Washington State has been reaping the benefits since the legalization of recreational marijuana. Since legalization in 2014, the state has raked in over $ 1.3 billion in sales. Within the past two years, banks are willing to participate in the marijuana business—the numbers started at 51 in March 2014 then jumped to more than 300.
In the first half of 2016, people spent $ 54.8 million on alcohol than marijuana. In the second half of 2016, the two products were even at $37 million. Marijana sales in the second half totaled to $212 million. In July, sales at shops rose to $66.6 million in the third quarter to a total of $278.6 million.
Other states want to reap the benefits of legalization; the latest reports indicate the legal weed business shows no signs of stopping as it builds up to a multibillion-dollar industry. Washington’s tax on marijuana is 37 percent. Of the $1.3 billion in cannabis sales, the state has generated over $350 million in tax revenue.
Pulling in Green With Green
Changes to Washington state’s marijuana industry will push annual sales to $2.4 billion in the year 2020. The market in Washington is evolving, and the legal market is beating out the underground markets.
Washington has tweaked the system of their legal pot business, including combing the medical marijuana into the recreational side of operations. This change has boosted the number of recreational retail licenses allowing them to choose between selling for recreational use or obtain a medical marijuana endorsement.
The endorsement allows them to sell to registered medical marijuana patients who must pay the 37 percent excise tax but do not need to pay the 9.6 percent sales tax that recreational users also pay. To receive a medical endorsement, retailers need to have at least one certified medical marijuana consultant as well as a portion of the store dedicated to issuing medical cards to patients.
For low-income patients that need assistance with acquiring their medicine, The Washington CannaBusiness offers a new charitable effort. The program plans to be operational in the first quarter of 2017. Patients seeking assistance can fill out forms available online or at WACA member’s retail locations.
Predicted marijuana sales will be up to $ 2.4 billion in the year 2020. Sales in the adult recreational market blew past predicted expectations. In 2014, the average monthly sale was $ 10.8 million. By 2015, the monthly sale increased to $ 51.2 million. In 2016, the sales skyrocketed to more than $ 111.6 million. The market is expected to hit its peak again in 2017.
What’s Next for Washington?
Even though Washington state has been successful in the weed business, there is concern about the incoming administration of President-elect Trump and his favor of officials with stern views on marijuana.
One official in question is Alamba Sen. Jeff Sessions who will be the new Attorney General. “Senator Jeff Sessions has been the single biggest opponent to marijuana legalization in the U.S. Senate, according to drug policy staff under Clinton and President Bush,” former Washington state Attorney General Rob McKenna told Seattle’s Morning News.
“It is possible he will take a hard-line law-and-order approach and assert federal preemption over those state laws.” “The other consideration is the fact that more than half of the states have legalized medical marijuana, and a growing number are legalizing recreational pot,” McKenna said. “So is this the fight they really want to have? He’s got to decide what his priorities are and whether the fight is worth it.”
Despite the fear of the future, one Washington retail owner is not worried. Eisenberg is a managing owner of Uncle Ike’s, a Seattle pot retail shop that has three locations spread across Washington. “My bigger concern is that we operate under what is called the Cole Memo,” Eisenberg said.
The Cole Memo was issued in August 2013 by the Department of Justice. It allows states operate their legalized markets without the interference of the federal government. The states must ensure marijuana was not in the hands of minors nor smuggled over to border states where it is illegal. The Cole Memo allows recreational marijuana shops to operate as a regular business. Banks do not work with industry, so credit unions are used instead.
“I do not think there’s a lot of political capital in cracking down on pot,” he said. “I don’t know what Trump would gain by cracking down on cannabis. The country is pretty evenly split now (on marijuana legalization) and the popularity is rising. Moreover, Trump and the Republicans talk about states’ rights. Well, letting states’ do their own thing with pot is a pretty good example of a state right.”
Washington state is a booming area for the marijuana industry. The state set a record in the first quarter of 2016 as marijuana outsold alcohol. Various medical marijuana outlets were shut down over the past year, but those customers are likely pumping more money in the recreational business. Seattle is the top selling city in Washington raking in $114.5 million and paying $38.8 million in taxes. The top selling marijuana shop is Main Street Marijuana which took in $28.6 million.
Even with all of the financial income, Washington is evolving into a single cannabis market since the merge between recreational and medical marijuana. The previous market was unregulated; earlier this year Washington had an estimated 800 to 1,200 unregulated and unlicensed dispensaries serving 100,000 to 125,00 patients.
The new medical clients have the potential to drive up sales in the recreational market. Many patients are becoming the new audience in the rec market, and retailers must understand their new clients to cater to their individual needs.