Washington State becomes the second state in the nation to legalize recreational marijuana, and the first stores there will open for business this week. While the state is expected to have 80 licensed growers and 20 retail shops in play by week’s end, many are already complaining there’s a shortage of supplies — and it’s only day 1.
Government red tape hurts marijuana retailers
Pot’s opening day in the Evergreen state is already riddled with bumps. There are only 18 license reviewers shuffling through 7,000 applications, checking criminal and financial backgrounds, business plans and proximities to schools. This is very time-consuming work.
By early Monday, the board hadn't released a list of all the stores being licensed in the first wave. The first stores will arrive in Spokane, Tacoma, Bellingham and Vancouver, but only one is expected to open in Seattle, which is odd considering it's the most densely populated city in the state and its most liberal on marijuana policy.
Officials eventually expect to have more than 300 recreational pot shops open across the state.
Yahoo Finance’s Jeff Macke says Washington’s marijuana debut is "a disaster structurally. This law was passed in November of 2012. We’ve had plenty of time to see this coming. Apparently Washington [state] didn’t learn from Colorado’s mistakes”
Where there is demand, there needs to be supply
The supply of marijuana product in Washington is already running short. Pot prices were expected to reach $25 a gram or higher on the first day of sales — twice what people pay in the state's unregulated medical marijuana dispensaries. Although 2,600 people have applied to become licensed growers, fewer than 100 have been approved.
Banking on marijuana
It's been more than seven months since Colorado became the first state to allow recreational sales of marijuana, but still the banking system around this new industry is quite immature.
Related: Colorado Gov. still isn't high on legalized marijuana
Macke says the next big hurdle in the evolution of the marijuana business into a fully supported industry “is going to be about banking regulation, which is going to be about dollars.”
Macke adds that currently “banks don’t want to touch any of this entire ecosystem.” He says, "Until you get a situation that these [marijuana] retailers, just like liquor stores -- just like anyone else -- can get loans, buy inventory with that loan and put it on the shelf and sell it and get the circle of virtuous life you get with other retailers, you’re going get hiccups like this.“
Shibani Joshi is the creator of ShibanionTech.com and you can follow her on Twitter at @shibanijoshi.