Latest legalization status?

Pot rules taking shape; public gets a taste of what’s ahead

State officials released proposed rules for a legal seed-to-store marijuana system that would allow adults to buy an ounce of tested, labeled pot seven days a week. But the draft rules are likely to be refined in weeks to come.
By Bob Young
Seattle Times staff reporter

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Steve Ringman / The Seattle Times

Different marijuana products in the display window of Northwest Patient Resource Center in West Seattle, a vivid sign of how mainstream the drug has become in Washington.


Steve Ringman / The Seattle Times

Brenton Dawber, a partner in Analytical 360, a Seattle laboratory, adds methanol to dried medicinal marijuana that is being analyzed so patients know exactly what's in their medicine. Pot sold for recreational use also will be subject to testing.


AP / Washington state Liquor Control Board

Here is the logo that will be used for labeling legal pot produced in the state.


Steve Ringman / The Seattle Times

Leslie Dancer, who works for the Northwest Patient Resource Center in West Seattle, scoops into a baggie medicinal marijuana that has been weighed to exactly four grams that will be sold to clients.



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Highlights of proposed rules
• The number and location of retail stores have not been determined, but stores could be open seven days a week, from 6 a.m. to 2 a.m.
• Residents and out-of-staters could buy an ounce of dried pot, the maximum allowed for possession. But they couldn’t buy hash and other concentrates.
• Pot could be grown indoors or in greenhouses with a rigid roof and walls.
• Growing operations are not limited in size or in number.
The draft rules will be posted on the Liquor Control Board website at www.liq.wa.gov.
The board wants input on the proposals by June 10. Email [email protected].
Source: Liquor Control Board

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Sure hope they are printed on 46 pages of hemp paper like the original constitution. ... (May 16, 2013, by greaterzinn) MORE


So what are the taxes on an OZ? Any estimates on the retail out the door$$....I'll bet... (May 16, 2013, by DrBigFoot) MORE


"Maybe she can find a way to allow the Indian Tribes to grow and sell Pot without... (May 16, 2013, by Dre037) MORE



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Washington residents and out-of-staters could buy an ounce of tested, labeled marijuana, seven days a week, up to 20 hours a day, in state-regulated stores under draft rules for a new legal-pot system released Thursday by the Liquor Control Board.
That rule is more permissive than in Colorado, the other state creating an adult recreational-pot market. Colorado lawmakers limited out-of-staters to buying one-quarter ounce in stores in an effort to impede “smurfing,” the practice of making repeated buys and aggregating pot to sell on the black market.
But Washington would not allow the sale of marijuana concentrates, such as hash or hash oil, unless they were infused in edible or liquid products. The high-potency concentrates have become popular to vaporize, particularly with younger users.
Washington’s 46-page raft of rules covers issues from product testing to growing licenses to advertising restrictions to package labeling.
The draft rules would allow sun-grown pot in greenhouses — with rigid walls, roofs and doors — but not open fields. And they would not initially cap the number of growing licenses issued by the state, in an effort to include smaller growers in a seed-to-store system untested on the planet. The rules would not cap processing or retail licenses either, for similar reasons.
Alison Holcomb, primary author of Initiative 502 — approved by voters last November to legalize recreational pot — said she was pleased with the rules’ balancing of public safety and health with the desire to create a workable system.
She noted that many rules seem to beg further clarification. “This is literally just a preview of where they are right now. And they’re intentionally doing this to give the public an opportunity to provide meaningful input,” said Holcomb, drug-policy director for the ACLU of Washington.
The state’s new system allows adults to possess one ounce of dried marijuana, one pound of pot-infused edibles and 72 ounces of pot-laced liquid.
Under proposed rules, the state would not track a person’s pot purchases, or know how many stores they visit in a day. But the state would require that marijuana be traceable as it is grown, processed and moved to stores.
Trying to stop smurfing makes more sense in Colorado than Washington, according to some. Colorado is more centrally located and states on three sides have strict laws against marijuana, said Christian Sederberg, a member of Colorado’s Amendment 64 Task Force. A law-enforcement group reported evidence that Colorado’s medical marijuana was diverted to 23 states.
Washington is different, with abundant weed in British Columbia to the north and Oregon to the south. “I don’t think someone will go to 15 stores and drive [the pot] somewhere,” said Randy Simmons, the state’s marijuana project director.
The requirement that greenhouses have rigid walls did not sit well with Jeremy Moberg, an Okanogan County activist pushing for sun-grown pot because of its environmental advantages.
Moberg said security should be focused on the perimeter of a sun-grown operation, not the greenhouse itself. Fully enclosed greenhouses become too hot in summer and should have fabric walls that can be peeled back for cooling, he said.
Growing pot indoors requires intense use of electricity that rivals that of data centers, according to a study published last year in the journal Energy Policy.
“I’d like to see more conversation around what security requirements are actually necessary, and whether or not we can’t have adequate security of outdoor fields,” Holcomb said. “Eastern Washington has fabulous territory for growing this crop.”
Liquor Control Board spokesman Brian Smith said the board would consider changing that rule if Moberg and others could show that greenhouses could be secured with a different approach.
Other proposed rules include:
• Uniform testing standards by independent accredited labs. Testing might measure moisture, potency and residues of pesticides and other chemicals.
• Consumers would know the contents and potency of products they buy from labels that would come with a stamp of the state’s silhouette decorated with a seven-point marijuana leaf.
• Advertising for retail stores would be restricted to one sign visible to the public, limited in size. Ads couldn’t be false or misleading, promote overconsumption or depict toys or characters especially appealing to minors.
• Backgrounds will be checked for license applicants and financiers. Certain criminal convictions, such as a non-marijuana felony in the last 10 years, would exclude applicants.
• Strict security and surveillance, as well as tracking systems for products, would be required.
The board also laid out a schedule of fines for violating rules, which could lead to a canceled license.
Pot entrepreneurs gathered at a West Seattle meeting of the Coalition for Cannabis Standards & Ethics to pore over the rules.
“Some of this added more questions, but that’s good, that’s what process is for,” said John Davis, the coalition’s director and a medical-marijuana dispensary owner.
Davis was not bothered by the ban on selling stand-alone concentrates, which he called “trendy with kids” and likened to beer bongs.
“I can understand them having that restriction because concentrates can be potent,” he said, adding that 95 percent of his dispensary sales involve dried pot and an older consumer demographic.
The board proposed prohibiting concentrate sales, Smith said, because they didn’t think it was allowed under I-502, which said usable marijuana amounted to flowers and infused products. The board is inclined to allow the sale of stand-alone hash, hash oils and concentrates, Smith said, “but it’s not going to break the law to do it.”
Holcomb said that may be an area ripe for further discussion and may need to be resolved by changing the law next year. Under state law, stores have to be 1,000 feet from the perimeter of schools, libraries, parks and other places frequented by youth. The draft rules do not specify the number of stores nor how they would be geographically dispersed. The rules only say the board will determine the number of stores in each county.
If there are more applicants than the permitted licensed locations, the state would conduct a lottery to determine who gets licensed.
The initial draft rules are not to be confused with the official draft rules, to be filed in mid-June.
The board issued draft rules now because it wants to vet the groundbreaking regulations before releasing formal draft rules, which can be more difficult to revise, Smith said.
Gov. Jay Inslee praised the board’s work and said it couldn’t do much more to allay concerns of the federal government, which considers all marijuana an illegal, dangerous drug.
“I don’t think you could design a system with much more integrity as far as tracking the product from the producer to the consumer,” Inslee said. “I think this plan has a robust system of control and checks in a variety of ways.”

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In Washington State, where voters in November passed a similar measure legalizing small amounts of marijuana for personal use, taxes will be levied in three tiers of 25 percent each on producers, processors and retailers. Those taxes were laid out in the initiative that voters approved, and will result in an effective rate for consumers of 44 percent, according to the state’s Liquor Control Board, which will administer marijuana regulations.

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A: Having all three licenses is not permitted under I-502. A licensee may hold both a producer and a processor license simultaneously. The initiative does not allow a producer to also be a retailer or a processor to also be a retailer.

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Puma327 said:

I don't know very much about the pot business, but I do know a lot about small business so everything I say is only pulling from my business background and not the marijuana market.

It seems to me there are two main issues around legalization: first, it's a way to remove, or lessen the black market by giving a legal option of production and access to the marketplace. Second, it provides income for the state through taxation. The issue as I see it is, these two positive outcomes are working counter to each other. The taxation rates are so high (pun) that the system will have little effect on the black market.

I may be wrong on some of these numbers so if anyone has better data (for WA), please speak up. Here is how I am looking at the business side of cultivation on the black market compared to the proposed system of taxation:

Black market pricing is $200 per oz. retail, $2000 per pound wholesale. So the grower has overhead (about 10% from what I can tell), and for the cost of growing and the indoor space and time requirements, it seems that $2000 per pound is a reasonable wholesale price. Anything less would require very large volume production to be viable. The dealer, selling oz's, is looking at having a 60% markup. Considering the lack of overhead for the dealer, this is a good margin and would seem to be accurate for standard market pricing. Normal retail has around a 100% markup but a large chunk of that markup is used to cover retail's high overhead. What this means is that even without extra taxation, a retail store would have issues competing on price with the black market.

If we use black market pricing as a base price of what the weed market will support, then legal operations would look more like this: $2000 per pound plus tax = $2500 wholesale. $2500 wholesale with a standard 100% retail markup and tax = $6250 per pound, or $390 per oz. retail. This pricing would seem to fit with what we see at dispensaries ($340-$380) and they don't have the extra 25% tax yet.

Back to the issue of how these two good intentions are working counter to each other. If the black market can offer the product at almost 50% less than the legal market, factoring in the effectiveness of the black market's ability to provide the product, who will be willing to pay $390 per oz when their dealer has been serving them for years at $200 per oz.? I fear that the state has taxed themselves into a corner and the legal market will not be able to compete with the black market. I suppose there is a segmentation that haven't been pot smokers, but who would like to try it because it's legal and they don't want risk. But still, for a long time smoker who has been navigating the risk for years, this is a moot point and with the increase in price, there is no reason for them to change there spending habits. In other words, the black market will, I'm guessing, stay the same after the legalization of production and delivery.

Would love to hear what others think.

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If we use black market pricing as a base price of what the weed market will support, then legal operations would look more like this: $2000 per pound plus tax = $2500 wholesale. $2500 wholesale with a standard 100% retail markup and tax = $6250 per pound, or $390 per oz. retail. This pricing would seem to fit with what we see at dispensaries ($340-$380) and they don't have the extra 25% tax yet.

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colonuggs said:

I don't know what store your getting your weed from but they are riping you off....$10 a g all the way up topshelf is what we sell 280 a oz....the reason medical is not taxed is the same reason your pharma isn't taxed...medicene.....they wont tax the mmj outlet....they will be taxing the mmj supplier/grower

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colonuggs said:

I don't know what store your getting your weed from but they are riping you off....$10 a g all the way up topshelf is what we sell 280 a oz....the reason medical is not taxed is the same reason your pharma isn't taxed...medicene.....they wont tax the mmj outlet....they will be taxing the mmj supplier/grower

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mustang519 said:

In my planning, I have assumed a $3 per gram profit. That will mean I have to get 5 to 6 from the retailer. Tax on $6 is 1.50 that I will have to pay. Retailer could sell for $8 a gram and the consumer will be paying $10. This pricing would get quite a bit of business and be competitive with blackmarket. May people would not risk buying from blackmarket if retail store have what they want. IMO Time will tell where this is going.

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mustang519 said:

Reef -- I have been planning to apply since the measure passed. Well ... I will say that I thought about it before that. I did not see anything in the rules that is a deal breaker but there is a lot that I don't agree with but will live with. There are also a lot of grey areas in the rules like testing and packaging. In Feb. purchased 10 acres in a rural eastern Wa. Construction of a large building has started and should be complete by mid summer. I plan to run an indoor operation year round 4k watts each in two flower rooms and a 2k veg room. Plan also includes solid wall greenhouses for next year. Although the state is not setting limits on plant numbers or the size of the operation I will stay under the federal limit for automatic minimum sentences. I should not have any trouble passing the background check because I already hold one state issued license that requires the same level of background check. I hope all the record keeping does not eat too much time. This will be a actual mom and pop operations with no outside help. I believe the limiting factor will be how much can mom and pop trim, ha ha, never thought I would say that. If all goes close to plan the goal is 50 pounds in 2014. I have so much work to do but we will get there.

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