Six years in, the song remains the same

As Marijuana Venture celebrates an anniversary, we look back at the trends of legalization

This issue marks the six-year anniversary of Marijuana Venture.

We started working on the magazine about a month after the first recreational sales in Colorado and ultimately published the first issue — an eight-page black-and-white newsletter — a couple days after the first cultivation licenses were issued in Washington state. In that time, in addition to publishing 73 issues of Marijuana Venture, we also published a dozen issues of SunGrower & Greenhouse, a quarterly spinoff we discontinued in 2019, hosted three national trade shows (the Retail and Dispensary Expo) and produced eight local buying-and-selling events in Washington (Interchange).

We’re now in the process of expanding Interchange into multiple states across the country and planning our fourth RAD Expo, so we’ve watched intently as each recreational market and many of the medical markets have come to life in North America.

From a regulatory perspective, every legal state in the U.S. and every province in Canada has a vastly different set of rules. You would think these rules would start to mirror each other and eventually meld into a fairly uniform set of laws across North America. Instead, it’s almost like each state has worked together specifically to ensure the quirks in their laws are entirely separate and unique from the rest of the nation.

Yet, while each market has its own nuances, there are similarities that have played out like clockwork with every new state. At this point, it’s pretty easy to predict how things in a new state like Illinois will play out. When stores open, there will be a flood of customers willing to pay the exorbitant prices for the novelty of legal weed, leading to long lines and an inevitable shortage of cannabis. But after a few months (or maybe weeks, considering how high the prices are in Illinois), most consumers will return to buying from the illicit market (Cue the headline: “Despite legalization, black market thrives in Chicago”). But eventually, as licensees come online and producers ramp up and refine their techniques, the pendulum will shift toward oversupply, driving prices down, and consumers will (slowly) migrate toward the legal retailers — because, frankly, they’re more convenient, provide better experiences, have wider selection and offer the assurance of safety and at least the perception of a product that is free from molds, pesticides and harmful chemicals.

And somewhere in the first year, maybe two, new markets will experience any number of predictable hiccups: Pesticide-tainted pot prompts state recall! Traceability compliance a complete nightmare! Not enough labs to handle testing! Industry leaders say tax rates are too high! Medical patients ignored by adult-use industry! Federal tax laws hamper profitability! Lack of banking options create security concerns! Cities and counties enact bans across the state! Reefer Madness lives on!

Variations of these headlines will hit every new market, and though I hate to say it, many of these exact same issues will linger long after legalization. Even in the most mature markets in the country, businesses and regulators are still navigating these very subjects.

Traceability is basically a nightmare in every state. In Washington, one of the oldest adult-use markets in the country, the traceability system remains a major question mark. Over the past two months in Oregon, 15 of the 21 settlement agreements for violations have been related to the cannabis tracking system. Regulators seem oblivious to the challenges of traceability — as well as the impracticality of tracking every gram of plant material from seed to sale.

Pesticide use should be a much bigger concern, particularly when cannabis is regulated and marketed as a “medical” product. Six years after the launch of its recreational program, Washington state still hasn’t sufficiently addressed the subject of pesticide testing. Oregon, Colorado and Michigan have all had recent recalls related to pesticides. When profits are on the line, there’s always going to be somebody willing to cut corners.

Although high taxes have severely cramped the Washington and California markets, states continue to look at cannabis as the cure to all their budget woes. Whether the goal is to reduce the size of the illicit market or to prop up the state coffers, lawmakers and regulators need to get past the notion that taxing cannabis consumers is the easiest way to do so. Consumers will buy their cannabis elsewhere if the price is not right. That’s the absolute bottom line. The marketing pitch of lab-tested products, convenience and great customer service only goes so far if the price can’t compete with the illicit market.

And yes, Reefer Madness is alive and well. Most California counties and municipalities still ban cannabis operations — which also fuels the booming black market. The same can be said of Michigan and Massachusetts. Meanwhile, state lawmakers in Washington are considering a bill that would put a 10% THC cap on concentrates, a move that would surely reinvigorate the state’s dwindling black market.

As fast as the industry moves and evolves, these cycles and storylines have been constants since Day 1 of the legal, recreational industry.

For everything we’ve learned about cannabis and the legal industry in the last six years, it’s almost as if some people refuse to listen. In a way, I feel like I’ve written this same column half a dozen times — and I’m sure the next wave of legalization will be no different. It makes me wonder when states will stop trying to reinvent the wheel and come up with a solution that builds on the progress we’ve already made.

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