Note Jerry Whiting just posted the audio of a 15-minute chat he and I had the other day on this topic up on “LeBlanc CNE on Soundcloud” at the following link: https://soundcloud.com/leblanccne/jim-macrae-traceability-harvest
Last year’s fall harvest was large enough, relative to the small number of retail access points licensed and open for business, to cause a multi-month “glut” of available product in wholesalers’ inventory. This increased the difficulty for farms to sell their product at anticipated price levels and resulted, in many cases, in product remaining either unsold or unsold for longer than expected.
In that context, I was curious about how big the fall harvest that is now beginning to appear at retail will be and whether it can reasonably be expected to change the dynamics of Washington’s State-legal Cannabis market over the next few months.
The following chart shows the number of plants that were initiated during each month since the beginning of the market in early 2014.
Overall, the number of plants started each month is growing. The number of farms planting plants is growing, so this is of no surprise. Existing farms are also likely beginning to use their allowed canopy more efficiently.
Notice the pulses in plantings that occur around June of each year. These correspond to the seasonal plantings that correspond to the fall harvest of sun-grown plants.
The pulse in 2016 (counting plants initiated between May and July) represented a total of 735,000 plant starts. This was an increase of 90% over the number of plants started during the same period the year before.
The pulse this year represents a total of 1,200,000 plant starts. That is 63% more than the number of plants contributing to the fall harvest last year. It also happens to represent about 1 plant for every man, woman, other, or child that I estimate to be currently sourcing at least some of their product from regulated retail access points in this state.
Based on this, it would be reasonable to expect that the fall harvest of 2017 will be at least 1.6 times the size of last year’s. That is lots of lots of green (and brown and purple and orange).
Recent retail sales levels (for Sept and Oct) are only 14% higher (in dollars) than they were during the same period last year. Even taking price declines into account, retail volumes are up less than 20% from where they were at this time last year.
Retail volumes are up 20% and harvest volumes are up 60%. What could go wrong with that?
One problem, of course, is that not all of that product will sell. That which does sell will do so in a market seeing a glut of available product much larger than any glut seen before. Average prices to wholesalers (per gram) are likely to drop noticeably. Quite a bit of product will not be purchased by ANY licensed retail access points.
That product will either sit and age while it awaits a possible future sale, or it will not. Certainly, farmers will wish to see that product generate revenue. All the while the baseline plantings driven by those growing under lights will continue to produce new fresh product.
This increased motivation to sell comes just as the WSLCB’s meltdown in seed-to-sale tracking has been foisted upon the market. From the user’s perspective, LEAF’s failure to deliver a functioning seed-to-sale system has not, actually, hit the market all that hard (with thanks primarily to WeedTraQR & BiotrackTHC and unfortunately NOT to the WSLCB). From the user’s point of view (assuming they are using one of the paid traceability options), little has changed.
What has melted down is the ability of the LCB to examine traceability data with anything approaching the ease, efficiency, or extent that was available to them for the first 44 months of the market. LCB examiners and investigators and enforcers and generally-interested-staff no longer have a unified central database that is being updated by licensees in near real-time. What they now have are thousands of apparently disconnected spreadsheets sitting on a cloud server (or thumb drive) somewhere. That is a problem and it represents a huge gap in traceability.
The glut of product that the market is about to experience creates increased MOTIVATION for wholesalers to sell.
The LCB’s virtual inability to use the data to oversee product flow through the system creates the OPPORTUNITY to divert product from the regulated system for potential sale (or other beneficial use) elsewhere.
We should all, therefore, be thankful for the cameras and security plans and 8-foot sight-obstructing fences and locks and entry warning signs and visitor logs and sign-in sheets and lengthy quarantine periods. We should be thankful for 16-digit and 12-digit and even random-digit barcodes attached, by label, to all plants and processed goods. We should be very thankful that children (even farmer’s kids) are not allowed behind those locked doors and gates. We should be thankful that waste must be duly logged and destroyed or composted in acceptable ways. We should be thankful that the LCB did not award licenses to criminals, non-Washingtonians, or the types of people that would declare their intent to act as a medical access point and then fail to do so.
In sum, we should be thankful, because the regulatory oversight by the LCB and their extraordinarily comprehensive and perceptive mastery of the market they regulate, coupled with all of the compliance tools mentioned above, have almost completely absolutely eliminated the MEANS for diversion to occur.
Thank goodness that the system, as designed, is rock-solid secure and almost impossible to divert from. Heck, without a traceability system, it’s not like anyone would even know if some of those 1.2 million plants went missing (hint … on average, 26% of plants initiated do not make it to final commercial harvest during normal times).
Thank-goodness for the regulatory system. That masterful machine ensures that the unholy triad of MOTIVE, OPPORTUNITY, and MEANS is not present in the Washington’s State-legal Cannabis market.
Just keep on walking by … there is nothing to see here.
As some wise scientific people used to drill into my head: If you can’t measure it, it is not real.
If you can’t measure it, it does not exist. Perhaps it never did. Cameras can lie (as can non-certified scales). Fines can be large, but they are limited in size.
Hence, diversion cannot be real in Washington for the next few months. It will not be occurring. All is good. Washington’s (and America’s) children are safe.
Thank goodness, as the traceability meltdown is coming to a head just as Washington faces the largest harvest in the history of the market …. and quite a few hungry farmers.
Give thanks to the LCB for the OPPORTUNITY they have provided and, finally, give thanks for the law-abiding nature of Washington’s State-legal Cannabis farmers and processors and retailers and labs and transport drivers.
They wouldn’t divert. Never. Not in 420 years.
Happy Thanksgiving! Happy Festival of the Harvest!