How Has Cannabis Legalization Changed Washington’s Landscape?

November 28, 2016

Washington State has certainly been a trendsetter in the reformation of cannabis legalization laws. During the most recent election, eight states had propositions to legalize adult-use or medical cannabis. Arkansas, Florida, and North Dakota voted to legalize medical cannabis, while California, Maine, Massachusetts, and Nevada voted to join Washington State by legalizing adult-use cannabis for adults 21 years old or over. The only hold-out was Arizona, a state that already legalized medical.

It's now been four years since Washington State voted in favor of legalization and ushered in a new era. Initiative 502 allowed for the licensing and regulation of cannabis production, distribution, and possession for adults over the age of 21, while ending the long time state-law criminal and civil penalties for which it authorizes.

So how has legalization changed the landscape?

Revenue is Growing

Money makes the world go round, so it’s no surprise one of the most widely followed trends was how legalization would impact revenue. Here’s how it breaks down:

In July 2014, a paltry 337 pounds were produced. More surprisingly, of that, only 175 pounds were sold. Fast forward to July 2016, and the numbers increased dramatically: 13,381 pounds were produced with 11,615 pounds sold.

How does that translate to revenue?

Total sales in Washington for 2014 reached $49 million. Each year since, revenue numbers have grown impressively, reaching $486 million in 2015 and $885 million in 2016.

Tax Revenues Continue to Grow

Washington’s original tax scheme posed problematic as they levyied a 25 percent tax on sales from producer to processor, processor to retailer, and retailer to consumer. In July 2015, Washington simplified the tax framework by applying a 37% tax only at the time of sale to consumers.

The state of Washington pulled in $16 million in excise taxes in 2014, $129 million in 2015, and $205 million in 2016. With the growth in tax revenue, Washington implemented a revised tax revenue distribution plan for fiscal years 2015-2017 (dispensing $12 million to cities and counties across the state).
Washington Raises the Cap on Retail Outlets.

The Washington State Liquor and Cannabis Board had initially set the cap of retail outlets to 334, however the number recently increased to 556 due to legislations allowing dispensaries to transfer over.

Impact on Teen Usage

Interestingly, teen cannabis use in Colorado hasn’t changed since that state legalized. However, in Washington State, reports of teen cannabis use has climbed modestly since 2012. The good news, however, is that alcohol and tobacco use has declined. Likewise, fewer youths are getting caught up in the justice system as schools and communities are dealing with youths “in-house” rather than treating the issue as a law enforcement issue.

Cannabis is Safer

Clearly product safety is always a concern. When the State first legalized recreational cannabis, there were no pesticide testing requirements. Now the WSLCB and Washington State Department of Agriculture have oversight on regulating chemicals. To date, there are 271 pesticides approved for use. And, in order for any cannabis product to be labeled organic, it first must be verified by the Department of Agriculture.

Knowing what the consumer is buying is extremely important when dealing with any product. Education sampling allows bud tenders to get educational samples from processors in order to educate consumers on specific products sold in their location. Though limited to 100 education samples a month at each location, this initiative gives consumers the ability to make choice decisions on what they are buying.

Medical Cannabis Underwent Major Changes

Perhaps one of the biggest changes in Washington happened within the medical cannabis program with the passing of Senate Bill 5052. This bill merged the medical cannabis program with I-502. The “friendly” merger imposed restrictions on the rights of patients to grow, however the new rules allow up to four patients to form cannabis growing co-operatives with a max of 60 plants.

Patients are now incentivized to register for a database (which is unpopular among many patients). By registering, patients get a higher possession and purchase limit.

One of the other controversial provisions (because of cost) has been the requirement that dispensaries offering medical cannabis must have a trained and certified staff member that can assist patients. Dispensaries must pay for the training. The Department of Health supports the training, providing education for medical cannabis consultants.

Alternative news outlet, The Stranger, penned a highly critical article — “How Washington State Screwed Over Its Medical Marijuana Dispensaries" — which offers more scathing criticism over the changes.

Budtenders Can Now Receive Tips for Good Service

Good budtenders take time to educate consumers about the products they offer. As such, many have argued that budtenders (like waiters and other service personnel) deserve to be tipped for their service. However, due to concerns over price manipulation, the Washington State Liquor and Cannabis Board (LCB) had banned bud tenders from receiving tips. That’s now changed as the Deputy Chief of LCB released Bulletin No 16-02 stating bud tenders are now authorized to receive tips due to recent changes regarding sales tax.

But, perhaps the best change since legalization is that prices for consumers have plunged! While tax revenues have been filling public coffers, the price of a gram has dropped (a lot). As of March 2016, the average price of a gram was $9.32 (wholesale price was $2.99). Contrast this number to September 2014 when cannabis was selling for $25 per gram.

For a more comprehensive overview of how cannabis legalization has impacted Washington State, check out the Washington State Marijuana Impact Report.


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