Weekly Wrapup: Marijuana Market Numbers + Puzzling Choice for WA Cannabis Consultant?

Image for wrapup of medical marijuana news
By Chris Walsh

Medical cannabis is often portrayed as one of the fastest-growing businesses in the United States, an industry experiencing exponential growth as it churns out overnight millionaires at a rapid clip.

This romanticized view of the industry isn’t exactly accurate – at least over the past two years – but the future does indeed look bright.

Last week, MMJ Business Daily released market estimates for medical cannabis sales via dispensaries. According to these estimates – compiled by examining the marijuana industry on a state-by-state level – MMJ sales actually declined by $200 million to $300 million last year, coming in at $1.2 billion-$1.3 billion (you can access the full report here).

Not exactly the Green Rush you hear about so much in the media. But here’s the good news: MMJ Business Daily estimates that the industry should recover this year – climbing to $1.5 billion – based on an improving climate for medical marijuana in many states, continued growth in some areas and the emergence of several new markets.

And the general cannabis industry could really hit its stride in 2014, fueled by the opening of retail marijuana stores in Colorado and Washington and dispensary openings in Massachusetts, Connecticut and other states. MMJ Business Daily predicts the industry will grow by 10-15% annually from 2015-2017 and then balloon to as much as $6 billion in 2018 with more states legalizing medical and recreational marijuana in that period.

These figures could of course change drastically one way or the other depending on multiple factors, as this is one of the most unpredictable, volatile industries out there. But the overall growth trend should hold up, which is great news for anyone operating a cannabis-related business or hoping to in the near future.

Also last week, we broke the news that Washington State has selected a Massachusetts company called Botec Analysis Corp. as the finalist for its cannabis consulting contract.

The choice puzzled a lot of industry professionals, primarily because Botec is a think tank specializing in crime and drug policy rather than the business end of MMJ. Botec, however, assembled a team that includes subcontractors with expertise in a variety areas, including cannabis testing, quality standards and rulemaking. You can see more details of the individuals and companies involved here.

Washington officials initially stressed that a big part of the consulting gig would involve coming up with estimates on the potential size of the recreational cannabis industry in the state. So on that end, the choice makes sense.

Brian Smith, communications director for the Washington State Liquor Control Board, told MMJ Business Daily that Botec was the “clear winner” in each of the main categories (product and industry knowledge; product quality standards and testing; product usage and consumption validation; and product regulation).

“Between the industry knowledge Botec brings together with the research we’ve done, and the public outreach since November with Washington’s marijuana industry members, we’ll have what we need to craft Washington’s system of legal marijuana,” Smith said.

But it’s interesting that some of the biggest names and most knowledgeable players in the business side of the cannabis industry (including consultants) aren’t involved, at least at this point. Judging from the selection of Botec, Washington’s recreational cannabis model might not be as business-friendly as some had hoped and could lean toward very heavy regulation.

Other top stories in MMJ Business Daily last week:

Q&A with Abattis CEO on Canadian Company’s Expansion Into US Market

California Considers Comprehensive Regs on MMJ Industry

Proposals to Legalize, Legitimize Dispensaries in Oregon, Nevada

7 comments on “Weekly Wrapup: Marijuana Market Numbers + Puzzling Choice for WA Cannabis Consultant?
  1. I agree on

    It was very surprising to see the choice for WA. Disappointing to say the least. The main guy sounds like a lobbiest for the anti cannabis industries.

  2. Kayvan Khalatbari on

    Gross choice for the WA team. The good news for Colorado is that it will persist as the model for the country in medical and social MJ while Washington will probably become an overly regulated and tight market that will be dominated by big business and non-industry interests.

  3. Tom Lynott on

    Think tanks are not what make good policy when a wealth of real world experience is abundantly available. Colorado just leaped far ahead of Washington in a bright new business where many jobs are being created.

  4. Derek Lebahn on

    I’m a little disappointed at not being included in Washington’s group. We are the official testing company of High Times, the only testing company working nationwide, and leading the industry in CO. Even Steep Hill looks to us in determining what the trends in testing cannabis can and will be.

    That aside, I tend to agree with previous posts in that Washington is setting themselves up for over-regulation. As a decision maker with influence on multiple companies and their direction, I have informed my associates that we need to hold off expanding into Washington at this time. Outside of Seattle, WA is extremely conservative. I was born in Spokane, and have family all over the state. There is still a negative stigma in Washington State as far as cannabis is concerned.
    Colorado has done well in establishing it’s medical marijuana industry first, before going recreational, while WA has had many issues federally with MMJ centers being forced to close and raids taking place. I just don’t believe that it will be a viably sustainable or profitable market in Washington for years to come.
    Washington may spend tens and hundreds of thousands of dollars on think tanks and consultants who don’t actually make things happen and have little experience in the real world application of this emerging industry.

    It’s fun to come up with numbers that blow people’s minds and instill a feeling of confidence to even the most staunch nay-sayers. But when things are all said and done, these numbers have to be made into jobs for people, a sustainable industry that operates inside of a healthy economy and most importantly safe, fair priced products that each market state is able to benefit from. Nothing will disappoint our industry more than seeing the upper echelon elites of the highly effected tobacco and pharmaceutical companies turn around and benefit from our hard work and fighting the good fight.

    If and When Washington does give the green light for shops to open their doors, it will be interesting to see the rise, fall and stabilization of the market. There are not as many people in Washington State as investors would like to hope. Also, being from the NW originally, I can tell you, there is no shortage on cannabis being grown in your neighbors back yard.

  5. Harry Burns on

    One only needs to look at the way WA State Liquor Control Board has dealt with alcohol and tobacco to get an idea of their likely approach to cannabis. WSLCB is a strong enforcement organization – it does not have a history or culture of tolerance. Leaders at WSLCB may crap their pants when they see tens of thousands of underage kids toking up freely and openly in Downtown Seattle this August for Hempfest. An event like Hempfest with alcohol instead of marijuana would be intolerable to WSLCB.

    I hope BOTEC will help WSLCB navigate the nuance and irony of its situation. The approach of BOTEC’s founder appears logical and directed at defining balanced policies delivering the greatest good for society.

    BOTEC is the type of organization that this government agency is comfortable working with. I don’t think there was ever a snowball’s chance in hell that WSLCB would select an established pot dealer, grower, or “official” testing company for High Times. This shows a great lack of understanding and appreciation for how government entities like WSLCB operate.

    I hope BOTEC will provide WSLCB clarity on what should be its job, priorities and success criteria. I would love to see Washington state develop a regulatory model that other states can adopt. Unfortunately, that would require WSLCB to act differently than in the past. It will be a significant hurdle and challenge for them to overcome.

  6. chris on

    Being a dispensary owner and dealing with the state I can clearly see that the plan of Washington State is to make regulations so difficult and expensive that only millionairs will be able to participate. I predict that they will purposely sabotage early suckers I mean adopters to fail with heavy taxes. Currently we calculated that for a $320 ounce sold to consumers $160 goes straight to taxes leaving the grower, processor and retail owner to divi up the other $160. There is no way to make money the way the current system is set up and you would be wise to wait before entering this market.

  7. The Yeoman Farmer on

    We need a reality check here.
    WA ST WSLCB has a history of being pro-business. When probation ended, WA led the way issuing production licenses. The law of competition won out. By the end of the first year ½ of the producer s had went out of business.
    Under WA ST Law, for the first 2 years of the life of any public voted referendum, any changes must have a supermajority vote of (2/3) of state lawmakers in order to make any changes to the
    Law, as passed by The citizens. WA ST has a history of follow what the spirit of the law intended.

    As a longtime WA resident, MMJ producer, political activist and a concerned citizen who attended the public comments forms held by the WA St LCB, The number one concern expressed by attendees and was also the main focus of the referendum was to encourage small grows unlike the Colorado laws that encouraged large corporations and locked out the small grower.

    Look at it this way; who was the one that paid the price in liberty and treasure in order to end the draconian cannabis laws? The people. Who was the one who encouraged the status quo? The corporations. Now the corporations want to turn modern day growers into modern day sharecroppers.

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