By John Schroyer and Tony C. Dreibus
Recreational marijuana sales gain some significant traction in Washington State, Nevada’s medical cannabis industry approaches the launchpad, and Puerto Rico becomes the first island in the Caribbean to legalize MMJ.
Here’s a closer look at several notable developments in the marijuana industry over the past week.
Rec on the Rise
Washington State’s recreational marijuana industry, which has struggled under the burden of high tax rates and a slow rollout, appears to have finally turned the corner.
Revenues skyrocketed to nearly $25 million in April, roughly double the total from January and a 19% increase from March.
So what happened?
“Prices are going down,” said Aaron Varney, director of Dockside Cannabis in Shoreline, a suburb north of Seattle.
In the early days of Washington’s rec industry, which launched last July, prices were sky high because of a shortage of cannabis and the fact that only a few stores were open. That kept many consumers away.
The dip in prices to more reasonable levels has led to an increase in demand.
Varney – who estimates that prices have tumbled 30% in recent months – also attributed the rise in sales to several other factors, including additional shops that have opened in 2015, the big 4/20 cannabis holiday weekend last month, and a growing number of medical marijuana patients who are now buying from rec shops.
“I’d say there’s parity now” between medical marijuana dispensaries and recreational stores when it comes to price, Varney said. The average gram of cannabis at a medical dispensary ranges from $6 to $15, and many rec shops can either match that or have prices that aren’t much higher, he added.
There have been 49 new rec stores licensed in the state since Jan. 4, according to the Washington Liquor Control Board, for a current total of 153 shops, with 133 reporting sales. Ultimately, the state will license up to 334 retailers.
Add all that up, and it appears Washington’s recreational industry is starting to come into its own.
Almost Go-Time in Nevada
Nevada dispensary owners who’ve been waiting for state lawmakers to work out regulations on product testing received some good news this week: Laboratories can now start analyzing medical marijuana for pesticides, heavy metals and other impurities.
It’s a major step forward for Nevada’s MMJ industry, and it paves the way for the first dispensaries to open soon.
Just how soon is still anyone’s guess, however.
The state’s medical marijuana program manager told the Las Vegas Review-Journal that dispensaries can open once their plants have been tested, which means sales theoretically could launch in the coming weeks if everything goes smoothly.
But some dispensaries said they still have no idea when they’ll be able to open, as they’re unclear how the testing process will play out. And things rarely go smoothly in the medical marijuana world.
The state’s MMJ program is behind schedule, in large part because officials took much longer than expected to hammer out testing rules and give labs the go-ahead to move forward.
The delays have hammered testing labs, which sat idle for months while accruing staffing and overhead costs. Same goes for the companies that won the 55 dispensary licenses the state has awarded.
Hopefully this week’s development puts the program on the fast track.
MMJ in the Caribbean
Puerto Rico joined the medical cannabis club this week when the island’s governor issued an executive order legalizing MMJ for the U.S. territory, but there are still a host of questions swirling around how and when the industry may get up and running.
With 3.5 million residents, the island could be a significant new market for entrepreneurs ready to make the jump from the mainland.
The extent of the opportunities won’t be know for a while, as the country’s health department has three months to come up with rules for the use and distribution of MMJ.
Officials must still determine the list of qualifying conditions – which will ultimately define the size of the market – and make important decisions that will affect the business climate, such as whether to cap the number of medical cannabis businesses and allow out-of-state investors to participate.
The program could be strict: It appears smokable MMJ won’t be permitted, akin to rules that Minnesota and New York adopted. Puerto Rico’s system will likely focus instead on edibles, extracts, pills and other infused products.
Opportunities for support businesses have already materialized, though. The country is collaborating with industry consultants Quantum 9 and GrowBlox Sciences on how to produce and distribute MMJ, according to the Associated Press.
So even if Puerto Rico ends up with a small customer base, it’s move to legalize medical marijuana has already given some companies a chance to expand further.
John Schroyer can be reached at [email protected]
Tony C. Dreibus can be reached at [email protected]