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| Marijuana sales kick off in Washington state – but sellers are in short supply | Marijuana sales kick off in Washington state – but sellers are in short supply |
| (about 1 month later) | |
| Washington state’s legal retail marijuana industry, the second in the US after Colorado, opened for business on Tuesday, but many of the business owners lucky enough to score a coveted license during a lottery process run by the state couldn’t get it together to start selling pot on time. | Washington state’s legal retail marijuana industry, the second in the US after Colorado, opened for business on Tuesday, but many of the business owners lucky enough to score a coveted license during a lottery process run by the state couldn’t get it together to start selling pot on time. |
| Long lines wrapped around the businesses that did open, like Cannabis City, in an industrial neighborhood south of downtown Seattle, where some customers waited all night to claim their part in the legalization movement. | Long lines wrapped around the businesses that did open, like Cannabis City, in an industrial neighborhood south of downtown Seattle, where some customers waited all night to claim their part in the legalization movement. |
| “I wanted to be a part of history,” said one of the customers, Damien Tillman, who himself grows a strain of marijuana known as Holy Grail Kush. He donates his product to a collective that redistributes marijuana to clients, also by donation. “I’ve been a medical patient for years, but I moved here from California to participate in the community here.” | |
| Down the street, a McDonald’s and a Subway stood ready to absorb the ancillary economic effects of increased retail traffic in the neighborhood, which acts as a staging area for private port-based businesses like warehousing and freight forwarding. Next to Cannabis City, a shuttered business advertised liquidation sales. But just outside, under an uncharacteristic Seattle sun, hundreds of people waited for their chance to buy some weed without breaking the law. | |
| While Washington plans to eventually provide more than 300 retail licenses, this week began with just 24 businesses permitted to sell recreational marijuana. Of those, just a few were open on Tuesday. | |
| Cannabis City’s employees had prepped the store for media coverage by stringing yellow police tape over the front doors. Outside the store, there was something of a carnival atmosphere. Volunteers in bright green wigs handed out bottles of water and used a bullhorn to fire up the crowd. On the street, orange cones squeezed the container-laden semis in the area to do the neighborhood’s normal business into one lane of traffic. | Cannabis City’s employees had prepped the store for media coverage by stringing yellow police tape over the front doors. Outside the store, there was something of a carnival atmosphere. Volunteers in bright green wigs handed out bottles of water and used a bullhorn to fire up the crowd. On the street, orange cones squeezed the container-laden semis in the area to do the neighborhood’s normal business into one lane of traffic. |
| While there were more people outside the store dressed in tie-dye than in button-down shirts, the business opportunities created by Washington’s legal marijuana market extend beyond the stereotypical hippies and their baggies. | While there were more people outside the store dressed in tie-dye than in button-down shirts, the business opportunities created by Washington’s legal marijuana market extend beyond the stereotypical hippies and their baggies. |
| Brian Wansolich, Cy Scott and Scott Vickers are co-founders of Leafly, a website and app that provides tens of thousands of crowdsourced reviews of marijuana strains and geomapped legal dispensaries, whether medical or recreational. “We are the Yelp and the WebMD of cannabis,” Wansolich said, while taking in the hubbub outside Cannabis City. | |
| They moved to Seattle in September from Orange County, California, and sold Leafly to Seattle-based Privateer Holdings, the first private equity fund in the cannabis space. | They moved to Seattle in September from Orange County, California, and sold Leafly to Seattle-based Privateer Holdings, the first private equity fund in the cannabis space. |
| After pulling in $7m from investors during Privateer’s first round of investment, Privateer CFO Michael Blue is on the road raising $75m for a second series with a minimum starting investment of $1m. | After pulling in $7m from investors during Privateer’s first round of investment, Privateer CFO Michael Blue is on the road raising $75m for a second series with a minimum starting investment of $1m. |
| “Today is obviously an exciting day for us in Washington to finally see the market get up and running,” said Blue, who is also CFO of Leafly. “With the opening of retail markets in Washington and Colorado, and looking at what happened in New York” – where governor Andrew Cuomo just signed a strict medical marijuana bill – “we see the market expanding for companies like Leafly, bringing a wider audience to the site, and bringing a more mainstream community, which has been our target audience from day one.” | |
| In Washington, tight restrictions prevented the shops – where customers can buy but not consume pot products – from opening near schools, playgrounds, childcare centers, parks, public transit nodes and other facilities likely to attract children. | In Washington, tight restrictions prevented the shops – where customers can buy but not consume pot products – from opening near schools, playgrounds, childcare centers, parks, public transit nodes and other facilities likely to attract children. |
| Certain streets in Seattle are already lined with medical marijuana shops, where employees refer hopeful buyers to herb-friendly doctors who can provide a prescription. But the lure of buying weed purely for recreational purposes has created a customer demand that will quickly exhaust the retail stores’ small supply of state-sanctioned marijuana. | |
| The state will collect taxes equal to 25% of marijuana sales at each step on the supply chain – from producers to processors, from processors to retailers and from retailers to the public. | The state will collect taxes equal to 25% of marijuana sales at each step on the supply chain – from producers to processors, from processors to retailers and from retailers to the public. |
| It’s unclear how many of those customers may be from elsewhere. Out-of-state residents will be allowed to buy marijuana in Washington, but they can not legally take it out of the state. | It’s unclear how many of those customers may be from elsewhere. Out-of-state residents will be allowed to buy marijuana in Washington, but they can not legally take it out of the state. |
| Washington’s stores opened without a supply of edible marijuana products that have proven to be a regulatory challenge in Colorado, in the hope that the delay would allow producers to adjust existing recipes, the strengths of which were attuned to medical users, for newcomers. | Washington’s stores opened without a supply of edible marijuana products that have proven to be a regulatory challenge in Colorado, in the hope that the delay would allow producers to adjust existing recipes, the strengths of which were attuned to medical users, for newcomers. |
| Though Washington law does not preempt federal statute, under which marijuana is still illegal, the Justice Department assured Washington governor Jay Inslee that it would not sue to overturn the state’s development of a highly regulated marijuana market. Inslee and Washington state attorney general Bob Ferguson announced that the Justice Department would focus on enforcing the Controlled Substance Act’s provisions against distribution to minors and beyond state borders, among other things. | Though Washington law does not preempt federal statute, under which marijuana is still illegal, the Justice Department assured Washington governor Jay Inslee that it would not sue to overturn the state’s development of a highly regulated marijuana market. Inslee and Washington state attorney general Bob Ferguson announced that the Justice Department would focus on enforcing the Controlled Substance Act’s provisions against distribution to minors and beyond state borders, among other things. |
| It is still considered illegal in Washington state to grow your own marijuana, to buy it on the black market and to consume it in public. | It is still considered illegal in Washington state to grow your own marijuana, to buy it on the black market and to consume it in public. |
| Tillman is concerned that Washington may be hobbling its industry by involving the state in a heavily tiered system in which growers and processors cannot also be retailers. “I am looking forward to better structure for the system and complete legalization,” Tillman said, taking a puff from his e-cigarette, which has a separate attachment to vaporize marijuana – and a USB port to charge his cellphone. “Marijuana is not as bad as people once thought it was.” |