Too much pot: Growers struggle with glut of legal weed

[Sopkoviak]

SEATTLE (AP) — Washington's legal marijuana market opened last summer to a dearth of weed. Some stores periodically closed because they didn't have pot to sell. Prices were through the roof.

Six months later, the equation has flipped, bringing serious growing pains to the new industry.

A big harvest of sun-grown marijuana from eastern Washington last fall flooded the market. Prices are starting to come down in the state's licensed pot shops, but due to the glut, growers are — surprisingly — struggling to sell their marijuana. Some are already worried about going belly-up, finding it tougher than expected to make a living in legal weed.

"It's an economic nightmare," says Andrew Seitz, general manager at Dutch Brothers Farms in Seattle.

The comments section is an absolute riot!

Pot-heads calling for lower taxes and less government regulation.

They all sound like a bunch of TeaBagging Republicans!

http://www.komonews.com/news/local/Too-much-pot-Growers-struggle-with-glut-of-legal-weed--288787991.html#comments

[CK_John]

1. These are weed investors not weed users that will sell out to the tobacco industry.

[KamaAina]

2. You can't be too rich, too thin, or....

[MohRokTah]

3. It was the green rush.

Sorta like a gold rush. Too many people going after the same thing gluts the market.

[seveneyes]

4. Predictable. How about a bake sale?

For a weed that one can rarely screw up growing, it's a lot of fuss about little.

[Major Nikon]

10. Don't you mean a baked sale?

[FrodosPet]

44. Except for mold, insects, overfeeding, poor light cycles, removing males...

Growing ditchweed is easy. Growing PRIMO marijuana is hard work.

No personal experience, but I know some MMJ cardholder growers, and I have read books and websites.

[onethatcares]

5. law of supply and demand says

we can go back to three finger lids and cheap rolling papers.

[TeamPooka]

37. 3 finger lid was $40 when I was a teen back in the 70s. nt

[onethatcares]

40. well, not that I have any experience

in those things, but I was told that 3 finger lids were $20.00 in the late 60s.

Maybe that was just an urban legend, I have a tendency to forget things.

[Munificence]

6. Let's see

Buy weed, search the stuff you like for a seed or two, plant and there you go, weed for life.

If corn was $4000/lb there'd be a lot of backyard corn growers and you'd be able to buy it for $1 a can once everyone started growing.

[NightWatcher]

7. They need to open a Florida Factory Outlet Store

I'd love to get some of the factory overruns.

[dembotoz]

12. i love outlet malls

[NightWatcher]

13. Stoned is the only way you can get me near one of those places

[Motown_Johnny]

8. Economic Darwinism

It is not reasonable to expect that everyone who got into this business will be a success.

I am not surprised in the least that some will "go belly up".

Why is this even news?

[madville]

9. Overregulation and high taxes

Can mess up any industry, especially one where there is still a cheaper black market alternative for buyers.

There is no significant black market competitor to beer because for the most part it is still fairly cheap. If the government put a $20 a six-pack tax on it tomorrow you would see people making and selling homemade beer all over the place.

Look at cigarette taxes in NYC. They are high enough to support the demand for a black market.

[pnwmom]

11. They're sounding like a bunch of Libertarians, who have always been progressive as to pot

but right-wingers economically.

[Warren DeMontague]

19. Maybe they read just the Oregonian, and can do math

and realize that come next year, Oregon is going to tax legal weed at a significantly lower rate than Washington State does.

[pnwmom]

23. We have plenty of Libertarians here, especially among the computer geeks,

the same as in the San Francisco area.

But you're right -- the state needs to pay attention to the situation in Oregon.

[Warren DeMontague]

25. As a big-D Democrat who leans small-l libertarian on issues of personal choice and freedom

I think our party does better when we court those folks.

Not on the field of "no taxes" but definitely on the field of "keep government out of the bedrooms, bodies and business of consenting adults".

Fortunately the Democratic Party, locally, seems to have gotten the memo in the Pacific NW. Nationally, not so much.

[Jesus Malverde]

27. Sad to see the likes of Dana Rohrabacher leading the way vs. Dianne Feinstien calling for..

prohibition - More arrests, more people in jail, more people mandated to faux treatment, and having their lives turned upside down for enjoying a substance documented to be safer than alcohol. Her drug policies are not progressive.

[Warren DeMontague]

28. yeah DiFi has never been what I would consider cutting edge progressive.

To say the least.

I much prefer Merkeley and Wyden, myself.

[ND-Dem]

33. oregon taxes everything at a lower rate because they don't have a sales tax. but they

have an income tax, so they tax that at a higher rate.

[Warren DeMontague]

36. Yes, but specifically legal Oregon Marijuana will be taxed lower by a large margin than Washington.

The specific taxes on legal Marijuana go beyond ordinary sales tax.

http://blogs.seattletimes.com/pot/2014/11/07/washington-pot-retailers-brace-for-oregon-sales-tax-differences/

[ND-Dem]

39. all the taxes mentioned in the story are normal washington business and sales taxes.

I didn't see any special 'pot tax'. (though I just skimmed)

[Warren DeMontague]

41. Here are the pertinent paragraphs from the seattle pi blog I linked:

(emphasis added)

While everyone waits for Oregon’s market to take off, retail marijuana sellers in Clark County are wishing for major changes in Washington’s marijuana tax system. Oregon’s law charges a one-time excise tax to producers only on marijuana sold at wholesale: $35 per ounce for flowers, $10 per ounce for leaves and $5 each for immature plants.

Prices at Washington pot shops have been higher than expected, leaving many consumers turning to significantly cheaper options on the black market or in medical marijuana. Among the factors driving up the price of legal pot is the 25 percent tax charged at each tier of the industry: producers, processors and retailers.

The total tax rate is compounded by state and local sales taxes and the state’s business and occupation tax on gross receipts. Unless that changes in the next couple of years, Loren Carlson, who opened Clark County’s third pot shop in Battle Ground this week, and other sellers expect consumers to soon find better prices in Oregon.

So in addition to the sales tax in WA, they are apparently taking 25% out of the chain more than once- a 25% tax on producers, a 25% tax on processors and a 25% tax on retailers, which I'd imagine adds up, even if- and I fully admit I don't know the mechanics of the industry- you've got one entity doing both producing and processing.

My larger point was, I don't think this is so much a philosophical axe-grinding of 'pothead libertarian types' so much as probably some reasonable concern about arguably excessive taxation, particularly now that other states are getting involved.

[wildbilln864]

14. I volunteer...

to take some off their hands to ease their burden.

[freeplessinseattle]

18. I'm not complaining, I'm loving the deals and variety now-with speedy delivery!:)

Funny how the quality has increased so much since I started partaking nearly 25 years ago, but the price has always stayed steady at $40/eighth, sometimes $50, depending.

Until recently, now it's not uncommon to see top shelf bud for $180/oz-and I used to think an oz for $250 was a good deal!

I feel for those who invested so much and are hurting. Hopefully this is just the effects of a transition. For the long-term though I am sure black market prices will only get lower.

[wildbilln864]

24. Used to be able...

to get a quarter pound here for $50.00 when I was a teen. Some killer shit too. Oz's sold for $20.00 Now they sell the medical here for a ridiculous $15.00 to $ 20.00/gram.
Too rich for my blood as they say.

[Baclava]

15. "Pot-heads calling for lower taxes and less government regulation"

The G-men in the suits and dark glasses are raking in the profit

it's a racket

[KG]

16. gee, pot went legal and the whole state didn;t become stoners?

[Warren DeMontague]

17. Get smokin, Seattle!

DO YOUR PART

[freeplessinseattle]

20. I'm trying my best to help out!:)

Had some Dutch Treat delivered today, only 15 minutes after my order. Paid $40, + tip but is primo, dense, and I didn't have to deal with traffic

Sometimes I can get a very nice quarter for $50, but wanted to splurge today. So worth it, ummm, definitely a repeat strain.

[Warren DeMontague]

22. Seriously... I remember how it used to be.

Strange Days, Strange Days.

[ChosenUnWisely]

21. Growers needs to grow craft weed so to speak

just like craft beer

I am hoping the glut in weed makes it to the East Coast!

If ya got extra head east young man!

[Jesus Malverde]

26. It grows like a weed.

Its a no brainer that legal weed would not command the prices found on the black or grey market.

In california the growers are hiding up in the hills of the emerald triangle. Once legal and grown like corn or any other crop in the central valley the price per pound might be $100. vs $1000.

[easychoice]

29. $25.00 a gram X 454 ='s 11,350.00 a pound. Thats what it sells for here.

that is ridiculous for something I can grow for $10.00 a plant.Just pure greedy people..

[Recursion]

30. Yglesias has argued that the market price of weed would be about three cents for an ounce

That is, along the lines of alfalfa (which, really, makes sense: "grass" and "weed" aren't just nicknames).

[workinclasszero]

31. If MJ was legal in all 50 states

this probably would not be a problem.

Just sayin.

[LeftyMom]

32. CA dispensaries had the same thing happen.

It's predictable.

[hughee99]

34. For years, the "legalize it" crowd has been talking about all the uses for it other than

smoking it, although if I understand correctly, the "good stuff" and the industrial stuff aren't the same thing. I always found this to be a somewhat dishonest argument since I never once met someone who was only interested in legalizing the industrial stuff.

For the record, I don't smoke but I'm in favor of making it legal.

[bemildred]

35. They don't call it "weed" for nothing.

The natural cost to produce usable product is about $0.01/oz or so.

[FrodosPet]

45. That is an outdoor, non-irrigated, non fertilized grown on someone else's property price, correct?

Full of lumber and popcorn (stems and seeds). Because that's definitely not an indoor hydroponically grown.

[TeamPooka]

38. Government mandating high prices will just allow the black market to flourish.

[Jamastiene]

42. That is why it needs to be legalized in the rest of the states.

They could sell lots more if more states would legalize it.

[VScott]

43. If not for the taxes and regulation

the ballot initiative never would have passed.

[bigtree]

46. this is a boon for consumers

...who could face an inflationary market, driven by opportunistic and predatory taxes.

I like the potential for cheaper weed and have just a modicum of sympathy for growers who undoubtedly anticipated getting rich.

(not presently a smoker, until legalization comes to my state and my job won't can me for a positive drug test)