Washington Prepares to Launch Recreational Marijuana Industry

Borderland Beat  

When it came to picking a spot for their marijuana shop, a group of entrepreneurs with business backgrounds didn’t consider Seattle, Washington’s biggest city and home to a thriving culture of recreational cannabis use.

The guys behind Main Street Marijuana instead set their sights south. They chose Vancouver, in large part because of its easy access to Portland, another West Coast city with affection for high quality pot.

Oregonians will get the chance to vote on legalizing recreational marijuana in November, but practically speaking, access to legal cannabis begins next week when Washington becomes the second state in the country to launch a regulated recreational marijuana market.

The Washington Liquor Control Board, which oversees recreational marijuana facilities, on Monday plans to issue permits to an estimated 20 recreational marijuana retailers statewide. The following day, one of Vancouver’s first marijuana shops will open in a Main Street storefront, a prime spot managers Ramsey Hamide, 35, and Christopher Stipe, 31, chose for its proximity to Portland.

“Oregon is going to be a great neighbor to have,” said Stipe, as contractors bustled around the former jewelry store installing security and coating the windows with opaque coverings so marijuana can’t be seen from the street. “We’re off the freeway. Hopefully, we’ll get people coming into Oregon from out of state. I think tourists will want to check it out.”

The state’s recreational marijuana program, approved by Washington voters in 2012, isn’t headed for a smooth start. Retailers say inventory will be low, prompting at least one shop to consider limiting sales to a few grams per consumer instead of the one ounce allowed under Washington law. Extremely popular consumer products, such as marijuana-infused cookies and other sweets, as well as potent marijuana oils and other concentrates, won’t be in stock at first, as the state continues to process licenses for those businesses.

“I think the stores will definitely be able to open,” said Alison Holcomb, criminal justice director of the ACLU of Washington and the primary drafter of Initiative 502, the state’s recreational marijuana law. “How long they will be able to keep supply on the shelves is a really important question.

“There may be outages from time to time,” she said. “It will be a little rough in the beginning.”

Holcomb said Washington officials didn’t anticipate the flood of applications they got for producer, processor and retailer licenses. She said they estimated several hundred but ended up with 7,000 -- and only 18 staffers to process them.

The Washington Liquor Control Board so far has licensed 16 marijuana growers that are market ready. All of their product must be harvested, dried and tested for mold, mildew and pesticides, as well as tetrahydrocannabinol and cannabidiol at a state-certified lab. The state so far has licensed two marijuana testing labs.

Growers themselves are a factor in the low supply, she said. After decades of operating on the black market, Washington’s pot growers find themselves adjusting to tight state regulation and oversight. The learning curve, said Holcomb, is steep.

“A lot of the producers weren’t ready for final inspection,” said Holcomb. “These are people who had been growing in their basement, backyard and farmland without having to meet the requirements for business licensing.”

Brian Stroh, 44, owner of CannaMan Farms, a licensed marijuana grower in Vancouver, said he expects to have up to six pounds ready for sale by the end of next week. He said testing the product, a process that takes five days, adds to the delay in getting the product onto store shelves.

“There hasn’t been enough time,” said Stroh, who came to the marijuana industry after two decades in finance. “There were not enough producers licensed early enough to support the stores.”

He gets about a half-dozen calls daily from retailers searching for inventory.

His response: “I don’t have any product.”

Eventually, he expects to produce between 20 and 30 pounds of cannabis a month.

Under Washington law, anyone 21 and older can buy up to an ounce of marijuana. For now, supply is so tight Stroh’s packaging his cannabis by the gram so shop owners can more easily sell smaller amounts.

Brian Budz, 40, owner of New Vansterdam, located at 6515 East Mill Plain Boulevard, plans to cap how much cannabis his customers can purchase until the inventory stabilizes.

“We want people to be able to come in and have some fun, but we are probably not going to let anyone have the maximum of an ounce,” said Budz, who expects to be licensed Monday but won’t open until next Friday. (And yes, Budz is his real name.)

“That would clean us out pretty quickly,” he said.

At Main Street Marijuana, where shop managers said they will aim for a high-end crowd that includes tourists, Stipe expects to sell marijuana for between $12 and $15 a gram. Some estimates are as high as $25 a gram at other outlets. Marijuana sells for between $5 to $10 on the black market in the Portland area.

Hamide said Washington’s marijuana shops, stocked with state-regulated and tested cannabis, have a “serious advantage” over the black market.

“It you want cheap weed, you can go to the local dealer,” he said.

That’s what some Oregonians say they’ll continue to do until Washington’s prices come down.

Russ Belville, who hosts a Portland-based talk radio show about marijuana policy and culture, said Washington’s marijuana prices will discourage recreational users from heading north to buy it.

Regular recreational cannabis users in Portland already have cheaper sources for pot.

“I don’t see anyone from Portland beating a path to Vancouver to pay $25 a gram,” he said. “Even at $12 a gram it’s going to be difficult.”

Source:  The Oregonian