Recreational Pot Stores in Washington State Battle Price Gouging, Shortages

Washington state started selling marijuana over the counter legally on July 7, and local recreational marijuana sales have created a demand that far exceeds the supply, leading to tense situations between growers, suppliers, and retail outlets. Out of 2,500 or so growers who applied to the state for licenses to grow marijuana, just under 100 have been approved. Many growers that have licenses haven’t had enough time to harvest their product, leaving demand higher than supply and causing a lack of quality control. (It takes at least 10 weeks to grow a marijuana plant that is mature enough for proper harvesting.)

Ramsey Hamide, owner of main Main Street Marijuana, a recreational marijuana store in Vancouver, says that price gouging has gotten so bad that he’s been forced to temporarily close up shop according to local newspaper The Columbian. After sampling a shipment of material from a new grower this week, he decided to close until he can secure more variety, lower prices and higher-quality buds. He told reporters, “I’m not going to let these guys hold us hostage anymore. It’s hurting the entire system, and it needs to stop. By continuing to play ball with these guys, it’s just making things worse.”

The lack of quality control has been attributed to opportunistic growers who have been capitalizing on high demand by harvesting what they have too early and selling parts of the plant that would usually be tossed out or processed into other products, such as seeds and stems, to add to the weight of the product. “The market needs to reset a bit,” Hamide said. “Growers aren’t selling premium product. We need to have these guys basically be told ‘No.’ ”

Several new growers are currently nurturing crops that should reach full production by mid to late August, and by late September the outdoor growers will have an even more robust supply for the state’s stores, and supply problems should wane. Until then, most shop owners say they are at the mercy of what they can get, and at the prices they get for retail, they can afford to be picky. Customers have been paying somewhere between $20 to $30 a gram since the first stores opened in the state.

Demand for recreational marijuana is not expected to dissipate, and even though sales revenue may not be as high as initially projected due to economic barriers and shortages,  the rise of the recreational use is expected to help fill coffers for local economies as well as the state. Marijuana on sale in Washington is taxed three separate times—25% each at the production, wholesale and retail levels—in addition to state and local sales taxes.