larger share of industry sales. On the one hand, this is visual evidence for the logic of collecting I 502 taxes at the point of retail, a legislative I 502 fix that is currently stalled in special session after special session. Until this fix arrives, wholesalers — and to a lesser extent, processors — will be squeezed tighter and tighter between the rock of plentiful supply and the hard place of exorbitant excise taxes. In between, the excruciatingly slow expansion of retail concentrates industry sales revenue at the end of the supply chain.