Recreational marijuana sales in Stevens County topped $1.6 million last year, according to the Washington State Liquor and Cannabis Control Board (WSLCB), making it the hot spot for pot sales in the tri-county area. The growth of the illegal-turned-legal drug industry after the passage of Initiative 502 that legalized recreational marijuana in Washington has been apparent along the HWY 395 corridor, as retail sites have started dotting the map in Colville, Arden, Chewelah and Clayton.
While the 2014-15 Stevens County sales were small in comparison to the $37.1 total recreational marijuana in Spokane County, Stevens County generated the most in the tri-counties compared to the $173,177 in Pend Oreille County and $203,910 in Ferry County. Per state regulation, Stevens County is allowed up to seven recreational marijuana retail stores. The number of production licenses in the county is not limited, however, the WSLCB only allowed for a limited window for producer applications in 2013 and is still processing applications from that period.
At present, WSLCB is not accepting additional marijuana producer applications.
However, whether the new industry is a boon or a burden for the area is not yet evident. The industry has created new burdens for local government in terms of regulation and zoning and also poses new challenges for law enforcement. The local return on total sales has also been small, with Stevens County only receiving $14,973 in sales tax kickbacks from the $1.6 million generated in total marijuana sales from 2014-15. An additional $19,966 is slated to go to law enforcement this year due to some 2015 legislative adjustments that consolidated the excise tax on marijuana sales to 37 percent and allotted more money to local entities.
The Stevens County Commissioners have also had to amend the county’s zoning codes to outline where retail stores are prohibited and where production facilities cannot be sited. The Commissioners passed their final version of the recreational marijuana zoning regulations last month after previous moratoriums on the businesses.
The Stevens County Sheriff’s Office also has new challenges related to the legalization of marijuana, including changes in the law that make it legal for individuals over 21 to possess up to one ounce of marijuana, 16 ounces of marijuana-infused solid products or 72-ounces of marijuana-infused liquid products. Before I-502, these were criminal offenses.
Stevens County Sheriff Kendle Allen said the legalization of recreational marijuana has created “extra hoops” for law enforcement.
“There are extra hoops to jump through now, including bloods tests for those who may be driving impaired after using marijuana,” said Sheriff Allen.
City governments have also had to consider the issue of retail stores within their communities. The City of Chewelah has banned any recreational marijuana retail stores or medical marijuana dispensaries within the city limits.
Marijuana market saturated
While moving a drug from illegal to legal may be challenging to governments and law enforcement, the group likely doing the largest double take is the marijuana producers and retailers.
Since the drug became legal, profits from growing and selling marijuana have plummeted. A recent study of the pricing data showed that both retail prices and wholesale prices are falling steadily at 2 percent per month, according to Steve Davenport of the Pardee RAND Graduate School who examined the Washington Liquor and Cannabis Control Board data.
Retail sales dropped to $9.32 a gram in 2016 after a high of nearly $25 in 2014. Wholesale prices also declined from nearly $10 a gram in 2014 to a low of $2.99 in 2016, according to Davenport.
Davenport predicted if the current trend continues, prices may fall as much as 25 percent each year going forward.
The current oversaturation of the market may get even worse, as the Washington State Legislature passed a provision in 2015 to merge medical marijuana and recreational marijuana sales. Until the legislation was passed, medical marijuana was unregulated and, essentially, still illegal, said WSLCB lead Mikhail Carpenter.
“The legislature decided to address the medical marijuana issue by merging it into the legalized recreational market,” Carpenter explained. “The law formally prohibits medical dispensaries which were unregulated and brings medical marijuana sales into already existing recreational marijuana retail sites.”
Carpenter said recreational marijuana stores that are currently licensed have the option of applying for a medical endorsement. All medical “dispensaries” are required to close by July 1, 2016.
The law merging medical and recreational marijuana sales (SB 5052) also created provisions for cooperative grow gardens by up to four patients under certain conditions. Private medical marijuana grow sites are regulated by the Washington Department of Health.
With the possibility of even more marijuana on the legal market with the merger of medical and recreational, some who applied for producer licenses during the limited 2013 window may be reconsidering.
According to records from the Liquor and Cannabis Control Board, 18 applicants in Stevens County are still waiting for approval for their grow sites. In addition to the 15 active sites in the county, there could be as many as 33 legal marijuana grow sites in the county if all applications are approved.
The high number of applicants was due to the limited application window and speculation, said Carpenter.
“Some people applied during the 2013 window waiting to see what would happen with the market or thinking that they could sell their licenses at some point,” said Carpenter. “But you cannot legally sell your state license to produce, you could only sell an established business.”
As the legal marijuana industry continues to develop, it is not just pot entrepreneurs who are waiting to see what will happen. Stevens County Commissioner Don Dashiell said he is “neutral” on the marijuana issue at the moment.
“I am neutral on the issue, I can’t say if it is good or bad. We have passed our zoning regulations on the issue and we are seeing some normal problems when you shift from an illegal to a legal market like people forgetting that they now need building permits and licenses. You can’ t just throw up a shed and try to convert your illegal grow site to a legal business,” said Dashiell. “There has been some stomping around by folks with grow operations near them, but at this point the grow operations have to prove they are bad before we can address it.”
By Jamie Henneman/The Independent Staff