How would you feel if you sold your home and used your father's retirement savings to start a business, only to lose it all after years of grueling work?
For Rebecca and Bjorn Hartman, the co-owners of a legal weed farm in Yelm, the answer is: ecstatic.
"The first few days after we decided we were done, we were just giddy, just happy to not be a slave to it anymore," Rebecca Hartman said.
That's the reality facing a growing number of small weed farm owners in Washington. They lined up by the thousands to get the coveted licenses to legally grow weed, but four years into Washington's "green rush," they're finding it might be nearly impossible to actually turn a profit. Faced with the plummeting price of pot, the huge burden of complying with state regulations, and the competition with big farms that sell the majority of the state's pot, small farms are starting to give up.
Micah Sherman, director of operations for Raven Grass farm in Olympia, said structural problems in Washington's market are likely leading to an exodus of smaller farms.
"I anticipate anywhere from 25 to 50 percent of growers will either drastically reduce or shut down operations entirely this year," Sherman said. "People are currently dumping large amounts of product at seemingly liquidation prices. There are numerous stories of desperate attempts at selling product at any price to pay bills and a general sense of impending doom among growers."
In many ways, this turbulence in the market is the natural outcome for any industry that goes from black market to legal overnight—capitalism always has winners and losers. But the cannabis industry in Washington faces burdens that are wholly unique.
Stephanie Boehl, an adjunct law professor at Seattle University and a co-owner of a pot farm in Okanogan County, said cannabis business owners are forced to pay more for every aspect of their business because of pot's stigma and federal illegality.
"Every transaction in the industry usually comes with some sort of marijuana premium, whether we are dealing with an electrician, supplier, landlord, or private investor," Boehl said. "So that has a cost. But we also have the weakened position of bargaining with zoning restrictions and zoning laws that are not fair, and we are not in a position to push back because we are regarded as an illegal industry, regardless of what state law is."
With pot's current low price (the average wholesale price per gram was just $2.51 last fall, according to TopShelfData.com), it doesn't take too many of these additional costs to shave off any remaining profit for the farmer.
When the Hartmans decided to close their farm, they destroyed all the remaining weed, figuring it would probably cost them more to sell it than what they would earn.
While small farmers pack up, big farms are only getting bigger. This past October, the state's largest producer, Northwest Cannabis Solutions, sold more weed ($2.647 million) than the state's 500 smallest farms combined ($2.638 million).
Bjorn Hartman said he isn't angry with those large farms, he just wants to see the market treat small farmers fairly. "I don't want to make it seem like we are blaming anyone other than ourselves," he said. "Ultimately, we are responsible for our failure because we could have done things differently."
Their biggest flaw may have been simply being too small. They never hired another full-time employee.
But Washington's market doesn't appear to support such small-scale farming, which is a shame. Our state is well-known for tiny wineries, coffee roasters, and breweries. Some of the best breweries in Seattle have as few as one or two employees, and I love being able to buy weed from equally small businesses.
But as more farms like the Hartmans' go out of business, shopping small for weed might be a thing of the black-market past.