Growers struggle with glut of legal pot in Washington state

[Harry Gypsna]

Once recreational pot is fully legal, truly personal homegrowers will be able to grow whether they ban it or not.
Here in the UK, it is legal to make your own wine, beer, cider, mead etc. You can make as much as you want, provided it is for your personal consumption (including social sharing, you can serve it to guests etc). it is only when you start selling it that you get in trouble. Now, it is completely illegal to distill any hard liquor at all. No moonshine, no pocheen, no home made voddy. Loads of people have stills in the shed, nobody gets busted unless it goes boom. They can't justify a squad to track down percy stills.
Legal weed will be like most other things in the way our business world works. Look at food, most is produced by a few big operators using the pile em high and flog em cheap mentality. This will be how it is with weed, and just like with food there will also be small scale producers making top end product for a premium.
You can buy a huge block of supermarket own brand cheddar, or you can pay a little more and buy your cheese from somebody who knows nothing but cheese and dedicates their life to making the best product they can.
Budweiser exists...and so do quality ales made on a small scale.

I should also add that in terms of numbers, next to nobody homebrews compared to buying beer/liquor.

 

[TheArchitect]

Separate growers are likely to become practically obsolete. Most of the companies doing well in Colorado appear to be opening their own grows so they don't have to depend on growers.

Absolutely. I'm structuring my business around that idea right now.

Create a brand, create the infrastructure to feed projected demand, and eventually create the branded retail outlet, while in the interim moving branded product to local clubs to get my name out there and accumulate capital for expansion.

Luckly for me I'm in a state yet to legalize so I can plan for these eventualities, and I can have contingency plans in place for any changes in the way the legal market is structured.

I think people are in for a rude awakening wrt how low prices of cannabis will go. There are places that offer 130/oz to consumer of some at least halfway decent product, and given a choice I think the majority will chose the 130/oz over the 230+/oz amost everytime even if the 230+ has value added through quality overall.

In the end I think the way to go is, have your own nursery, vegetative chambers/room/GH, flowering, processing. Then move flowers to the store and your hash material to your extraction facility/room, then boot some concentrate to retail and the rest to your own cannabis kitchen/food factory.

In this way you have complete control over every aspect, it makes it easier to run the show if you know every few days/weeks you have x amount of flower and x amount of trim and you can create a flow.

Obviously you still network and have business relationships, having a strong network of like minded friendly business relationships is a key to keeping the industry and indivuals strong, especially wrt lobbying for change.

 

[HempKat]

Absolutely. I'm structuring my business around that idea right now.

Create a brand, create the infrastructure to feed projected demand, and eventually create the branded retail outlet, while in the interim moving branded product to local clubs to get my name out there and accumulate capital for expansion.

Luckly for me I'm in a state yet to legalize so I can plan for these eventualities, and I can have contingency plans in place for any changes in the way the legal market is structured.

I think people are in for a rude awakening wrt how low prices of cannabis will go. There are places that offer 130/oz to consumer of some at least halfway decent product, and given a choice I think the majority will chose the 130/oz over the 230+/oz amost everytime even if the 230+ has value added through quality overall.

In the end I think the way to go is, have your own nursery, vegetative chambers/room/GH, flowering, processing. Then move flowers to the store and your hash material to your extraction facility/room, then boot some concentrate to retail and the rest to your own cannabis kitchen/food factory.

In this way you have complete control over every aspect, it makes it easier to run the show if you know every few days/weeks you have x amount of flower and x amount of trim and you can create a flow.

Obviously you still network and have business relationships, having a strong network of like minded friendly business relationships is a key to keeping the industry and indivuals strong, especially wrt lobbying for change.

Well I know it doesn't surprise me one bit that people are standing firm for better prices one can't ignore that a lot of the movement in favor of marijuana were weaned on a much more affordable supply of pot in the 60's thru 90's that still got people plenty high and was so affordable people shared it freely. Now it's gotten to the point that people have to sacrifice something else to get their marijuana fix whether it be from the street or the store. I think people are going to be able to hold out for a much fairer market to the consumer. There will also be a strong desire to just grow it themselves. Once you take the risk of getting busted out of it people will be able to take greater risks.

Another big factor is there really isn't a major withdraw problem with marijuana other then the unpleasant reality of having to deal with the pressures in life marijuana helps to suppress. That is to say it's not as hard to do without it as some of the more problem drugs such as tobacco and alcohol. This would make it harder to place "sin taxes" on marijuana which is why they tax the shit out of tobacco and alcohol and still allow it even though there is no question of how dangerous it can be for people to use tobacco or alcohol. I bet if we made a law that prevented any kind of taxing on tobacco and alcohol the powers that be would ban that shit for health and safety concerns I sometimes wonder if marijuana was as hard to quit would the governments be more lenient on it? I know if they could tie even half the harmful affects of tobacco and alcohol to marijuana conclusively then they would never legalize it. They wouldn't need propaganda they could justify it from a factual risk analysis.

 

[huligun]

People have always had a choice... Pay what is asked for herb or make their own at extreme risk. Risk like arrest and robbery, not small stakes.

I love to grow weed, but it is extremely consuming. Many stress constantly over the above risks, bugs and you name it. Just buying an oz for 150 is easier.

I do grow, but it is a small little hobby thing and completely legal under the mmj laws of my state. If the whole things goes fuck I am okay with it.

 

[Bradley_Danks]

It's no doubt the businesses with higher quality producing crops will have a good chance of sticking around. It's those pushing bottom grade outdoor that are going to be left in the dust. Just like the wine industry their will always be room for high quality product. Once international marijuana trade opens up things will really start popping off. The problem now is limiting business to your own state, WTF?

 

[GuerrillaRed]

I shouldn't say anything.

 

[HempKat]

It's no doubt the businesses with higher quality producing crops will have a good chance of sticking around. It's those pushing bottom grade outdoor that are going to be left in the dust. Just like the wine industry their will always be room for high quality product. Once international marijuana trade opens up things will really start popping off. The problem now is limiting business to your own state, WTF?

Well the problem there is interstate commerce is subject to Federal rule and since it's not legal with the Feds, transporting it across state lines is just as criminal as selling it on the black market. Subject to the same prison sentences. That's why it's so good for the Feds to take the position they do. They can affectively contain and control any market simply based on jurisdiction (Federal law trumping State law).

One sad but likely outcome of if they ever legalize it nationally it will just be because it makes a lot of money for most of the very same people that have traditionally held us back. Our only hope then is if it does get widely shared and used and thereby causes a "Great Awakening" leading to a fundamental shift in the laws.

That seems to have been happening to some degree already. By now an overwhelming majority have already tried the "Devils Weed" and found there to be more devil due to the laws against it then to the weed itself. More and more people of legal voting age have at least tried pot for a while and have a perception based on experience rather then propaganda. Thereby allowing an ever increasing demand for it rather than an objection to it.

 

[HempKat]

Washington State can suck my dick. Corrupt fucking local government that has done nothing but screw this all up so a few people can make all the money. Fucking pigs each and every one of them. Biggest reason I moved is so these cocksuckers wouldn't get the tax money I generate.

That's going to get worst since the biggest selling point for legalization right now is the profit to be made from it. If in all these states that have legalized if the incentive of a lucrative tax revenue stream was never part of the deal, I wonder if it would have ever been legalized?

 

[GuerrillaRed]

Yeah

 

[HempKat]

Oh totally, man. What's happening though is the state is trying to rape the industry for 75% tax on Cannabis (voted for by the retards in King County, funny enough all the conservative counties voted against this tax) yet their legal system is completely corrupt and not functioning. So anyone who's trying to play by the rules is going bankrupt.

Funny enough, Washington has by far one of the best medical systems in the country. So all the rec people are buying weed under the table from med producers and there's a lot of black market shit going on. So since the local government isn't getting their blood money from a corrupt piece of shit system that is gangraping the industry and the consumer. Their thought is to start fucking with medical and shutting it down. Meanwhile they had a "lottery" and handed out a pathetically small amount of licenses which all fucked up and weird.

The whole thing is a mess and only getting worse. I absolutely detest the local Washington State government and watching them absolutely rape a golden opportunity like the emerging cannabis industry has clearly illustrated to me how government really works in this world. Fuck 'em.

Makes you wonder if the intent all along was to deliberately fail so they could at least say they gave it a try?

 

[GuerrillaRed]

Yeah

 

[GuerrillaRed]

I need to stop talking about this, it gets me all fired up. But seriously, fuck the Washington State Government.

 

[mowood3479]

....

 

[Dislexus]

And when industrial hemp laws change and massive clouds of ditchweed pollen hit all the outdoor producers... ellipses...

 

[Mad Lab]

Does anyone know the details of 280e?

I find so much mixed information on retail write-offs vs production write-offs.

Is production able to write of expenses relating to the production of the cannabis, just not any expenses that was relating to the sale of the cannabis.

I understand retail outlets are getting raped because everything has to do with sales but is it true production can write off more expenses?

 

[Marcellas]

I bet they get a lot of business from college kids and dumb, younger kids who would pay $23 a gram, and tourists.. I remember I had a buddy who would sell decent (not amazing) shit to the college kids for $15-20 a g, mostly kids out of town; back in the college days

And now that I think of it, I'm sure they used business info and formulas and such to come up with a price point with the highest profit, where people would still pay it.

.... It's funny - Some of the more "gourmet" juice/e-liquid I buy for my e-cig is the same price, $22/30mL which will last me about a week. I'm sure they use business formulas to figure out the perfect price point fpr both

 

[idiit]

Washington State can suck my dick. Corrupt fucking local government that has done nothing but screw this all up so a few people can make all the money[/QUOTE]

^ that's the plan, especially at the fed/international cabal level. opium production in afghanistan perfect example. fast and furious supplying mexican sinola drug cartel with guns another.

the med scene does open up communication lines for paranoid types. seeing a lot of access to elite cuts in med states.

 

[Mad Lab]

So noone is in the production business in WA in this thread? All clueless to details of 280e?

 

[Weird]

http://www.cnbc.com/id/102416865#

Washington has more pot than it can smoke



Supply is outstripping demand in the unlikeliest place—legal recreational marijuana in the state of Washington. Growers who jumped into the new legal market hoping to make a killing in cannabis are now getting killed by a glut of product.

"There is going to be a lot of people who are going to be in trouble," said Ata Gonzalez of GFarmaLabs, which sells cannabis-infused products.

How did this happen? Much of the problem may be due to differences in the legal "adult use" marijuana markets in Washington and Colorado.

In Washington, unlike Colorado, legal pot can be grown outdoors, and there was almost perfect weather last summer in the eastern part of the state, leading to a bumper crop.
Taxes

Washington growers, processors and retailers are each taxed separately, accounting for as much as 75 percent of the retail price. Add in sales tax, and it's very hard to price a product that can compete with the flood of illegal pot coming up from Oregon and California as well as legal medical marijuana—which isn't taxed at all. Now that Oregon has voted to legalize recreational marijuana, a potentially lower tax rate there could hurt Washington even more.

"They've pretty much priced themselves out of the market," said grower Tom Lauerman of Farmer Tom's Organics.
Licensing
Micah Sherman, and Nicole Graf, who moved from Brooklyn, N.Y., to cultivate cannabis, care for the "mother plants" which will seed their 7,000-square-foot indoor farm in a warehouse south of Seattle, last March, in Olympia, Wash.
Gilles Mingasson | Getty Images
Micah Sherman, and Nicole Graf, who moved from Brooklyn, N.Y., to cultivate cannabis, care for the "mother plants" which will seed their 7,000-square-foot indoor farm in a warehouse south of Seattle, last March, in Olympia, Wash.

Washington handed out grower licenses more quickly than retail licenses, creating an imbalance between farms and stores. However, Kevin Oliver of Washington's Finest Cannabis said the glut in supply "will likely disappear in the next few months," as the state estimates another 100 retail stores opening.
Tourism

Colorado benefits from skiing, drawing tourists from around the world in a way that Washington does not. Also, Colorado isn't surrounded by states with a lot of medical marijuana, and it's closer to the Midwest, South and Northeast.

All of this has driven prices down in Washington for farmers like Lauerman.

"In the early days, we were able to get, like, $1,700 to $2,200 a pound, wholesale. Now it's like $700, $800 a pound," he said. "That's not profitable at all. I've got most of my stuff stashed away for later."

He's hoping to wait it out and eventually succeed with a branding strategy that may make him the first grower to put his name and likeness on a line of cannabis products. The label for his Farmer Tom's Organics looks as if Jerry Garcia took over Newman's Own. Lauerman also has released a set of trading cards based on the strains of pot he sells.

Read MoreLegal US pot sales are slamming Mexico's illegal growers

But it may be too late. Lauerman's farm is facing foreclosure, and he is filing for bankruptcy protection. He's not the only one, as growers and retailers have turned on each other. While some growers accuse retailers of demanding unprofitable wholesale prices in order to make a retail profit, Oliver echoed others in saying that "the people who are complaining the loudest about the glut ... are those producers who came online in July and were charging $21 a gram, gouging the retailers because they were the only producers on the market at the time."

Watching all of this from afar is Gonzalez of GFarmaLabs. He's looking to expand from California into Washington.

"The guys that own these facilities that now have all this pot, they owe investors money," he said. "This is a boom like anything else." He's waiting for a bust. "We're going to be able to go in there, and we're going to buy facilities for pennies on the dollar."

It's gotten so bad at the moment that Lauerman said some growers are "giving it away" to help get rid of inventory and build customer loyalty. The situation could be compared to the wine grape glut in California a decade ago, which led to the birth of Charles Shaw Wine, aka Two Buck Chuck. Could there be a Two Buck Toke as the Washington pot industry searches for stability?

As Lauerman pointed out, there's certainly enough product for one: "There's 45,000 extra pounds floating around out there with no home right now."

 

[TheArchitect]

As Lauerman pointed out, there's certainly enough product for one: "There's 45,000 extra pounds of garbage grown by noobs with more money than brains floating around out there with no home right now."

Fixed