Washington’s experiment with retail weed gets set for 1-year birthday

Jim Sulton is frank about his accomplishments during three years of running a state agency. He says he fell short of goals like making college-admission standards more fair to first-generation students and reducing the number of students who drop out of college.

“These were all things that I passionately still believe in, (but) reluctantly have to admit I wasn’t able to accomplish at the HECB,” said Sulton, the former executive director of what was then called the Higher Education Coordinating Board.

But now, operating out of a tiny house between a fruit stand and a 7-Eleven, the grandfather of four can say he’s part of a major social change.

“It’s turning around,” Sulton said. “It may be a little bit like a large ship at sea turning around, but the steering wheel is turning in the right direction, and that’s where it’s going.”

Then he gets out of his chair to welcome another customer to his marijuana shop.

Olympia’s A Bud and Leaf is one of more than 160 state-licensed stores that collectively are selling more than $1.5 million worth of marijuana daily as Washington’s experiment with legal weed sales turns a year old Wednesday.

Their sales include more than 150 pounds a day of smokable marijuana plus an assortment of products to be chewed, sipped and inhaled.

So far, the stores in Vancouver, just across the Columbia River from Portland, have been some of the top-selling stores in the state. The flow of customers across the river will likely reverse as Oregon’s medical marijuana stores are allowed to start selling for recreational use this fall, but aren’t expected to have much of an effect on the state’s overall market.

The state’s stores and their hundreds of suppliers have explored nearly unknown terrain as participants in the world’s second legal market for recreational marijuana, following close on the heels of Colorado stores opening the previous January.

Voters in both states legalized the drug in 2012. In Washington, Initiative 502 proclaimed it would take marijuana out of the hands of drug cartels or gangs — freeing up police to focus on other crimes — and put it into a regulated system whose profits would go to education, health care, research and drug abuse prevention.

One year in, it’s hard to measure just how well it’s working. Much of the data predates the start of sales.

The revenue part has come through. The state is due to collect more than $64 million in excise taxes from sales in the fiscal year that ended Tuesday, more than three times what state forecasters predicted less than a year ago. The latest projections, which some lawmakers think are now too rosy, call for a more than $1 billion haul over the next four years.

Lawmakers are counting on the money to help balance the two-year, $38.2 billion state budget. They also agreed last month to give a small cut to cities and counties that permit the industry.

“Just looking at the numbers, it obviously is working,” said Randy Simmons, deputy director of the agency tasked with regulating marijuana, which will be renamed the Liquor and Cannabis Board later this month. “Has it been without struggle? No. But it’s a new industry.”

As for the rest of the promises, police say marijuana was already a low priority and that without better data they don’t know how the black market has been affected.

Some inroads on street dealers

Legal stores have surely taken some business from street dealers, but how much?

Before handing out licenses, the board predicted with help from consultants that the shops would capture 13 percent to 25 percent of the marijuana market in their first year. That needs re-examination, Simmons said. But his best guess is that about 10 percent of marijuana consumed in Washington comes from licensed stores.

Sales are beating expectations — even though the shops didn’t all open right away, and many of the allotted 334 retail licenses didn’t materialize at all, mostly because of local bans. Meanwhile, officials believe total marijuana use is up.

“I think like with any other substance, you provide access points, you’re going to see an increase in consumption. I think we are consuming more than we were,” Simmons said.

That’s not necessarily cause for concern, he said, unless it’s the most frequent users who are using more.

Whatever the licensed stores’ share of the market, it’s likely to change. Hundreds of unlicensed shops that cite the state’s medical-marijuana law as legal justification won’t be able to do that any longer after a change the Legislature approved this year.

Some will close; others will get licenses and start paying high taxes and following strict regulations.

Already, licensed stores have moved closer to competing on price. High prices surprised some customers last summer when the first stores opened, but then autumn came and outdoor growers harvested their massive crop.

Prices fell by roughly half, stabilizing in recent months at an average of less than $12 a gram. That’s comparable to what many medical shops charge and within the range of street prices, according to some estimates.

Growers and retailers must live on low margins to keep prices so low, said Chad Champagne, owner of the store 420 Carpenter in Lacey. He predicts many growers, especially, will go out of business.

“Prices are coming down ... but it’s on the backs of the business owner,” he said.

Users see appealing aspects

Simmons said lower prices may be luring people away from dispensaries to licensed stores that don’t require a medical authorization, based on visits to stores where he sees younger faces among the clientele.

Some customers who used to make deals in a parking lot or on a street corner prefer going to a place that looks like a cross between a liquor store and a Best Buy, with staff to give advice, said Bryan Jastrzembski, acting executive director of Rainier on Pine in Tacoma.

“We have people who will tell us up front, ‘I don’t buy from my friend anymore because I like being able to see all this. I like having the test results,’” Jastrzembski said.

Pot shops with government blessing might reduce the stigma of marijuana.

That could make it more likely for kids to try it. A youth survey last year found rates of current marijuana use — 27 percent among high school seniors, for example — have stayed steady. But fewer high school students said marijuana is risky than had two years earlier.

While public health advocates say they wished the state had done more to stress the potential harms of pot to teens, the state required strict packaging and labeling requirements to keep children from getting into the weed. Products that appeal to kids also remain banned — no marijuana cotton candy or gummy bears.

The first compliance checks in May at 22 stores — which can sell to customers 21 and older — found four, or 18 percent, that sold to minors. Two Tacoma stores were among the ones that failed the checks. Regulators said they expect compliance to improve.

Declining stigma could also make the millions of U.S. adults who use the drug less concerned about having that known.

“I’m a stay-at-home mom, but I still feel like I have to hide in the shadows,” said Melissa Castellanos, 42, who said she has been smoking pot since age 11 and now uses it to manage pain. Talking about it might make people label her a bad mother, she said.

“People ought not have to duck and cover to enjoy recreational marijuana,” said Sulton, owner of the store where Castellanos was shopping. “People ought not have a scarlet letter on them to purchase it.”

Sulton and his wife, Anne, are African-American, and especially with her background as a lawyer, they are attuned to how black people are more likely to be arrested for marijuana and how such arrests cause lasting harm.

“We’re a little bit exhilarated about embarking on this mission,” Jim Sulton said, “because we know who has paid the price.”