Marijuana

Washington's Marijuana Regulators Give Up Cap on Pot Stores

Central planning of the cannabis market did not quite work as intended.

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WSLCB

When it began implementing I-502, Washington's marijuana legalization initiative, in 2013, the state Liquor Control Board, now known as the Liquor and Cannabis Board (LCB), planned to issue a total of 334 retail licenses for the entire state. That's about five marijuana stores for every 100,000 residents. By comparison, Colorado, the other state where voters approved legalization in 2012, has 380 recreational outlets, or seven per 100,000 residents, and the marijuana initiative rejected by Ohio voters last week would have authorized 10 pot shops per 100,000 people. But the LCB's relatively low cap on the number of outlets, which led to license lotteries in many cities, never really kicked in, and the board has officially abandoned it.

Jacob Sullum

As of last week, the LCB had managed to license just 212 retailers, of which 188 were open for business. Now that it is accepting license applications from medical dispensaries seeking to serve recreational consumers, any notion of numerical limits has gone by the boards. The new applications were triggered by a 2015 law that aims to integrate heretofore unregulated medical suppliers with the state-licensed stores authorized by I-502. "Gone are the quotas and lotteries used in the first round of licensing," notes KUOW, the NPR station in Seattle. "Now there are no limits on the number of licenses that may be granted—a change that took some cities by surprise."

Cities can still impose their own numerical limits. KUOW reports that Renton, a Seattle suburb with a population of about 100,000, has tentatively settled on a ceiling of five—"two more than the city was assigned under the initial quotas in I-502." In practice, the number of outlets in any city may also be limited by rules that require them to be at least 1,000 feet from elementary or secondary schools, playgrounds, recreation centers, child care centers, parks, public transit centers, libraries, and game arcades open to minors.

The LCB may yet revive the cap on retailers as part of its efforts to prevent diversion of marijuana to other states. "An upcoming report from the RAND Corporation…will estimate how much marijuana Washington residents are consuming," KUOW says. "Those numbers will help guide his agency's decision on how many licenses to grant." An LCB spokesman says that "while there is presently no cap, we have also been very upfront about the fact that we may shut it off."

The LCB also has tried to limit production of marijuana by assigning licensed growers shares of a statewide quota designed to prevent diversion. That quota was based on a highly uncertain estimate of total cannabis consumption and a projection that newly legal marijuana merchants would initially capture 25 percent of that market. Last July, a year after legal recreational sales began, LCB Deputy Director Randy Simmons estimated that licensed retailers were serving about 10 percent of the market.

[Thanks to Marc Sandhaus for the tip.]

NEXT: Where Hillary Clinton's Marijuana Proposal Falls Short

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  1. REMAIN CALM

    ALL IS WELL

    1. Look like “pot” day on H&R. Tomorrow buttsecks or Messicans?

      1. Intercrural Guatemalan Vicodin Day.

        1. We can embrace our inner Guatemalan-ness, our natural heat

        2. Si, Senor!!

  2. How is this seen as anything but blatant cronyism? If there are too many marijuana shops for the market to bear some of them will shut down. Just like restaurants. There is no legitimate non-crony reason to limit the amount of businesses of a certain type to open up.

    1. Government interference in a market
      Legitimate motivation

      Pick one only.

    2. These people haven’t shown any reason to believe they understand supply and demand. If those places could just open up whenever they want then the streets would be flowing with marijuana and children would be eating it off bushes in the park. Why do you hate children?

    3. Allow markets to choose winners and losers? What if markets choose the ones that don’t give money to the politicians? Can’t allow that.

  3. . . . estimated that licensed retailers were serving about 10 percent of the market.

    Imagine that. You can could either go to a ‘legit’ store and fight through its 20,000 other customers, or call up your weed dude and have him drop off a baggy. I can’t understand why anyone would want to deal with the black market then.

    1. I’m wondering if the stores are a lot pricier than ‘black market’ dealers.

      1. In Seattle they are. But it seems to be the difference between a drug bust and a tax violation now. As open as some the courier places operate, the police could have shut them down on day one if they really cared to.

        1. Sorry, SF, I should have been more specific – I’d heard that about Seattle. It’s not too surprising, given the cost of real estate there and compliance costs for a ton of local regs, in addition to the state ones.

          Some smaller town stores are probably better, although these prices still seem a tad high. (NPI)

          1. Meh. I was just using it an excuse to talk about getting high, anyway.

      2. I hear that in Colorado they are. All those taxes and licenses and fees add up.

        1. I wouldn’t be surprised. I found a link to a semi-rural WA dispensary, and some of their prices seemed a bit high (although I’ve been out of the market for a while). They did have a 19% Kush for $70 a quarter, though.

          1. That’s more expensive than the black market around here.

        2. In Colorado, they were really high initially – owing more to the fact that there was no supply. When retail go-live happened, the state allowed the shops to convert medical into retail in a one-time batch. Everyone underestimated demand, and the price went sky high. (Medical is treated differently under state law. There is no tax, etc)

          Two years later and the prices are far less than they were, and only about 30% higher than the street market, with 25 of that 30% being the taxes. Note that there is a wide variance in the state because of where your store may be located. I hear Aspen is still way higher than street weed, but, then, that’s Aspen. The other tourist destinations, while not as bad as Aspen, are also higher.

          1. When I lived in Boulder people would deal openly on Pearl Street. But that was like twenty years ago.

            1. That stopped 10-15 years ago on the back of some generous drug war funding from the federal government.

              1. To be more precise. The “open” dealing stopped. If you know where to go, you can still get it on Pearl.

  4. and game arcades

    Those aren’t still a thing, are they?

    1. Sadly yes.

      Also, what happens if someone opens an arcade/playground/bus depot within 1000 feet of an established MJ dispensary?

  5. In practice, the number of outlets in any city may also be limited by rules that require them to be at least 1,000 feet from elementary or secondary schools, playgrounds, recreation centers, child care centers, parks, public transit centers, libraries, and game arcades open to minors.

    Serious question: Whence the “1000 feet” bullshit? Can’t kids see “evil things” from the car?

    Sheesh, make it 420 feet.

    1. Because if you see a pizza hut across the street from a high school, it obviously means that Pizza Hut is specifically targeting high schoolers with obesity – even if your business isn’t readily accessible by the high school students in the first place and even if you aren’t even open for lunch, when the high schoolers would be using your restaurant.

      The fact that they are nearby is creating obesity via osmosis and if you disagree you hate children. You monster.

      Cigarettes, alcohol, and weed all act on the same principle. Even though they can’t buy them, if you sell them within 1,000 feet of an establishment that serves minors, they will be smoking, drunk, and high 100% of the time.

      1. obesity via osmosis

        Nice album name

        1. I think the clinical term ia adiposmosis.

          1. *is… edit button.

  6. I like that they are pretending to conduct a study on the “correct” number of stores to license.

    WTF are the parameters?

    1. They are trying to find the optimal point on the curve for maximum number of outlets that will still make substantial payments to protect their cronyist rent-seeking.

      Too many outlets, and the value of the license goes down.

      Not enough outlets, and you are missing opportunities to set up cronies to pay you off.

      Its a tough calculation. I’m sure they have their Top Men on it.

    2. One is parameter plucking, another is hissing, and a third is gunning people down for no reason.

  7. Central planning of the cannabis market did not quite work as intended.

    Gee, where’s my shocked face?

  8. In practice, the number of outlets in any city may also be limited by rules that require them to be at least 1,000 feet from elementary or secondary schools, playgrounds, recreation centers, child care centers, parks, public transit centers, libraries, and game arcades open to minors.

    Still more evidence that the people writing the laws are completely out of touch with reality.

    1. In other words, the elections are rigged and there is no way for a citizen to verify that a vote was counted as cast. You were expecting what?

  9. Centralized planning – fails again.

  10. WHY can’t the stinking government just BUTT OUT altogether? Its a plant, let people grow and use it. All this is amounts to revenue generation on top of government make-work.

    And no, I do NOT use the stuff. ButI believe those who need or want it should be able to grow or buy it. Nannies need to find reak work that produces something of value. Instead they drag us all down by taking, and preventing others from making.

    1. No more taxed or regulated than tomatoes.

  11. the state has no clue about the amount of Cannabis being consumed.

  12. Wasn’t the RAND Corporation one of Nixon’s GOP assets for convincing people to bomb women, kids, houses and villages in Vietnam? Instead of militarized conscripts killing distant peasants as involuntary servitude, they now want militarized cops murdering teenagers and brown people in cold blood. When it comes to War on Something, War is clearly the fixed quantity and the Something can vary over time, just so long as the military-industrial complex gets to kill people for no reason.

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