After being one of the first states (along with Oregon and Alaska) to legalize medical marijuana in 1998, after only California (1996), Washington lost control of the reins and could not do anything except witness the development of a highly unregulated cannabis industry. For some, it was a beautiful time; for others, a cutthroat business. But almost everyone was unprepared for what was to come more than a decade later.
When Washington voters passed Initiative 502 in 2012 to legalize recreational cannabis, state regulators made a commitment that everyone who applied and qualified for a producer license would get one, but capped the number of retail licenses. This turned out to be an attempt to bring in the state’s gray market cannabis growers who operated as caregivers with patients registered directly with them.
The result made Washington’s cannabis market unlike any in the country: Licensed growers outnumber dispensaries by a ratio of nearly three to one, according to recent data from 502data.com.
With production outpacing demand, retailers in the Evergreen State rarely worry about a lack of supply. Producers, however, often find themselves scrambling to get their products on store shelves and reducing wholesale prices before their wares become unsellable. Most producers barely turn a profit, and some consider breaking even a good year.
Jade Stefano, owner and operator at Puffin Farm, an outdoor cultivation business on the outskirts of Ellensburg, knows these tribulations all too well. Her operation, situated east of Mt. Rainier, has only closed two months with sales over $100,000, although the company did come near that mark on several occasions, Stefano says.
To read the full article in Cannabis Business Times‘ February issue, click here.
Top photo by Jake Gravbot