Washington State Growers Finding It Hard to Survive

Business
Washington State Growers Finding it Hard to Survive

They thought they would have it easy, but after only six months of being in business, many retail cannabis growers in Washington State are wondering if they will survive to the next harvest.

After an initial delay, the Washington State recreational marijuana program finally came to fruition in the summer of 2014. However, due to license issues and bureaucratic red tape, the legal cannabis market opened to long lines, high prices, and, worst of all, a marijuana shortage. Some recreational dispensaries even had to close for long stretches because they had nothing to sell. Back then, it was definitely a seller’s market.

Fast-forward to today and the recreational cannabis market has pulled a complete 180. After a rather large outdoor growing season, the state is now seeing an overabundance of marijuana in the recreational market. This in turn has dramatically driven down the wholesale prices for recreational marijuana. Now the shoe is on the other foot, and it is a buyer’s market with the dispensaries firmly in the driver’s seat.

To date, there are about 270 licensed growers in Washington, however there are only about 85 recreational locations for them to sell to. State data shows that licensed growers have produced over 31,000 pounds of sellable cannabis, but due to the grower-to-outlet ratio, recreational shops have only been able to sell 20% of that. Many of the state’s cannabis users have stuck with much more consistent and far less taxed medical marijuana, or even the un-taxed black market, further slowing the process of moving recreational marijuana from off the shelves.

Washington does hope to open 100 new recreational stores in the coming months, providing additional outlets for the cash-strapped growers. But state officials are quick to point out (and rightly so) that like most states that have a large outdoor season, there will always be an overabundance of sun-grown marijuana after the crops are harvested each fall—and perhaps better long-term plans to be made by the growers.

Meanwhile, things are getting better, but overall still aren’t great. Legal marijuana is still quite pricey at the state’s recreational shops, with prices remaining steadily in the $23-$25 per-gram range. That is twice the cost of medical marijuana dispensaries, but still cheaper than it was a few months ago.