My name is Sharon Whitson and I’m the General Manager of Seattle Event’s A Non Profit Corporation, the producers of Seattle Hempfest, Hempfest Business, & Hempfest Central.
Let’s talk about why I502 is faltering and instead of drinking the blame it on medical marijuana kool-aid we’re going to evaluate some facts.
First a history lesson. Medical cannabis was legalized by the voters via I-692 in 1998, 14 years before recreational cannabis. Medical cannabis began being a legitimate industry at this time. Our legislators where just too afraid to touch it via enacting regulation so they allowed the citizen’s initiative to be enacted but treated it like a green haired step child sitting in a corner that they didn’t want to see.
Mean while, the medical cannabis industry blossomed, with some jurisdictions, like Seattle supporting it, and others banning it. Despite Federal raids on people like the Kettle Falls 5, the industry persevered. Knowing they needed to be regulated and tired of being ignored by the state in 2011 the medical industry worked with both the Washington State House & Senate and passed SB 5073 that would regulate the medical cannabis industry.
Chris Gregoire, who was then Governor, afraid of the Federal boogie man, vetoed much of 5073 and instead of regulating the medical cannabis industry instead made it even more of an unanswered industry.
In 2012 the people over whelming voted to add recreational cannabis use to our legalization system along side medical cannabis. The voters did not vote to abolish medical marijuana. They voted to stop sending people to prison for a plant and to create a new system for recreational sales.
Right now 40% of Washington State Cities have enacted an I502 moratorium. This means they will not allow I502 to be implemented in their cities. Now I’m all for jurisdictions being able to enact their own rules but this also means the states needs to reduce its financial projections for I502 revenue by 40% – as only a maximum of 60% is achievable since 40% of the stores cannot even open.
This also means that under an I502 system, 40% of the states medical cannabis needs will not be met if medical is put under I502.
There are 330 possible I502 retail store licenses and we have 86 retail stores open. That’s only 26% and they opened at varying points throughout the entire year. This means that we should have expected less than 26% of the projected revenues thus far.
The high tax rates are helping keep the black market alive. The way to compete is to be economically competitive. That’s simple business 101. If your product is 3X the price of someone selling a similar product, your sales are going to be limited.
Medical Marijuana is not the black market. According to the Washington Department of Revenue’s report to the Coalition for Cannabis Standards & Ethics, medical marijuana dispensaries contributed $832,000 in sales taxes in October of 2014 alone.
Medical Marijuana businesses, like all others, have Washington & City business licenses and pay Washington B&O as well as City taxes. Those figures are not included in the $832,000 one month total.
They hire employees. They pay employment taxes and their employees pay taxes. They rent buildings, they buy some too! Running a business is expensive. The medical marijuana industry has been contributing to the communities and coffers of Washington State for over a decade.
Colorado is flourishing as it started it’s recreational market from its existing medical market. Instead of taking this common sense approach, Olympia decided to give it to the Liquor Control Board – who the people had recently voted out of controlling liquor sales – to recreate the wheel. To compound it, they create a blind lottery vs a merit based application acceptance system. This means that anyone who could complete the application and pay $250 could be chosen to participate in I502 even if they didn’t have the money or business plan it require to operate. This is why you only have 26% of the retail stores open. If we’d of had a merit based system you could bank on us being at our 60% maximum rate – remember it’s only 60% due to the moratoriums.
Why not create a path for I502 producer/processors to sell into the medical market?
Why would you turn to the newly created Recreational system for advice on Medical Marijuana – oh yeah, your protecting financial interests instead of the interests of the sick. Why else wouldn’t you turn to an organization like the Coalition for Cannabis Standards & Ethics or the Washington Cannabis Commission to gain insight since? Expertise in medical cannabis is being ignored like it doesn’t even exist and hasn’t been here all along!
Astronomical tax rates, moratoriums, & a non-merit based selection process are what’s plaguing I502 forecasts, not medical marijuana.
Please don’t drink the blame it on medical marijuana kook-aid. Instead let’s work with our legislature to strengthen I502 and create separate regulation of our already vibrant medical industry.
You can read more about contacting your legislators in both Washingtons here
