Visit a marijuana producer-processor warehouse right now, and you’ll likely find hundreds of pounds of unsold pot sitting around. It has become a defining characteristic of the state market. After a slow start on the production end that plagued retailers in the pot market’s early days last year, producers have ramped up their output while retailers have chugged along far slower.
The result is cheaper prices — it was hard to find weed cheaper than $30 per gram the first month of sales, now the most affordable strains sell for around $10 a gram — and producers that are struggling to stay afloat.
“A lot of producer-processors looked at the market like it was going to make them rich,” says Dax Colwell, president of New Leaf Enterprises, one of Seattle’s largest producer-processors. “They thought, I’m just going to grow these plants and sell it to these guys and there will be so much money. And for the first couple months, it looked that way. … Then a lot of growers came on board real quick, and retail stores weren’t expanding as quickly as we were hoping they would.”
With Gov. Jay Inslee’s signature, House Bill 2136 eases regulations that have been one element hampering the growth of the retail pot market. The bill allows cities to reduce the 1,000-foot buffer zones around recreation and child care centers, parks, transit centers, libraries, and arcades to as little as 100 feet, opening up far more real estate for cannabis shops if cities change their zoning.
Furthermore, the bill eliminates the 25-percent excise at each point of sale. Going forward, consumers will pay a single 37-percent tax.
The bill, coupled with Senate Bill 5052, which folded the medical market into the recreational one, should put vastly more retail stores in business. At this point, there are 161 open retail shops in the state to 530 licensed producers.
At this point, retail store owners who had to carefully manage their supply in the first months are now turning away producers. “I get calls every day from producer-processors,” said Novel Tree owner Chris McAboy. “Some growers we knew didn’t go out of business, but they had to partner with Tier 3 producer-processors.”
A growing number of retail outlets will boost demand for producer-processors, but consumers will notice a difference, too. With so few retail stores, particularly on the Eastside, a consistent flavor has emerged — every store is trying to sell a strain for everyone. More stores will yield greater specialization as retailers must distinguish themselves. Furthermore, entire towns that haven’t had the option to buy marijuana might see stores open if cities change their zoning.
Before H.B. 2136 passed, there was no place in Redmond that a pot shop could locate — every location in the downtown corridor is within 1,000 feet of the regulated public spaces in Initiative 502, the original legalization law, and city zoning doesn’t allow dedicated retail stores in industrial areas.
The new law gives the Redmond City Council the ability to change the zoning, but that’s not a guarantee. “Frequently in Redmond we use the wait-and-see attitude to essentially avoid issues,” council member Hank Myers said.
“There are two essential issues,” Myers continued. “One is the process and the tax collection is going to be simple, making the commerce side easier. And the reduction of several setbacks will open up more and more retail space for (cannabis retail) use within zoning codes.”
The state Supreme Court ruled in 2014 that cities can ban recreational marijuana sales, so H.B. 2136 is no guarantee that Redmond will be open for business when it comes to pot. So, while the new law streamlines pot regulation, and could put $15 million in pot-tax revenue in cities’ coffers, that only applies in towns that embrace the new market.