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The Maturing Marijuana Industry in the State of Washington


September 17, 2015 by Jim Doherty
Category: Marijuana

The Maturing Marijuana Industry in the State of Washington

Have you checked the sales figures for licensed marijuana retailers recently (or ever)? Each Wednesday the state Liquor and Cannabis Board (LCB) updates and posts its “Weekly Marijuana Report,” providing statistics on monthly and yearly totals for pounds harvested, licenses issued, and the number of licensed marijuana businesses and their locations, taxes due, etc. The numbers are heading up.

But keep in mind that these number increases do not necessarily mean that substantially more marijuana is being consumed in the state than before legalization. What it mostly signifies is a shift from the use of unregulated and untaxed marijuana to product being sold at licensed retailers. The only way we will learn, for sure, about the impact that legalization has had on consumption is from solid statistical studies and surveys, and that might take a while.

One crucial piece of those statistical studies will focus on marijuana use by minors. Will legalization result in increased use by minors, or not? Will the availability of licensed marijuana actually result in more people using marijuana? For example, how many adults will switch to using marijuana rather than drinking beer when sitting at home and watching a Seahawks game with friends and family?

But let’s get back to those retail sales figures. The daily sales in the state have grown to two million dollars per day – almost quadrupling since the beginning of the year. That growth is not surprising given the steady growth in the number of licensed retail stores – 166 retail stores have reported sales. And, the LCB has authority to increase the licensing of producers, processors, and retailers to meet the increasing demand of the marketplace – up to a current limit of eight and a half million square feet of plant canopy. Prior to the adoption of I-502 there were guesstimates regarding how much marijuana was being used in the state; now we will have verifiable figures for all sales from licensed stores.

Another indication of a maturing market is the increased marijuana marketing that is being seen across the state. In the Seattle area, at least one licensed marijuana producer is using billboard advertising. The company wants to project an image of a successful business selling quality product, and they want consumers to ask for their product by name when they shop at a licensed retailer. Marijuana producers are competing for shelf space at the stores, and they want the loyalty of consumers who will stick with their brand.

Producers, processors, and retailers are also using print advertising, social media, and web advertising to reach their primary target consumers, young adults. If you aren’t in that demographic, you probably aren’t seeing much of that advertising. Some advertising is now appearing in local newspapers – particularly in alternative newspapers like The Stranger in Seattle  - and that will increase. Keep in mind that, while local governments can prohibit the siting of marijuana businesses within their jurisdictions, they cannot prohibit marijuana advertising.

But what about the rules regulating advertising? Didn’t I-502 and the State Legislature restrict advertising by these licensed businesses? Yes and no. Retail stores are restricted to two relatively small signs on their stores (it used to be one), and there are significant restrictions on off-premises signage near schools and parks, etc. For details on what is and what is not allowed as far as marijuana advertising,  see the LCB’s comprehensive Q & A web page on the topic. [A potentially significant qualifier to the above statements on advertising and signage restrictions is presented by the recent U.S. Supreme Court decision, Reed v. Town of Gilbert. A cautionary article regarding the possible far-reaching implications of that decision appeared recently in The New York Times.]

If your job requires that you keep abreast of issues involving the marijuana industry, I recommend that you sign up for the LCB Listserv. You will receive timely notifications of proposed rule changes and other important notices. And, our webpage, Recreational Marijuana: A Guide for Local Governments, will also help you keep abreast of developments in this ever-evolving issue. Finally, I highly recommend reviewing the recently-released I-502 Evaluation Plan and Preliminary Report on Implementation. This 54-page report was prepared by the Washington State Institute for Public Policy, as required by RCW 69.50.550. It contains numerous exhibits, with data on the locations of licensed marijuana businesses, sales, youth use of marijuana since I-502 enactment, and other interesting information. That report is required to be updated in 2017.

About Jim Doherty

Jim has over 24 years of experience researching and responding to varied legal questions at MRSC. He is the lead attorney consultant and has special expertise in transmission pipeline planning issues, as well as the issues surrounding medical and recreational marijuana.

VIEW ALL POSTS BY Jim Doherty

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