Monday, April 29, 2013

Washington's Pot Consultant Cautions that Selling Marijuana may not be Highly Profitable

Washington's recently appointed pot consultant warns that recreational sales of marijuana may not be as profitable as many experts believe due to heavy taxes, regulations, and competition from untaxed collective gardens. In addition, it will most likely be a small number of heavy users that account for the majority of the sales of marijuana. Many of these users are already acquiring their marijuana from collective gardens that have already sprouted across the state.

“What if you gave pot legalization and nobody came? It is entirely possible that by the time we finish regulating and taxing this product, it’s going to be uncompetitive with what you can get at the collective gardens.
                             ---Mark Kleiman, Washington's Pot Consultant and UCLA Professor

These are the challenges that Washington legislators will be facing over the next 12 months. If they tax recreational marijuana too heavily, they risk increasing the black market supply and lose valuable profits. If Washington and Colorado want to make recreational marijuana profitable, they need to have people come to the legal market rather than alternative ones. This means keeping costs competitive and taxes down.

Unfortunately, keeping the recreational market competitive may mean changing the medical marijuana market in Washington, something that patients and medical marijuana growers fear. While Kleiman is not leaning in that direction for now, the future remains cloudy for Washington's medical marijuana industry.