Pot: Activity in Washington

When Washington passed Initiative 502 in 2012 there were not any numbers that described the current or future size of the cannabis market in the state. Some effort was made at estimating, and these guesses concluded there would be 1.3 billion dollars annually in cannabis sales, and a cap on retail stores was set at 334 stores state-wide.

There are currently 220 stores licensed and open in the state.

In 2015 the legislature passed laws that would capture and license the unregistered, unlicensed, and possibly illegal medical marijuana outlets, but no one knew how many there were, where they were, or how much business they did. Governments are now frantically working to inspect and license as many of these ‘ad-hoc’ establishments as possible, the goal being to have them fully licensed (or in work) by July 2016.

The state has determined that the original cap on stores should be raised from 334 to 556 state-wide to accommodate these shops. The bulk of these new (previously illegal) stores will be located in the Seattle-Tacoma-Everett areas.

The consultant doing the analysis came up with some interesting numbers (which might not be at all right):
Market share of the existing I-502 licensed retail shops is 35%, existing medical outlets have 37%, and the black market is estimated to be 28%. Or, the existing licensed and taxed stores account for about a third of the total size of the market in Washington.

Ostensibly, the state is attempting to achieve a doubling of the sales in stores by July 2016, even more if they capture a hunk of the black market, which is one of the main principles driving complete legalization.

Based on recent sales data from the licensed retail stores this could amount to 1.4 billion dollars a year, roughly twice that of Colorado. Yes, I know. These guesses are based on estimates and guesses with little data to rely on. And the state will have to scramble to license the newcomers; likely they’ll need an extension of the deadlines.

A lot of the 1/3 roughly estimated to be the size of the black market will be folded in as a byproduct of licensing the medical outlets, as I maintain that most of the black market is grown and distributed via the medical facilities.

I wish the Cannabis Board the best of luck.

Comments are closed.