Six months following the uncertain launch of Washington state’s recreational marijuana market, industry professionals now face an unprecedented problem: licensed growers are sitting on a huge crop of outdoor product harvested in the fall, and there currently aren’t enough retailers to see all of it distributed.
An article from the Associated Press explains that the 85 licensed retailers in Washington are failing to keep pace with the state’s approximately 270 licensed growers. Last week, growers had reportedly harvested upwards of 31,000 pounds of cannabis since the market launched, but stores have only been able to distribute one fifth of that amount.
During the early days of Washington’s legal weed, it was product shortages that dominated industry-related headlines. Initial retail prices doubled and in some cases tripled those of the black market and the lesser-regulated medical industry, and there were reports of price-gouging by some of the first licensed growers as retailers struggled to find supply to satisfy legal consumers.
The tides have turned, however, and now growers are the ones feeling the sting of an unbalanced market. “Every grower I know has got surplus inventory and they’re concerned about it,” said Scott Masengill, a pot farmer in central Washington who’s thus far only managed to sell half of his 280 pound crop. “I don’t know anybody getting rich,” he said. One Seattle-based grower reportedly sold his first 22 pound crop at just under $21 per gram — his second crop, however, is expected to earn about $4 per gram as a result of the growing surplus.
The solution, many people argue, is to license more retailers to move the product. This process, however, is chock-full of bureaucratic requirements, and local moratoriums on the legal marijuana industry can create even more roadblocks for aspiring ganjapreneurs.
And while the market faces steep competition from the black market across the board, one of the biggest threats to the recreational industry is medical marijuana. Currently, dispensaries grossly outnumber recreational retail distributors. There isn’t a known total of medical dispensaries operating in the state, but there are significantly more dispensaries than the 334 reserved spots for licensed retailers (Seattle alone has hundreds of dispensaries on file). Recreational retailers have even started hiring lobbyists in Olympia to fight for a more-regulated medical market, according to a Bloomberg Businessweek report.
Officials with the Washington State Liquor Control Board, like project manager Randy Simmons, say they are unconcerned by the current situation and are expecting up to 100 more retailer locations to open in the coming months. Randy Simmons, project manager for Washington’s legal marijuana market, addressed the industry’s current problems with a simple explanation: “It’s the volatility of a new marketplace.”
Sources:
http://hosted.ap.org/dynamic/stories/U/US_TOO_MUCH_POT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
Photo Credit: tanjila ahmed