The Lens: Weed-Like Growth for Washington's Cannabis Industry
The recreational pot industry in Washington State is growing fast. It’s expected to hit the one billion dollar-mark in sales for the 2016 fiscal year ending in June, according to the state Liquor and Cannabis Board. Also in June, a merger is planned with the medical marijuana industry that is expected to add to growth. By fiscal year 2019, projections for marijuana tax revenue reach $362 million.
The long-term success of the legal leisure weed trade in Washington may depend on whether existing conflicts between state and federal law on marijuana are resolved. Another concern is taxes. Some industry experts warn Washington’s higher marijuana tax rate compared to Oregon’s might entice both customers and sellers out of state or back onto the black market.
A $1.3B Annual Market In Washington
In the past year the amount of marijuana grown and sold in Washington state has increased dramatically. Usable marijuana production increased from 4,428 pounds in April 2015 to 8,615 pounds in April 2016. Recreational marijuana was legalized by Initiative 502 in 2012. The first legal sales began on July 8, 2014.
A December 2015 report for the state estimated that the overall value of the marijuana market in Washington is around $1.3 billion annually. Of that an estimated $480 million was from medical marijuana, $460 million for state-licensed recreational stores and $390 million in illicit sales. This breaks down to 37 percent of sales in medical marijuana, 35 percent in legal recreational pot and 28 percent in black market sales.
Much of the legal recreational pot sales are to buyers formerly on the medical or black markets, said Sen. Ann Rivers (R-18)
‘Traditional Business Folks’ Getting Into The Game
But the growth also shows that new blood has entered the market, including entrepreneurs. That’s according to Washington CannaBusiness Association Executive Director Vicki Christophersen. The trade association represents licensed and regulated cannabis businesses.
“Most of the people we have in the association and the vast majority of people that are licensed weren’t necessarily selling or producing on the black market before,” she said. “Most of the people we deal with are your traditional business folks. It’s a whole different ballgame from my perspective.”