Policy

Washington's High Hopes for Legal Pot Sales Start Small


Cannabis City in Seattle

Photograph by Ted S. Warren/AP Photo

Cannabis City in Seattle

Washington state, home of Starbucks (SBUX), may have invented the complicated coffee order. When it comes to pot, the state is keeping it simple.

Concerned by reports in Colorado of kids sickened by marijuana-infused candies and chocolates, Washington officials say so-called “edibles” won’t be available as the state today becomes the second to legalize recreational pot sales. Washington is also going slow on licensing, so far allowing only 25 of 334 planned stores, including just one in Seattle, with its 652,000 residents.

That store, Cannabis City, expects as many as 2,000 people to line up for 2,263 baggies of pot, each containing 2 grams. For now, it’s the only weed the store has to sell; many of the state’s growers have yet to harvest, says manager Amber McGowan.

Seattle’s first pot shop, in an industrial district south of downtown, is no Starbucks. It’s on a busy six-lane road on which trucks frequently rumble by, and it has no off-street parking. The store’s name is in small print above the mailbox. Under state rules, cannabis can’t be displayed in windows and the stores can’t be near schools, playgrounds, libraries, or parks.

“This spot was really a terrible spot, but it’s cheap rent,” said owner James Lathrop, who previously ran a bar. “Most of my costs have been in making it beautiful.”

Inside, glass jewelry cases once used in a Sears (SHLD) department store display pipes and bongs. The bright lights and wood laminate flooring call to mind an optometrist’s shop in a mall, except for the cash machine next to the register. There’s no place to comfortably sit; pot can’t be consumed on the premises.

Washington voters approved legalization in 2012. One reason it has taken so long for sales to begin is that unlike Colorado, which used existing sellers of medical marijuana, Washington built its recreational business from scratch. An effective pot tax rateof 44 percent is keeping prices high. At $20 a gram, the price at Cannabis City is about double that in the black market.

Meanwhile, the slow roll-out is limiting the state’s tax receipts. Washington says it may take in $586 million over four years starting in July 2015—a fraction of the $1.9 billion state officials estimated before the vote.

Colorado, which began recreational sales in January, has also fallen short, collecting an average of $2.7 million a month, less than half of estimates last year.

Stores in Colorado have sold chocolate bars, peanut brittle, lollipops, and even ice cream infused with pot. The death in March of a 19-year-old college student who fell from a balcony after eating a pot cookie led officials to consider requiring smaller doses and new labeling rules.

In Washington, one entrepreneur was gearing up to sell a cold bottled beverage infused with coffee and cannabis: the “wake and bake drink.”

The state liquor board, which regulates the industry, says it’s still weighing packaging and labeling for edibles. None has been approved yet.

“For variety’s sake, it’s kind of a bummer,” says McGowan, the Cannabis City manager.

Robison is Seattle bureau chief for Bloomberg News.

Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Companies Mentioned

  • SBUX
    (Starbucks Corp)
    • $78.9 USD
    • 0.25
    • 0.32%
  • SHLD
    (Sears Holdings Corp)
    • $39.43 USD
    • 0.78
    • 1.98%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus