Welcome back everyone for a brand new year: 2015! Its crazy to think that just over a year ago, Colorado opened it’s first recreational marijuana shops. And since then, Washington has followed with the beginnings of its’ legal retail industry, while Alaska, Oregon, and Washington D.C. has voted to join the party. Imagine what everything will be like another year from now? But before we do that, we still have a year to live so let’s do it! Let’s hope there is a pot shop on every street corner in 12 months time!
3 recreational marijuana questions for 2015:
Will all recreational marijuana stores be open this year?
With marijuana legalization being different in every place you go, it can be hard to know what’s going on for dispensaries. At the moment, all the new and growing dispensaries are having to look into resources and tools like POSaBIT that can help them improve their customer service, all while having to worry about staying within legal guidelines and following legislation. So, the answer to this is a complicated one for both dispensaries and customers, depending on where you are.
If you asked us this question a couple of months ago, we would have thought: of course! But here we are, about 6 months since Cannabis City became the city’s first marijuana store to open its’ doors, and we only have eight legal retail shops that are open. Nine, if you include Ballard’s Herb’s House, a medical marijuana dispensary that just passed the recreational inspection last month and will be converting to a legal outlet soon. Even if physical stores aren’t quite open, you will still be able to purchase weed online from websites such as https://theherbcentre.net/buy-weed-online-vancouver/, which many people view as being much easier than purchasing in person.
It took six months for eights stores to open. At this rate, we should have all Seattle pot shops up and running by the end of the year, but that is barring any setbacks such as failed inspections, financing, or any other hurdles the cannabis retail outlets may face. In addition, the Washington State Liquor Control Board may hold a do-over in April to allow over 900 shops a chance at a retail license. This may increase the number of shops in the city and the chances that we see openings into 2016. It seems that marijuana is becoming increasingly more acceptable, people can easily buy things like tuna kush, so it makes sense for more pot shops to be opening.
Will the tax issue be confronted that is setting the industry up for failure?
One major complaint of customers as they exit a recreational weed shop is the enormously high retail tax that they just paid. But tax issues isn’t just affecting the customers, it’s affecting everyone including the legal retail shops, the growers, and the producers. In fact, if this tax issue is not dealt with, it could have a crippling affect to our industry and even the prospects of national legalization. After all, we have chosen ourselves to set an example. This is what James Lathrop, owner of Cannabis City, wrote us last month:
In Washington marijuana products are taxed at a multiple compound rate: That is 25% from the grower to processor, plus 25% from the processor to the retailer, plus 25% from the retailer to the customer [each of these levels of tax pay tax on the previous tax], plus another 10% of regular sales tax, city tax, and B&O [which includes taxation of the excise tax itself]; then there is an additional Federal tax of another 25% [that is a fed 35% tax on the ~70% gross profit [gross after cost of goods] falling out at about 25% of gross – including Federal taxation on the State excise tax itself.).
So on the retailer side alone that is ~60% of the product in pure tax, with ~30% going to to cost of goods and ~1-5% left to actually run the business; the growers and processors are in a similar situation.
All cannabis businesses in Washington are set to fail under this unreasonable and compound tax structure; many will fail, some will survive; but none can exist under this tax structure for very long.
What effect will the Oregon recreational marijuana industry have on ours?
Last November, Oregon voted to become the 3rd state to legalize marijuana. This makes Washington and its’ neighbor to the South, the first bordering states to legalize the plant, which brings up some questions:
1) Vancouver’s recreational marijuana shops have seen some phenomenal sales, especially New Vansterdam. After all, the town is conveniently located about 10 minutes from Portland. We are not sure if Portland will see its’ first store open this year but if it does, we wonder if it will have some effect on Vancouver recreational store sales? From what we here, there is a healthy number of Oregon residents crossing the border to visit the legal pot shops. In addition, will Portland see an increase of Vancouver residents crossing the border to purchase cannabis to save money because the tax burden is less?
2) When Oregon allows marijuana legalization to happen on the first of July, residents of the state will be able to grow their own plants within the confines of their home. Oregon and Alaska will be the 2nd and 3rd state to practice this along with Colorado. Are we going to continue being the stubborn mule or allow our neighbors to the South to plant the seed and help us reconsider?
Two industries, side by side, in the same region. What better way to observe to see what is working and what isn’t. We should take this opportunity and do just that. Work together to make the local marijuana industries a success.
What recreational marijuana questions do you have for 2015?
