A quiet week and close of year allows for some reflections on the cannabis sector, a goose that laid golden eggs for the State of Washington.
Here’s a look at cannabis-related policymaking events on the calendar in the week ahead.
Monday December 26th
The State of Washington (belatedly) recognizes the Christmas Day holiday.
Tuesday December 27th
WSLCB - Board Caucus
The weekly Washington State Liquor and Cannabis Board (WSLCB) Board Caucus was cancelled.
- [ Event Details ]
Wednesday December 28th
At publication time, no cannabis-related policymaking events were scheduled.
Thursday December 29th
At publication time, no cannabis-related policymaking events were scheduled.
Friday December 30th
At publication time, no cannabis-related policymaking events were scheduled.
Saturday December 31st
WSLCB - End of Quality Control “Sell Down” Period
- Just after the conclusion of the most recent revision to quality control testing rules in early March, WSLCB staff issued a policy statement on March 31st to describe “licensed marijuana [cannabis] producer and processor postharvest ‘phase in’ and licensed marijuana [cannabis] retail ‘sell-down’ periods for marijuana [cannabis] products.” After the rules became effective on April 2nd, sales of products that did not meet the new testing requirements were allowed at wholesale through September 30th. And for the ‘sell-down’ period, “all marijuana [cannabis] product sold by licensed marijuana [cannabis] retailers after December 31, 2022 must have an accompanying certificate of analysis, or COA demonstrating the retail product is in compliance with the rules effective on April 2, 2022.”
- We are not economists here at Cannabis Observer, but it’s our anecdotal understanding that a great deal of product dating before the new pesticide testing regime was established was moved in the past year, helping drive wholesale prices down. Coupled with compounding macroeconomic factors, including the “end” of the pandemic and inflation, it has been a tougher year than usual for the cannabis sector in Washington state.
- That sentiment was somewhat captured by a December 20th Seattle Times article titled, “WA pot sales decline for first time in the decade since legalization.” The author emphasized an “8% decline over 2021 — a drop of about $120 million in revenue,” pointing out retail basket values had declined without interrogating whether fewer products were purchased.
- The article does emphasize how Washington State collects the highest excise tax in the world on cannabis: 37%, which resulted in $509M in revenue to the State on roughly $1.3B in retail sales while including licensing and other fees. While legislators have admirably shown some awareness that federal legalization or the endorsement of interstate commerce is nigh, there appears to be no corresponding appetite for discussion about harmonizing or otherwise calibrating isolated state “sin tax” frameworks which regressively tax cannabis consumers.
- Washington State earns extra demerits for providing no quarter to cannabis patients who pay the excise tax (you have to be registered with the Washington State Department of Health to gain reprieve from State and local sales and use tax) and prohibiting home growing of cannabis by adults who are not patients.
- The Seattle Times article was somewhat breathlessly repeated around the state and country, perhaps exhibiting concerns that profits from the Washington cannabis sector—a goose that laid golden eggs—could be reaching its limits. Perhaps the structure of the 502 marketplace could use some adjustments during the 2023 legislative session, rather than looking inside for more gold.