Jason Grube

Tarukino's office building in the no-man's-land between Fremont and Ballard doesn't look like the home of a future international cannabis conglomerate. Open the company's front door, and you're greeted by a dated interior and a dark staircase. But the luxury SUVs parked in front of the building, and the résumés of the people sitting in the offices upstairs, give credence to the globe-conquering plans the company is hatching.

Tarukino owns three brands in Washington's legal weed market: Happy Apple weed sodas, Pearl2O vitamin water, and Velvet Swing cannabis lubricant. They are cannabis products with little resemblance to the pot of the Grateful Dead or Biggie Smalls. You don't smoke them to get high, they've been stripped of weed flavors and odors, and their sleek bottles and packaging make them look like they could be sold on the shelves of Target or a health food store.

As of this past August, you can get these three brands not only in Washington's pot stores, but also California's. Which on first glance doesn't seem possible. After all, one of the main rules of state-level legalization is that weed can't cross state lines.

But Tarukino is operating aboveboard, and it's following the rules. Tarukino is launching its Washington-born products in other states through a series of licensing deals. No weed crosses state lines, but Tarukino's products still become available across the globe.

According to Howard Lee, Tarukino's CEO and a former senior vice president at the Walt Disney Company, Tarukino has plans to expand to more states, as well as Canada. "We will be in Colorado, Nevada, and Massachusetts as soon as funding is available," Lee said. "We have license holders in those states that all want to use our technology and create our products in their states."

And as states increasingly reject decades of racist weed policy, these products may become major national—even international—brands.

Tarukino is not alone. At least five other pot brands that started in Washington are now for sale beyond the state, The Stranger has been able to confirm. The list includes some of the most recognizable names on pot store shelves: edibles from Mr. Moxey's Mints and Zoots, and concentrate brands Refine Seattle, Avitas, and Juju Joints. Plus, one pre-roll brand, Saints, just inked a deal to be distributed in California beginning in 2018.

These companies have their eye on regulated markets wherever they happen to open up. Juju Joints are already for sale in some medical dispensaries in Canada. Tarukino's executives said they've been making trips to British Columbia, preparing investment opportunities for when the Canadian government rolls out the first major-economy nationwide legal market next year, a market that analysts predict could top $10 billion in 2018.

Only a small class of companies in Washington State has figured out how to do this—how to get their brands beyond state borders. Our state is notoriously difficult on pot producers as it is. Not many companies have even found a way to survive Washington's extremely competitive cannabis marketplace, let alone survive with enough capital to export their brands elsewhere.

There's a reason for that. Washington is the only state in the country where recreational pot farmers are prohibited from selling their pot directly to customers. This means that pot producers and processors must compete against each other to get into retail stores, where the odds are stacked against them: There are more than 1,000 producer/processer licenses and only about 500 retail stores. Companies here are under more pressure than in other states to create products that look good, generate positive word of mouth, and attract new customers.

But this competition has a clear economic upshot: It has forced companies to create an unprecedented wealth of pot brands, the likes of which you don't see in other states.

Washington has more than four times the number of pot brands and products as Colorado, even though recreational weed went on sale in Colorado first. That figure comes from BDS Analytics, a consulting firm based in Colorado that uses retail data to analyze the nation's legal weed market. Over the last 12 months, BDS Analytics tracked 1,083 cannabis brands producing 45,000 unique products in Washington. Colorado had only 274 brands producing about 11,000 unique products. Oregon had 431 brands creating about 10,000 unique products.

Those discrepancies are partly due to the difference in public disclosure laws between different states—Washington's laws make every cannabis transaction a matter of public record, which is not the case in Colorado or Oregon—but there are also just a lot more pot brands in Washington.

Many pot brands are struggling to stay afloat in the era of cheap legal weed, but some have managed to rise to the top of the pack. The companies that have succeeded have built brands with packaging and marketing to rival products found in any conventional retailer, and are now finding out they can export what they've learned to other states. By creating a particularly cutthroat marketplace for producers, Washington's regulators may have ensured that we produce the first Starbucks or Microsoft of cannabis.


Recreational weed is now for sale in Colorado, Washington, Oregon, Alaska, Nevada, and Uruguay, with recreational stores poised to open next year in Maine, Massachusetts, California, and Canada. Portugal, Spain, and the Netherlands have fully decriminalized possessing weed, and even allow various forms of pot stores, but it is technically still illegal to sell it there, which makes it impossible to do business in those countries... for now.

With momentum clearly favoring cannabis reform, entrepreneurs everywhere have their eyes on this interstate and even international market just starting to open up. The drug might still be federally illegal in the United States, but these executives are in a race to establish the first recognizable, trusted, and widely available pot brands out there. Figure out a way to do that, and these companies will likely reap huge rewards.

It's far too early to describe any of the aforementioned Washington brands as recognizable, trusted, and widely available. And frankly, any weed business at all is a risky investment during the Trump administration. But that hasn't deterred some companies from making ambitious expansion plans. It's entirely possible the future Boeing of bud will come from Seattle.

Shmuel Tennenhaus, cofounder and CEO of Seattle startup Lemonhaze, which tracks retail data in Washington's market, said Washington's wall between retailers and producers is the chief factor forcing the development of these professional brands.

"Washington State is the capital of brands, and that's simply because of vertical integration and how we are not vertically integrated," Tennenhaus said. "It's not just brands, it's the type of branding and the number of products. We see it being unique to Washington State. Just like Microsoft and Starbucks—these huge brands that started here—I think you are going to see that with weed brands."

You may have noticed a few out-of-state brands are starting to find space on Washington's retail shelves, as well. They're often attached to celebrities—like Marley Natural, named after and run by family members of the late Bob Marley, or Willie's Reserve, Willie Nelson's pot brand. However, these out-of-state brands might not be doing as well as you'd expect in Washington's difficult marketplace. Tennenhaus, who was a vice president of marketing for Big Fish Games before launching Lemonhaze, said with so many other brands in the local marketplace, celebrity brands don't appear to be gaining traction with Washington customers.

"We have not seen any of those brands top the charts," Tennenhaus said. "The barrier to entry to create a brand is so low today, I just don't see that [celebrity] name being such a helpful selling tool."

Howard Lee, the CEO of Tarukino, was confident that after fighting through Washington's marketplace, Tarukino's brands were ready to go anywhere.

"If we can make it work in Washington, we can make it work anywhere," Lee said.


Just like Tarukino, the headquarters for Saints Joints hardly looks like the location for a trailblazing juggernaut of a brand. But perhaps that's all part of a mega-brand's story: Apple started in a California garage, Amazon started in a garage in Bellevue, and Saints started in a former Mexican restaurant in Seattle's Georgetown neighborhood.

Inside, joint-rolling equipment sits on Spanish-tiled counters and pot plants grow in front of the rounded brick walls. Despite these scrappy headquarters, Saints has been able to distinguish itself in one of the most commodified types of pot. Whereas Tarukino's sodas and vitamin waters are complicated products, limiting their competition, Saints has found novel ways to distinguish itself among hundreds of different companies producing pre-rolled joints.

Lawrence "Larry" Perrigo, the owner of Seattle Green Bud, which produces Saints, will tell you that he uses only high-quality flower in his joints—no garbage trim cuts allowed. I've smoked his joints, and they really do taste better and smoke smoother than most of the joints on the market, but there are plenty of other companies rolling top-shelf flower into joints. What sets Saints apart is not only what Perrigo puts in his joints, but also what he puts his joints in. Saints are sold in a hard-shelled pull-out box that is covered with illustrations by Bay Area artist Jeremy Fish. The box and the art change with each strain variety, creating a collect-them-all incentive.

Perrigo also said Washington's competitive market forced brands like his to distinguish themselves faster than growers in other states.

"These giant grows [in other states] haven't thought about brands until now. They wouldn't last a day in Washington," Perrigo said. "Here, we are all creating these brands, where nobody else is forced to do this."

Perrigo's Saints brand caught the eye of Ryan Jennemann when he came to Seattle this year searching for new strains for his medical grow, THC Design, in California. Jennemann saw packages of Saints and reached out to the company. Within a couple months, the two companies had inked a deal, giving THC Design the rights to produce the Saints brand in California.

"We just thought it was a perfect fit: Their company ideals were very close to our ideals, everything from the cultivation to the selling of the product," Jennemann said.

Jennemann said California's medical market has strong brands of its own, but they're often selling an inferior product.

"You don't have a lot of companies that know cannabis and know branding," Jennemann said. "I'm making extremes, but you either have a really good product, a really good grower, and they don't do branding and it looks like shit, or you have the opposite, the company comes in and it has just the most insane packaging and marketing, but you open it up and it looks like crap on the inside."

He said Saints was unique for being Clean Green Certified (a certification similar to USDA Organic, but for cannabis) and having distinct packaging. He said Washington's market is well ahead of Colorado's in terms of branding.

"Colorado was way behind on how Washington had brands from the beginning," Jennemann said. "California had brands from before the beginning, but Colorado took a couple of years to get their foothold on brands together, [and they're] just starting to see high-end packages and high-end brands. They seem to be a little late to the branding party."

Will pot consumers in New York City and Miami someday be buying their pot products from brands that originated in Washington, just like they do for software, coffee, and airplanes? There are a lot of unknowns between now and a nationwide market for pot—but Washington has as good a head start as any state.


That doesn't mean business is booming for everyone. For every Washington brand setting up shop in other states, there are dozens that have stopped doing business entirely. The lack of vertical integration and the abundance of producers appear to be driving most companies' profits into the negative. An analysis of the state's traceability system accessed through TopShelfData.com shows that only 67.2 percent of the state's pot producer or processor licenses reported income in September, meaning only 787 of the state's 1170 licenses are active.

Greg Shoenfeld, the vice president of operations for BDS Analytics, cautioned that Washington's abundance of brands doesn't necessarily mean they are stronger than brands in other states.

"You are certainly correct that the lack of vertical integration has created the opportunity for brands to evolve differently in WA than in other states, but does that mean they are stronger?" Shoenfeld wrote in an e-mail. "Trying to measure the strength of a brand in one market vs. a similar but different brand in another market is problematic. I certainly see Washington brands starting to export to other states, but I don't think I am seeing that more than from Colorado or California."

Adam Smith, a co-owner of Avitas, which is now producing and selling cannabis in both Washington and Oregon, said Oregon's brands have quickly grown in the last year and now rival Washington's. Smith added that Washington's current market structure might even be stifling retail brand development by limiting the amount of competition between retailers. Oregon retailers have improved their customer-service experience beyond what Washington offers, which helps individual brands connect with customers, according to Smith.

"No other state has the inverted pyramid of supply to outlets that Washington has, and that results in Washington having the cheapest weed in the country because there's just so much competition at the producer level," Smith said. He called the structure here "way out of balance."

As for the question of federal law: Will multistate deals attract the ire of US attorney general Jeff Sessions? Sam Mendez, an attorney and the former executive director of the University of Washington's Cannabis Law and Policy Project, said it's hard to predict what the Trump administration will do, but he didn't expect multistate deals to be shut down by the federal government.

"I don't think it makes sense to try to predict how an irrational administration might rationally act, nor do I think [the Trump administration] has much regard for Obama-era policies like the Cole Memo. So they could really just go after whoever they feel like," Mendez said by e-mail. "That said, I think it's more likely [for] them to go after truly 'bad actors' rather than state-legitimate businesses, even if they are big ones with brands stretching across other states."

To repeat: None of these legal cannabis companies are moving pot products across state lines. There are a variety of ways to create a multistate pot brand, and each corporate structure varies based on how involved the parent brand is in the local market. Many of these companies, like Saints and Tarukino, aren't even producing the pot products in other states. They are instead setting up licensing deals where a separate local company pays the parent brand to produce the product locally. Other companies, like Avitas, own the local company but are still licensed in each state separately.

When asked if he was worried about speaking to a reporter about what his company is up to, possibly attracting the attention of an attorney general who once testified in Congress that "good people don't smoke marijuana," Perrigo said he wasn't worried about it.

"No, there's no such thing as bad publicity," Perrigo said.