spokanabist, may 27, 2016

Sp kannabist Your guide to marijuana in Washington StateSPOKANNABIST

Your Guide to Marijuana in Washington State

Learn about the new recreational marijuana industry

• What’s legal versus illegal

• How much money Washington brings in from new cash crop

LOOK INSIDE for the answers to your questions

Thank you for reading the fi rst edition of Spokannabist – Your Guide to Marijuana in Washington State!

We hope you’ll fi nd this monthly publication informative and useful as the business of legal marijuana expands not only in our city and region but statewide. Count on Spokannabist to provide sound reporting and topical regional stories. From medical marijuana to legislative issues to the business of running a sophisticated grow operation, you’ll fi nd information on this new regional business segment, inserted in The Spokesman-Review on the last Friday of each month.

Email us at [email protected] with story ideas or to advertise.

Is it cannabis or is it marijuana? Both! Cannabis generally refers to the plant itself and marijuana usually refers to the dried fl ower and leaves. Cannabis belongs to the genus Cannabis in the family Cannabaceae. The word can be found in the Greek, Persian and Hebrew languages. How does it grow?A producer license allows one to grow, harvest, trim, dry and cure marijuana. Producers cannot extract concentrates, infuse products, or package and label product. Those activities may only be done by a licensed processor who markets the product to retail stores and transports the product within the state. Processors are also responsible for all extractions and infusions of product. The plants are dried at room temperature in a dark space. This process can take from a few days to two weeks, depending on the size and density of the buds and the relative humidity of the air. 45-55 percent: ideal humidity range for drying 3-4 months: the average time it takes from seed to being ready for consumption. But, depending on the plant and conditions the actual range can be as little as eight weeks or as long as seven months. 75-86°F: the optimal day temperature range for cannabis. Temperatures above 88°F and below 60°F seem to decrease THC potency and slow growth.

Stores can also sell …Concentrates: essential oils of the cannabis plant. Edibles: cannabis-infused foods or drinks. Edibles come in various forms, including mints, candies, cookies and chocolates. Transdermal Products: creams, lotions and massage oils infused with cannabis. What do tiers mean for producers? Producer licenses are classifi ed by tiers based on the square feet of dedicated plant canopy:Tier 1: 2,000 or less sq. ft.Tier 2: 2,000 – 10,000 sq. ft.Tier 3: 10,000 – 30,000 sq. ft.

SPOKANNABIST

Marijuana and marijuana-infused products are legal for Washington residents 21 years and older. It has intoxicating effects and may be habit forming. It can impair concentration, coordination and judgment. There may be health risks associated with consumption.

CULTIVATING CANNABIS CULTIVATING CANNABIS Growing, processing & purchasing

By NICOLE SKINNERMarketing Correspondent

2 Spokannabist is a product of The Spokesman−Review’s marketing division. • Friday, May 27, 2016

Spokannabist is a product of The Spokesman−Review’s marketing division. • Friday, May 27, 2016 3

By ALLISON HALL

Marketing Correspondent

Washington’s legal support of cannabis began in 1998 when Initiative 692 passed, approving its use for medicinal purposes. In 2012, voters approved Initiative-502, making cultivation and recreational use legal for adults. Today, there are 694 producer/processor licenses statewide, including 121 in Spokane County. There are also 343 retail licenses, including 18 in Spokane County, and 15 more proposed. Here’s how current state law shakes out: Basics You must be at least 21 years old to legally purchase marijuana in Washington. Purchasers must provide a valid form of government-issued identifi cation. Another option is to have a medical marijuana card prescribed from a licensed doctor in Washington. Individuals can legally purchase and possess 1 ounce (28 grams) of cannabis fl ower, 7 grams of extract for inhalation, 16 ounces of infused product in edible form or 72 ounces in beverage form, or 16 ounces of infused topical product in solid form or 72 ounces in liquid form. Marijuana must be consumed in private or risk a civil penalty of $100 for public consumption of 1 ounce or less. If found with more than 1 ounce (up to 40 grams) you can incur a misdemeanor along with a max fi ne of $1,000 and 1 to 90 days in jail. More than 40 grams constitutes a felony with a max fi ne of $10,000 and 5 years in jail. Shopping The fi rst recreational sales began in July 2014. Purchase of marijuana should be made from state-licensed stores. Authorities recommend keeping your receipt as proof of purchase. Non-residents of Washington can purchase marijuana as long as they meet the minimum age requirement and consume within the state. Medical marijuana patients must purchase from state-licensed stores unless they have authorization to grow their own plants.

LOCAL LICENSEDRECREATIONAL RETAIL STORES

SpokaneCannabis and Glass

Cinder 4:20 Friendly

Green Star CannabisLucky Leaf

Royal’s CannabisSatori

SmokaneSpokane Green LeafThe Green Nugget

Spokane ValleyCinder

Locals Canna HouseSativa Sisters

Treehouse Club

MillwoodGreenlight

Airway HeightsThe Top Shelf

Liberty Lake has passed a moratorium on any stores, and Spokane Valley has approved a moratorium

on future expansion.Source: 502data.com

[SURROUNDING STATES

Oregon legalized the medicinal use of marijuana in 1998, and as of July 2015 recreational use is legal. It is illegal to consume marijuana in public and all marijuana and products purchased in Oregon must be consumed in-state. If caught in public with 1 ounce or less there is currently no penalty. However, 1-2 ounces incurs a violation and a $650 max fi ne; 2-4 ounces is a misdemeanor with a max fi ne of $2,500 and 6 months in jail. More than 4 ounces can result in a misdemeanor charge with a max fi ne of $6,250 and a year in jail. Recreational users in Oregon may possess 1 ounce (28 grams) of cannabis fl ower, plus 8 ounces of dried usable marijuana at home, plus 1 ounce (28 grams) of extract for inhalation; plus cultivation of 4 marijuana plants per household. In Idaho, possession of 3 ounces or less is considered a misdemeanor with a max fi ne of $1,000 and 1 year jail time; 3 ounces-1 pound is a felony with a max fi ne of $10,000 and 5 years in jail. Sale, delivery, or cultivation of marijuana is considered a felony with a max fi ne of $50,000 and 1-5 years of jail time. Montana legalized medicinal use of marijuana in 2004. Each individual must work with their health provider to apply for and obtain a registry identifi cation card. Without this card, it is considered a misdemeanor for possession of 60 grams or less and punishable with up to 6 months in jail and a max fi ne of $500. More than 60 grams could earn a felony with a max fi ne of $50,000 and 5 years in jail.

[LEARN THE LAW

New recreational pot laws don’t mean anything goes


By SAM R. CALVERT

Price gouging, exploding weed bags, powdery mildew, spider mites (dead and living) and “other” foreign material: these are some of the contaminants found early on in Washington’s emerging marijuana market. I wish I could say it’s over, but it’s not. Some growers were recently busted for using unapproved pesticides on their fl owers. This means products like edibles, tinctures and concentrates sourced from these fl owers were pulled from many retail stores. We’ve seen samples containing threads, screws, hair and clear chemical burns in or on some growers’ samples. We’ve experienced edibles that melt, mold and just taste bad. (At our store, we’ve added several additional quality management tools to help prevent such practices.) The truth can hurt, and this is a developing market that will just be two years old on July 8, when the fi rst retail licenses were issued. Problems will continue to exist as we grow. Some products will be bad or not work at all. And, anything and everything can and could go wrong. So what should or can be done?I remember one of my Gonzaga Business Ethics professors telling me, “Sam, when you start or enter any business, always…every time…focus on being honest, ethical and sincere. I know business is often more

about people wanting lots of money. But, if you set an ethical standard fi rst, experienced professionals and your customers will take note of this right away and the business will

correctly grow.” That’s what industry participants, or a city, or the Liquor and Cannabis Board should do. Be honest,

ethical and work to provide the best experience for the people we serve. Did you

know the City of Spokane created

its own Marijuana Policy Committee in 2014? It consisted of two council members and professionals

from many disciplines. The

intent and focus was to create best-practices for

Spokane’s citizens and

those of us working in the industry. I sat on this committee, and I watched caring and hard-working folks discuss and implement diffi cult choices at every meeting. Sometimes it was very challenging. The committee’s Education and Prevention representative had one direction. Law enforcement had another. University researchers had yet another. And, of course, I had a business perspective discussed and considered at every turn. It was a fair and honest forum for all of us. Many people everywhere across this state are trying to consider and implement best-industry practices. At times, we’re going to

make mistakes. It’s unavoidable. We’ve no choice but to be patient and look for solutions to our problems: all of us, everywhere. We’re going to see unethical behavior, poor choices, and a host of problems we’ve not likely considered. My grandmother used to say, “Perfection is an illusion. So focus on making the best choice you can.” Every day I look around and choose ways to improve the customers’ experience, the City of Spokane’s experience and the industry as whole. That’s simply the best any of us can achieve. Choosing the best path takes experienced people working very hard to test and measure the industry’s progress.

Sam R. Calvert is Owner/Operator of Green Star Cannabis which opened in 2014 in Spokane, and a member of the City of Spokane’s Marijuana Policy Committee.

CHOOSING AN CHOOSING AN ETHICAL PATHETHICAL PATH

If you consider yourself an expert in Washington’s legal marijuana industry and would like to be considered for a future guest column, please email

[email protected]

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Photos by Shallan Knowles/Marketing Correspondent

Some producers include appealing packaging, such as this item (left) found at Green Star Cannabis.

mailto:[email protected]

RECREATIONAL MARIJUANA THUsers embrace legal product, but

By COURTNEY DUNHAMMarketing Correspondent

Almost two years after the opening of the fi rst recreational marijuana stores in Spokane County, one thing

is clear: no matter how you feel about legal pot, the region

is earning a reputation as one of the most abundant spots for growers, processors

and retailers in the state, perhaps the country. Spokane County made

national news earlier this spring when the amount of money spent on

legal marijuana sales topped retail sales of wine,

bread and milk, according to the Washington Liquor and

Cannabis Board. Pot sales topped $5 million in

Spokane County for the fi rst time in March, according to fi gures released by the Washington Department of Revenue. Retailers reported just over $43 million in sales in 2015, an average of $225.64 per household per year.

Total revenues are likely to continue to increase, as medical marijuana dispensaries move under Liquor and Cannabis Board control in July. State laws now enable tax revenue sharing with local governments based on sales, so more marijuana sales means more money for cities and counties. Spokane County can expect to receive $442,917 from the state in excise taxes on marijuana this year, according to the recent LCB estimates. This may sound like great news, but with 18 retail licenses granted in the county, and new ones proposed, some worry that too much growth is happening too fast. Sam Calvert, who owns Green Star Cannabis, one of the original license holders, said this kind of fast-track growth isn’t good for anyone. “We can’t keep up at this rate,” he said. Calvert would like to see better practices and ethics. He points to a leaky cartridge he received from a distributor as an example of inferior efforts.

“Too many people are trying to gein on it, not caring about the quality,” he said. Public education is also vital. Though a majority of voters made Initiative 502 happen in 2012, which legalized recreational marijuana, the vote also indicated that 44 percent ofvoters were opposed. “We have been fi ghting decades of misinformation, and I’m not interested in changing those minds that are dead-set against it,” he said. “You have to check it out and experience it for yourself.” Regular consumers like Beth Webster, who didn’t know much aboupot until it became legal, made it her mission to learn more. “I was like a lot of people who hadan interest but wasn’t sure where to start,” she said. “Once it was legal and you were actually able to go into a store and ask questions, I felt goodabout fi nally trying it.” Don Kelly, a friend of Webster’s, said he has no interest in ever using pot, legal or not. However, he feels that making it legal was a good moveby voters and the state. “People were always going to fi nd

[Photo courtesy Thinkstock.com

A glass-blown pipe for smoking marijuana.

6 Spokannabist is a product of The Spokesman Review’s marketing division. • Friday, May 27, 2016

While Spokane marijuana retailers are generally considered customer-friendly, Oregon stores seem to be less so. To access a store, shoppers pass through a locked foyer and show their ID, which is entered into a computer. Once verifi ed, patrons are

allowed inside. Many stores lack the bright colors and artwork seen at many Spokane shops. However, even with bare, white walls, dispensaries are already booming in that state’s newly-legal recreation industry. Dispensaries

sold $14 million worth of recreational pot in January 2016, the fi rst offi cial month of legal sales, exceeding projections of $2-$3 million for the entire year. That fi gure doesn’t include medicinal marijuana sales, which are untaxed.

HRIVING IN SPOKANE COUNTY some retailers worry about quality

Photo (above) by Shallan Knowles/Marketing Correspondent

Spokane County currently has 18 licenses for marijuana retailers.

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a way to buy and use it,” Kelly said. “This way, at least more people are profi ting from it than dealers.” Citizens and offi cials in other states are now watching Washington, along with Colorado, Oregon and Alaska, where citizen initiatives for recreational use were successful. A report by the Drug Policy Alliance brings encouraging news for Washington and the broader legalization movement by highlighting data on public safety, youth marijuana use, and the economy before and after passage of I-502. Since adult possession of marijuana became legal in stores two years ago, there has been a dramatic decrease in marijuana arrests and convictions, as well as increased tax revenues. During the same period, the state has experienced a decrease in violent crime rates. Rates of youth marijuana use have remained stable. One possible area of concern came from AAA, which reported an increase in the number of fatal collisions from people with marijuana in their system. The Drug Policy Alliance’s fi ndings include:

• Filings for low-level marijuana offenses are down 98 percent for adults 21 and older. All categories of marijuana law violations are down 63 percent and marijuana-related convictions are down 81 percent.• The state saves millions of dollars in law enforcement resources previously used to enforce marijuana laws.• Violent crime has decreased in Washington and other crime rates have remained stable since the passage of I-502.• Youth marijuana use has not increased since the passage of I-502.• Washington voters continue to support marijuana legalization. Fifty-six percent continue to approve of the state’s marijuana law – about the same as 2012 – while only 37 percent oppose it, a decrease of 7 points since 2012. More than three-quarters (77 percent) believe the law has had either a positive impact or no effect on their lives.

[[

Spokannabist is a product of The Spokesman Review’s marketing division. • Friday, May 27, 2016 7


Marijuana may be big business in Washington, but most pot shop owners aren’t getting rich. Cannabis legally has a smaller profi t margin than most people expect, due to local, state and federal taxes. “A huge percent that comes in goes back out in taxes, costs and non-deductible expenses,” said Eric Skaar, general manager at Sativa Sisters. Marijuana dispensaries pay a sales tax of 8.7 percent in Spokane County plus an excise tax of 37 percent (a tax on specifi c goods; often items with negative health impacts like cigarettes and alcohol). In comparison, Washington charges alcohol providers a 20-22 percent excise tax plus local sales taxes of 7-9.5 percent. Despite marijuana not being considered legal by the U.S. government, pot retailers must pay federal taxes. Owners also can’t take deductions, like other industries. “It’s called tax code 280E,” said Skaar. “It says everyone has to pay taxes no matter if your business is legal or illegal.” 280E of the Internal Revenue

Code forbids businesses associated with “traffi cking” of Schedule I or II substances, from subtracting ordinary business expenses as tax deductions.

Since licensed retailers’ businesses aren’t “traffi cking,” federal income taxes are based on gross income. Many retailers also must pay their taxes in cash – since marijuana isn’t federally legal, many banks don’t allow business accounts. In the early days of marijuana legalization, before any banks would work with pot shops, some owners drove to

Lacey, Wash., to pay their taxes in cash, in person. Almost $786 million in marijuana has been purchased since recreational legalization in 2012. That’s $211 million in excise tax and $65 million in sales tax. Under the law that legalized recreational marijuana in Washington, 55 percent goes to health care, 25 percent for drug abuse treatment and education, 1 percent for marijuana research at the University of Washington and Washington State University and $5 million annually to the Washington State Liquor and Cannabis Board. The state general fund receives the rest.Dispensary owners get a fraction.

POT PROFITSThey’re high, but taxes take their toll

By STACI LEHMANMarketing Correspondent

Photo by Shallan Knowles/Marketing CorrespondentRetailers distinguish themselves by offering different products and strains, such as this item available at Sativa Sisters.

Menu at www.greenstarcan.com

Spokane’s largest and best-located Professional Recreational Marijuana store with an open and invitingatmosphere with room to shop and scan our more than 300 items. You won’t be cramped in here!

1403 N. DIVISION ST.

Indoor,Hand-trimmed Only! SUMMER HOURS:

MON-SAT 9-10,SUN 10-8of course!

Customer ServiceWhen you enter the store, you’ll be greeted by your own, highly qualified and educated Budtender.

He or she will stay with you during your entire visit: It’s up to you! We’re here to help each and every visitor!We don’t sit behind a counter and hand you products from a menu!

QualityWe’ve been open since the market began almost two years ago, and we immediately added two additionallevels of quality assurance. Every product is placed under a microscope where we carefully look for thingslike powdery mildew, dead spider mites, and chemical burns. It is then sent out for additional testing wheresmell, taste, and effect are further evaluated. If it does not pass our testing, it does not come into your store!

Flowers TopicalsVape products CBDsEdibles Concentrates

and muchmore.

Located one-block South of Mission on Division headed toward downtown.

One-StopShop

for almost everything

This product has intoxicating effects and may be habit forming. Marijuana can impair concentration, coordination, and judgement. Do not operate a vehicle or machinery under the influence of this drug. There may be health risks associated with consumption of this product. For use only by adults twenty-one and older. Keep out of the reach of children.

How Do You Rec-reate?™

Our customer service and quality of product is second to none.


http://www.greenstarcan.com

TAXING WEED, GOOD FOR STATE BUDGETSTotal WA sales

fi scal year 2015: $259.7 million

Projected Total WA sales fi scal year 2016:

$815 million

WA tax obligation 2015

$64.9 Million

Projected WA tax obligation 2016

$155.8 Million

CURRENT PROPOSED RETAIL LICENSES

Spokane County 18 licenses to expand to 33Benton County 10 licenses no expansions plannedGrant County 7 licenses to expand to 11King County 61 licenses to expand to 114Lincoln County 2 licenses to expand to 3Stevens County 4 licenses to expand to 7Whitman County 4 licenses to expand to 7

Source: WA Liquor and Cannabis Board[ [TTTHHHEEEGGGRRREEEEENNUGGET

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Witthhh OOOvveerr 111000000 LLuxury StrainsSSSOOOMMEEETTHHIINNGG FFFOORRR EEEEVVVERYONE


spokanabist, may 27, 2016

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