Washington’s Pot Surplus a Cry for Policy Reform

Reform Surplus

By Marisa DeZara

While Colorado’s legal marijuana market continues to flourish, Washington’s market has been doing quite the opposite because its system has naturally encouraged a surplus.

Supply and demand: a foundational economic concept, and the basic principle of any competitive market. As of recently, demand has not met the bountiful supply of marijuana in the state of Washington. Thus, prices have gone down, yet growers are struggling to get rid of the product.

For the sake of comparison, according to the Colorado Pot Guide, there are over 400 recreational dispensary locations in Colorado, whereas Washington has only about 85 recreational shops open statewide. According to MSN, there are about 270 licensed growers in Washington, with a mere 85 shops available as potential clients. Factors like a difficult licensing process and marijuana bans have played a large role in the discrepancy between cultivators and dispensaries.

Moreover, Washington state has decided to cap the number of recreational dispensaries at 334, with only 21 shops allowed within Seattle’s city lines. Medical dispensaries far outnumber the 334 recreational recreational dispensaries, according to Bloomberg Businessweek. The competition is simply unfair.

The disparity between the large number of medical stores versus the small number of recreational stores, and issues regarding supply and demand, is only a symptom of Washington’s flawed marijuana system. The implications of a flawed system contribute to a heightening black market, as its prices remain competitive, especially in comparison to that of legal marijuana.

According to Andrew Seitz, general manager at Dutch Brothers Farms in Seattle, the situation in Washington is an “economic nightmare.” This nightmare is starting to pressure all parties involved. “I got retailers beating me down to sell for black-market prices,” said Fitz Couhig, owner of Pioneer Production and Processing.

Such high recreational prices have prompted users to seek marijuana through illegal channels where the product is untaxed, including black market dealers or unregulated dispensaries. However, medical and recreational marijuana relations are expected to change, as several bills addressing these issues have been proposed.

Democratic Sen. Jeanne Kohl-Welles has proposed legislation that would essentially merge medical marijuana into the I-502 system. If medical marijuana operates underneath I-502, then illegal or illegitimate medical dispensaries would most likely dissipate, due to more oversight. Additionally, her proposal would remove the cap on the total number of dispensaries allowed within Washington state lines, giving growers more opportunity and potentially fixing supply and demand imbalance. It too would allow home growing and simplify the tax structure.

“Right now we have a legal system in place for recreational use, but we have really no legal system for medical marijuana growing, processing and selling … . So we’re left in a bit of a mess,” Kohl-Welles told Seattle Met.

Republican Sen. Ann Rivers, on the other hand, has proposed a bill that would require all medical marijuana dispensaries to conduct product testing, creating a more legitimate and accountable business model. The products would be tax-free, but under Rivers’ bill, medical dispensaries would only be allowed to sell edibles and oil concentrates. To further legitimize medical marijuana shops, licensing would also be required.

A draft of the measure, given to The Associated Press, reads: “Recognizing the health concerns relating to smoking marijuana, the legislature intends to prohibit the sale of products that must be smoked at medical marijuana retail outlets.”

The two major proposals, both Rivers and Kohl-Welles, provide options for reforming the medical marijuana industry in Washington, so that it is congruent with the highly regulated recreational marijuana industry. Inevitably, the two bills have unfavorable components as well, Rivers’ being that medical dispensaries won’t sell actual bud, and Kohl-Welles’ does not necessarily protect the rights of medical marijuana patients. Rivers’ bill is currently in the majority leadership.

“There are some good things in Rivers’ bill and some good things in Kohl-Welles’ bill,” said John Davis, chairman of the Coalition for Cannabis Standards and Ethics. “I’m hoping we can pick what actually works from both sides.”

Yes, the industry is in its infancy, but Washington’s legal marijuana market simply cannot thrive when the numbers do not make sense. A balance in the market, with regard to both medical and recreational marijuana, is crucial for its chance at prosperity.

Guest Contributor designates a writer who is guest publishing content with MJINews.

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