When Logan Bowers opened his marijuana retail store Seattle Hashtag in April 2015, he entered an arena far different from his tech-industry background.
Bowers, co-owner of Hashtag and president of the Cannabis Organization of Retail Establishments (CORE), had the same task as other marijuana license holders in the state: bring an industry relegated to street corners and sidewalks into a legal and regulated retail environment.
“We get a lot of local traffic,” Bowers said. “A lot of folks kind of walking by who are like, ‘What’s this about?’ And they come in and checked it out and realize we’re just a normal business.”
Since the voter-approved Initiative 502 — which earned 56 percent of the popular vote in November 2012 — was implemented, the state Liquor and Cannabis Board has issued more than 1,000 licenses to retailers, producers or processors of marijuana under the I-502 system. The LCB issues up to a dozen new licenses each week.
“This is not like selling milk,” said Brian Smith, spokesperson for the LCB. “This is selling a product that is illegal at the federal level.”
Smith said that after a few years of uncertainty over how the state would navigate legalization, it has become a robust industry.
“It’s only going to continue to grow,” Smith said.
The next step in the process in the eyes of lawmakers, the LCB, and marijuana license holders, is the decline and elimination of illegal sales of marijuana in the state.
A 2015 report by the BOTEC Analysis Corp. found that, at best estimates, 28 percent of marijuana sales in the state happen illegally. The corporation is a California-based research and consulting firm that develops policy solutions on crime, justice and drugs.
A late bill this legislative session by Rep. Chris Hurst, D-Enumclaw and Rep. Cary Condotta, R-
Wenatchee, is trying to combat the black-market sales of marijuana in the state, and has been retained in its present status since the Legislature entered special session on Friday.
House Bill 2998 would reduce the state tax on marijuana from 37 percent to 25 percent, and would preempt municipal ordinances and regulations that would ban the operation of licensed marijuana retailers, unless the city already bans retail marijuana activity or use. HB 2998 has been reintroduced for consideration during the special session that began Friday.
“This is not an advocacy that you should use the drug,” Hurst said at a special hearing on the bill earlier this session. “We want to have a safe, tested, legal product for people who want to use it.”
Hurst initially proposed reducing the tax from 37 to 25 percent with House Bill 2347 earlier in the session. That bill also had support from those within the marijuana industry. It, too, has been reintroduced for consideration during the current special session.
Proponents of the proposal say a decreased tax would help make prices of marijuana in the state competitive with black-market counterparts.
Bowers said a typical gram of marijuana in his store costs $15, whereas high-quality drug dealers sell the same amount for about $10. If the tax was reduced to 25 percent, he argues he can probably drop his price to $12 for a gram.
Hurst’s initial proposal to reduce the tax didn’t gain traction earlier, in part because the bill’s fiscal note estimated it would cost the state $87 million in revenue. Others say reducing the tax on retail prices would lead to an increase in state revenue because more people would buy from legal retailers.