Pubdate: Thu, 17 Jul 2014
Source: Boulder Weekly (CO)
Copyright: 2014 Boulder Weekly
Contact:  http://www.boulderweekly.com/
Details: http://www.mapinc.org/media/57
Author: Leland Rucker

WASHINGTON TAKES A DIFFERENT PATH TO CANNABIS

The state of Washington started selling recreational cannabis last 
week, producing many of the same headlines that dominated the first 
few weeks of January sales here in Colorado. There are certainly 
similarities in the way the two states have approached legalization, 
but each has staked out its own direction, and it will be interesting 
to see how each fares as times goes by.

Both states allow adults over 21 years of age to purchase and possess 
an ounce of cannabis for personal use subject to regulation, 
licensing and taxation. Washington doesn't allow residential 
cultivation, while Colorado allows adults to grow up to six 
unlicensed plants, although medical patients can grow their own in 
both states. Washington, unlike Colorado, doesn't allow adults to 
"gift" or transfer up to an ounce of cannabis to any other adult as 
long as no money changes hands.

Both have adopted the same DUI law standard, that anyone with a blood 
limit of five nanograms of THC shall be considered impaired. Although 
the Colorado version allows a defense that the person wasn't impaired 
at that level.

Both states had medical cannabis laws in place before the 2012 
elections that legalized it, and each built upon its own medical 
framework. Tax structures are similar. Washington levies a 25 percent 
excise tax on producers when they sell to retailers and another 25 
percent on retail consumers, plus sales and local taxes. Colorado 
imposed a 15 percent excise tax and 10 percent sales tax on top of 
the state's sales tax, and allows cities and counties to impose their 
own taxes over that. (Boulder voters, for instance, approved a 5 
percent excise tax and 3.5 percent sales tax on top of state taxes.)

Retail sales in Colorado are supervised by the Marijuana Enforcement 
Division of the Department of Revenue. Washington's market is 
overseen by the Washington State Liquor Control Board.

Colorado began with a vertical integration market approach based 
around its medical marijuana rules, with the entire supply chain - 
production, processing and retail - operated by the same entity. That 
ended on June 30, the same day the state began accepting applications 
from new businesses beyond the original medical licenseholders who 
were allowed to apply beginning last year. Those applications will 
begin being processed within 90 days, and competition should become 
even more intense as those businesses open.

Perhaps the biggest difference is that Washington is trying to 
control the amount of cannabis that can be grown and produced each 
year, the rationale being that it will help keep extra product from 
being moved to other states or sold on the black market.

Colorado basically began its retail market by offering retail 
licenses to existing medical businesses, while, in essence, 
Washington started over. Currently, Washington's production is capped 
at 80 tons of product, 40 tons for usable marijuana and 40 tons for 
other products like tinctures, edibles and oil. The state also limits 
the amount of space that can be used to grow recreational cannabis.

We should see soon if that number holds for Washington's 6.9 million 
residents. A new study, "Market Size and Demand for Marijuana in 
Colorado," conducted by the Marijuana Policy Group for the Marijuana 
Enforcement Division, suggests that those numbers might fall short of 
Washington users.

The study is a collaborative effort between the University of 
Colorado Boulder Business Research Division and BBC Research & 
Consulting in Denver. It relied on surveys, state demographics and 
estimated marijuana usage patterns in order to determine the 
estimated market size in Colorado, so the researchers admit up front 
that the true size of Colorado's market may be smaller or larger than 
their estimates. But they mark the potential range for total adult 
marijuana demand, including visitors, at between 104.2 and 157.9 
metric tons this year. That's a pretty wide gap, but even at the low 
end is much higher than the Washington numbers.

The Marijuana Policy Group Report includes some other fascinating 
stats. It estimates there are about 485,000 regular adult users in 
Colorado, which represents 13 percent of the 2014 adult population in 
Colorado. Another 201,000 adults (3.8 percent of the state 
population) reported using marijuana within the past year. And though 
this report only considers adults, it notes that another 184,000 
residents under 21 reported past-year use, of which 59,000 reported 
past-month use.

The product estimates are 31 percent higher than a recent Department 
of Revenue assessment, 89 percent higher than a study by the Colorado 
Futures Center and 111 percent higher than an older study by the 
Colorado Center for Law and Policy. "The main difference is caused by 
much heavier dosage amounts consumed by the state's 'heavy user' 
population - those who consume marijuana on a daily basis," the 
report says. Those daily users drive almost 70 percent of total 
marijuana demand, and the prevalence of daily users in Colorado is 
higher than the national average.

The tourist market is strong, accounting for about 20 percent of the 
total sales. However, most of those tourist sales are taking place in 
two areas. Out-of-state visitors currently represent about 44 percent 
of Denver metro-area retail sales and, not surprisingly, about 90 
percent of retail sales in mountain communities reporting, which 
includes Summit, San Miguel, Clear Creek and Gilpin counties. Maybe 
those numbers will begin to attract the tourist industry's attention.
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MAP posted-by: Jay Bergstrom