ICYMI, the BOTEC Analysis Corporation, the research firm that consulted on I-502, released a report yesterday on the state’s medical marijuana market. Fun fact: We smoke about 16 metric tons of pot a month statewide. I’m sure no one is surprised.
BOTEC was tasked with assembling an estimate of the relative market shares of recreational, medical, and black market cannabis in order to help the Washington State Liquor and Cannabis Board (WSLCB) gauge how many new retail outlets our state will need to meet current demand as the medical marijuana system gets folded into the recreational one. Their estimate? 222.
We currently have 334 allocated retail licenses out there, with 305 of those being current licenses or pending applications. Those 222 new licenses will be distributed county by county, with the top 10 counties for medical sales getting more than everyone else.
That means that places like King Country, where we puff tough, will see a 100 percent increase in total retail licenses, while places like Stevens County will only see a 75 percent increase. In places like Benton and Yakima counties where there are bans or moratoriums on pot sales, they get nada. Seattle will go from 21 allotted licenses to 42. The WSLCB will start processing applications immediately.
“Our goal was clear: to ensure medical patients have access to the products they need,” said WSLCB director Rick Garza in a press release. “There will be more storefronts for patients going forward than are available today. In addition, qualified patients can grow their own or join a four-member cooperative.”
Whether those 222 additional licenses accomplish that goal is certain to be the subject of vehement debate. Current retail license holders would like to see less new competition, while medical marijuana advocates argue that demand in the medical market is much higher than anticipated.
To arrive at its estimates for market shares, BOTEC used the “Monte Carlo method.” If that sounds like a gamble, it’s because it kind of is. But it’s one that’s repeated thousands of times to arrive at an average of all possible outcomes and an upper and lower range of estimates. In the report, BOTEC notes that it is patently impossible to get a direct estimate of the black market’s share of the market, so they were forced to subtract the recreational share (which we have hard figures for) and their variable estimate for the medical market from their estimate of the total market share for the black market (estimated at 38 percent of overall sales).
Obviously, there’s a lot of guessing going on, but it’s about as educated of a guess as one can make when trying to gauge the size of unregulated and untracked markets. The report’s “best estimate” for medical sales was $480 million per year, but only $100 million was reported as revenue to the state by dispensaries (bad dispensaries!), meaning that any chance of basing their estimate in actual reported MMJ income was a pipe dream.
However they arrived at their number, it’s shaping policy from here on out. Now that the WSLCB has spoken on how many new licenses it will issue, it will begin handing them out. It’s already divided the huge pool of new applicants into three priority tiers, which it will use to determine who gets what first.
• Tier I for people who operated or were employed by an MMJ business that had a business license before January 1, 2013, applied for a retail marijuana license before January 1, 2014, and have been up to date on all their taxes and fees.
• Tier II for people who operated or were employed by an MMJ business that had a business license before January 1, 2013, and are current on their taxes and fees, but didn’t apply for a retail license before January 1, 2014.
• Tier III for the rabble.
Prior to the release of BOTEC’s report, the tier system was kind of a madhouse. People were buying and selling their Tier I status on Craigslist, which the WSLCB was not psyched on that, and many lawyers were being retained. Tier II people were biting their fingernails, thinking they wouldn’t make the cut. Tier III people were resigning themselves to their fate. Thankfully, all the hemming and hawing is over.
Whether or not you agree with the final estimate and the WSLCB’s allotment decision, we at least have some clarity. Applicants still have to meet all WSLCB and local requirements for licensing, but even the Tier III people will have a shot, though the competition will be stiff. Tier I had 39 qualified applicants and Tier II had 42. That accounts for 81 applications out of 1,194. Let the games begin.