Spokanabist, may 27, 2016

Sp kannabist SPOKANNABIST Your guide to marijuana in Washington State

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

2

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

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

We hope you’ll find 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 find information on this new regional business segment, inserted in The Spokesman-Review on the last Friday of each month.

Email us at spokannabist@ spokesman.com with story ideas or to advertise.

CULTIVATING CANNABIS Growing, processing & purchasing

By NICOLE SKINNER Marketing Correspondent

Is it cannabis or is it marijuana? Both! Cannabis generally refers to the plant itself and marijuana usually refers to the dried flower 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 classified 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.

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.

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

LEARN THE LAW New recreational pot laws don’t mean anything goes

3

LOCAL LICENSED RECREATIONAL RETAIL STORES Spokane

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 identification. 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 flower, 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 fine of $1,000 and 1 to 90 days in jail. More than 40 grams constitutes a felony with a max fine of $10,000 and 5 years in jail.

Shopping The first 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.

Cannabis and Glass Cinder 4:20 Friendly Green Star Cannabis Lucky Leaf Royal’s Cannabis Satori Smokane Spokane Green Leaf The Green Nugget

Spokane Valley Cinder Locals Canna House Sativa Sisters Treehouse Club

Millwood Greenlight

Airway Heights The 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 fine; 2-4 ounces is a misdemeanor with a max fine of $2,500 and 6 months in jail. More than 4 ounces can result in a misdemeanor charge with a max fine of $6,250 and a year in jail.

Recreational users in Oregon may possess 1 ounce (28 grams) of cannabis flower, 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 fine of $1,000 and 1 year jail time; 3 ounces-1 pound is a felony with a max fine of $10,000 and 5 years in jail. Sale, delivery, or cultivation of marijuana is considered a felony with a max fine 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 identification 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 fine of $500. More than 60 grams could earn a felony with a max fine of $50,000 and 5 years in jail.

COLUMN

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

GUEST

4

CHOOSING AN ETHICAL 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 SPOKANNABIST@spokesman.com.

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 flowers. This means products like edibles, tinctures and concentrates sourced from these flowers 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 first 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 first, 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 bestpractices 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 difficult 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 bestindustry 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.

Photos by Shallan Knowles/Marketing Correspondent Some producers include appealing packaging, such as this item (left) found at Green Star Cannabis.

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

5

6

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

RECREATIONAL MARIJUANA TH Users embrace legal product, but

By COURTNEY DUNHAM Marketing Correspondent

Almost two years after the opening of the first 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 first time in March, according to figures 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 ge in 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 of voters were opposed.

“We have been fighting 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 abou pot until it became legal, made it her mission to learn more.

“I was like a lot of people who had an 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 good about finally 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 move by voters and the state.

“People were always going to find

Photo courtesy Thinkstock.com A glass-blown pipe for smoking marijuana.

[

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

7

HRIVING IN SPOKANE COUNTY some retailers worry about quality t

f

ut

d

e

a way to buy and use it,” Kelly said.

“This way, at least more people are profiting from it than dealers.”

Citizens and officials 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 findings 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. Fiftysix 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.

Photo (above) by Shallan Knowles/Marketing Correspondent Spokane County currently has 18 licenses for marijuana retailers.

[

While Spokane marijuana retailers are generally considered customerfriendly, 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 verified, 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 first official month of legal sales, exceeding projections of $2-$3 million for the entire year. That figure doesn’t include medicinal marijuana sales, which are untaxed.

8

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

POT PROFITS They’re high, but taxes take their toll

By STACI LEHMAN Marketing Correspondent

+HOS 3UHYHQW 8QGHUDJH 0DULMXDQD 8VH

7KH :KR :KDW :KHUH RI 5HVSRQVLEOH 0DULMXDQD 8VH

XXX TSJF QSI XGGFUQMPQX CTR

Marijuana may be big business in Washington, but most pot shop owners aren’t getting rich. Cannabis legally has a smaller proďŹ 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,â€? 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 speciďŹ c goods; often items with negative health impacts like cigarettes and alcohol).

In comparison, Washington charges alcohol providers a 2022 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 “trafďŹ ckingâ€? of Schedule I or II substances, from subtracting ordinary business expenses as tax deductions.

Since licensed retailers’ businesses aren’t “trafďŹ cking,â€? 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.

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

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

9

How Do You Rec-reate?

™

Indoor, Hand-trimmed Only!

of course!

1403 N. DIVISION ST.

SUMMER HOURS: MON-SAT 9-10, SUN 10-8

Menu at www.greenstarcan.com

Our customer

service and quality of product is second to none. +

Customer Service +

When 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!

+

Quality +

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

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

p o t S e n O Shop ing eryth

ev for almost

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

Flowers Vape products Edibles

Topicals CBDs Concentrates

h c u m and e. mor

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.

10

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

TAXING WEED, GOOD FOR STATE BUDGETS Total WA sales fiscal year 2015: $259.7 million

Projected Total WA sales fiscal year 2016: $815 million

WA tax obligation 2015

Projected WA tax obligation 2016 $

64.9 Million

$

155.8 Million

[ [ CURRENT PROPOSED RETAIL LICENSES

Witth Over 100 Luxury Strains SOMETHING FOR EVERYONE

THEGREENNUGGET 509.3309.

9.21 21330 ––1919 19 E. Fr F an anci c s Av ci A e, Spokane, Wa

Spokane County Benton County Grant County King County Lincoln County Stevens County Whitman County

18 licenses 10 licenses 7 licenses 61 licenses 2 licenses 4 licenses 4 licenses

to expand to 33 no expansions planned to expand to 11 to expand to 114 to expand to 3 to expand to 7 to expand to 7

Source: WA Liquor and Cannabis Board

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

11

12

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