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Washington state's legal weed industry knows what Silicon Valley never will Washington state's legal weed industry knows what Silicon Valley never will
(about 1 month later)
The Disneyland-long The Disneyland-long lines started at 5am. The quality was inconsistent. The prices were higher than the black market. And, yes, shortages are expected. You might think the scene at Cannabis City a few blocks from our Seattle headquarters on Tuesday morning was a sign of logistical failure as legalized recreational marijuana finally went on sale in Washington state. But opening day for adult-use cannabis here proved that ours is like any disruptive new business, in any newly legal industry – it's messy, and it takes time. Except we've been practicing patience on purpose.
lines started at 5am. The We launched our startup three years ago, after then-Governor Christine Gregoire vetoed a bill that would have licensed and regulated the production and distribution of medical cannabis much the way Colorado has done – which is to say, too fast. Had that law passed, Washington state would have made a quicker transition from medical to recreational stores.
quality was inconsistent. The prices were higher than the black market. And, yes, shortages are expected. You Instead, the remaining law left our state with a fragmented system that welcomed all actors. We became the state's first commercial supplier of cannabis – for medicinal use. There were no testing requirements, no quality control mandates, and little to no enforcement. The very notion of cannabis as medicine, however, made cutting corners bad business. The luxury of time – as opposed to, say, Facebook's mantra of moving fast and breaking things – turned out to be a good thing for establishing an affordable luxury product.
might think the scene at Cannabis City a few blocks from our Seattle headquarters on Tuesday As Initiative 502 to legalize adult-use recreational cannabis was gaining traction, the medical cannabis market here had become fractured. There were legitimate patients, and then there were recreational users acting the part. There were dispensaries catering to patient ailments, and then there were those who refused to collect taxes and used code names to communicate.
morning was a sign of logistical failure as legalized recreational marijuana It was a difficult place to be legit on the way to legalization. But by November of 2012, voters agreed to continue the experiment.
finally went on sale in Washington state. But opening day for adult-use Then came the regulators. Despite their best intentions, it became clear that the Washington State Liquor Control Board had little clue about how to make sense of producing, processing and selling cannabis. After all, there was no data and no precedent, other than the rushed and occasionally dangerous example of Colorado, which recently added testing requirements in the wake of several deaths associated with high levels of intoxication. And there was a complex policy in the making, one that would directly conflict with federal law.
cannabis here proved that ours is like any disruptive new business, in any So we gave tours of our facility to the regulators. We shared our insight. It was a second job for a startup struggling to keep up with massive demand, but we even wrote a research paper on production costs. (Hint: they're high.)
newly legal industry – it's messy, and The state-commissioned cannabis consultants didn't see a transition plan for medical cannabis, and instead advised Washington state to start the new recreational system from scratch. Where Colorado medical dispensaries, processors and producers were be allowed to bring over any products to the new recreational side, current medical operations in Washington state would be forced to work from the ground-up – if they were to take part at all. The differences didn't stop there. Our slower, more robust approach led to stricter testing and labeling requirements, specific driving-under-the-influence laws – now adopted by Colorado – and no forced vertical integration, just rapid market maturation ... like so many of the best new industries these days.
it takes time. Except we've been practicing patience on purpose. It's been more than a year and a half since Washington state voted Initiative 502 into law. The first producers received their licenses in March of this year, and the first few dozen retail stores are just scrambling to open right now. Our recreational cannabis won't hit those new adult-use shelves until late fall. For some – including our future customers lining up before dawn – that kind of slow rollout may look like failure, with regulators in over their head and growers spending too much time on R&D. But startups are never easy – particularly when they used to be illegal, and especially if you're trying to sell cannabis for a lot less than $30 a gram.
We launched our startup three years ago, after then-Governor
Christine Gregoire vetoed a bill that would have licensed and regulated the
production and distribution of medical cannabis much the way Colorado has done – which is to say, too fast. Had that law passed, Washington state
would have made a quicker
transition from medical to recreational stores.
Instead, the remaining law left our state with a fragmented system
that welcomed all actors. We became
the state's first commercial supplier of cannabis – for medicinal use. There were no testing requirements, no quality
control mandates, and little to no enforcement. The very notion of cannabis as
medicine, however, made cutting
corners bad business. The luxury of time – as opposed to, say,
Facebook's mantra of moving fast and breaking things – turned out to be a good
thing for establishing an affordable luxury product.
As Initiative
502 to legalize adult-use recreational
cannabis was gaining traction, the medical cannabis market here had become fractured. There were legitimate patients, and then
there were recreational users acting the part. There were dispensaries catering
to patient ailments, and then there
were those who refused to collect
taxes and used code names to
communicate.
It was a difficult place to be
legit on the way to legalization. But by November of 2012, voters agreed to continue the
experiment.
Then came the
regulators. Despite their best
intentions, it became clear that the Washington State Liquor Control Board had little clue about how to make sense of producing,
processing and selling cannabis. After all, there was no data and no precedent, other than the rushed and occasionally dangerous example of Colorado,
which recently added testing requirements in the wake of several deaths
associated with high levels of intoxication. And there was a complex
policy in the making, one that would
directly conflict with federal law.
So we gave tours of our
facility to the regulators. We shared our insight. It was a second job for
a startup struggling to keep up with massive demand, but we even wrote a research paper on production
costs. (Hint: they're high.)
The state-commissioned cannabis consultants didn't see a transition plan for medical cannabis, and instead advised
Washington state to start the new recreational system from scratch. Where Colorado
medical dispensaries, processors and producers were be allowed to bring over
any products to the new recreational side, current medical operations in
Washington state would be forced to work from the ground-up – if they were to take part
at all. The differences didn't stop there. Our slower, more robust approach led
to stricter testing and labeling requirements, specific driving-under-the-influence laws – now adopted
by Colorado – and no forced vertical integration, just rapid market maturation ... like so many of the best new industries these days.
It's been more than a year and a half since Washington state voted Initiative 502 into law. The first producers
received their licenses in March of this year, and the first few dozen retail stores are
just scrambling to open right now. Our
recreational cannabis won't hit those
new adult-use shelves until late fall. For some – including our future customers lining up before dawn – that kind of slow rollout may look like failure, with regulators in over their head and growers spending too much time on R&D. But startups are never easy – particularly when they used to be
illegal, and especially if you're trying to sell cannabis for a lot less than $30 a
gram.