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The State of Cannabis & Hemp Mfg.: Washington

By Eric Peterson / CompanyWeek February 24, 2020, 05:16 pm MST

Washington state has been on the front end of cannabis reform for decades and has emerged as a significant market in the era of legalization.

With a higher-than-average population and apt climate for both cannabis and hemp, the state has seen recreational cannabis sales double in four years, with a nascent hemp industry that could take a similar track.

Cannabis

Washington state voters legalized medical cannabis with Initiative 692 in 1998, followed by recreational cannabis with I-502 in 2012.

As of late 2019, 1,368 licensed cannabis producers and processors and 491 retailers were operating in Washington, according to a report from the Washington State Liquor and Cannabis Board.

The same report identified 13 cannabis testing labs in the state. It identified only one -- Medicine Creek Analytics -- as capable of testing four heavy metals at the time.

While the state stopped reporting monthly cannabis production data by weight in 2017, tracked volume peaked at 22,000 pounds in March 2017.

Taxable cannabis sales in Washington more than doubled from $501.9 million in 2016 to $1.056 billion in 2019. Tax revenue rose from $185.7 million to $394.1 million in the same period. In comparison, Washington took in $491.1 million in tax revenue from spirits in 2019.

The retail price for a gram of cannabis in Washington dropped from $8.87 in 2016 to $5.89 in 2019.

The most recent sales breakdown: 60 percent flower, 26 percent extracts, 9 percent edibles and drinkables, and 5 percent other.

Marijuana retailers had a 96 percent compliance rate of refusing sales to minors in 2019, which compares favorably to the 84 percent compliance rate in the alcohol industry.

State legislators have proposed a 10 percent THC limit for edibles and extracts.

According to a report conducted by the Washington State Liquor and Cannabis Board, the state's recreational cannabis cultivators were using just 38 percent of their licensed canopy in April 2019. Low wholesale prices and a lack of investment dollars were identified as primary causes.

Hemp

The U.S. Department of Agriculture approved Washington state's hemp program on February 20, 2020, making for a total of eight approved programs in the nation.

Farmers had 5,000 to 6,000 acres of hemp under cultivation in Washington in 2019, according to the Washington State Department of Agriculture. 

There are currently 24 licensed hemp producers in Washington state, with others under review. 

The preceding pilot program had licensed more than 200 growers, processors, and marketers through the end of 2019, but processors and marketers are no longer regulated by the state unless they are making food.

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