Earlier this week, one of the local drug interdiction task forces infesting the state announced the bust of 32,449 plants (and some cash and gold and a few houses and people) estimated to be worth $80,000,000.
In using a $2,465 per plant valuation, these asset-forfeiture specialists are, apparently, assuming this to be the level of pricing that WA-produced product is expected to command on the streets of non-legal states craving product of the quality produced in the Pacific Northwest.
I am glad that these heavily armed and armored folk have shared a current Black-market pricing estimate with us. It may prove informative to Washington’s Legislators as they wrestle with the true fiscal risk of the WSLCB’s gross mismanagement of our state’s regulated Cannabis marketplace.
I recently posted that approximately 1.2 million regulated plants were initiated in Washington between May and July of this year. Those plants have now, for the most part, been harvested during a period where the WSLCB has no real-time access to an integrated source of the traceability data that comprise their seed-to-sale tracking capability. 1.2 million plants are coming to market, just as the LCB is “Cole-memo-blind”.
So, Legislators …. The WSLCB currently can’t really track 1.2 million plants, whose worth on the Black market, according to the boys with the armored personnel carriers, falls just shy of THREE BILLION DOLLARS. That is 3 Billion dollars of potentially taxable product. Product that can now be diverted out of state with relative ease. Product being harvested and cured and processed and packaged and sold by hundreds of businesses that your laws and the LCB’s incompetent over-regulation are squeezing to the edge of fiscal oblivion.
If only 25% of those plants were diverted to the out-of-state Black market, they would have the potential to bring $750,000,000 of untaxed (free) revenue to the farmers and processors (and retailers?) of the state. That would pay quite a few mortgages and grocery bills and health insurance premiums.
However, since the LCB can’t track it (diversion) or measure it (diversion), one can reasonably guess that it (diversion) is not happening. Never mind … go back to planning for your short legislative session and upcoming efforts to be re-elected. Read the LCB’s recent bullshit so-called “study” relating to regulatory options for the Homegrow of Cannabis. Then go to sleep comforted that all is good and that those regulators down on Pacific Avenue have things as well in hand as they would have you believe.
In the meanwhile, what is actually happening right now is that a surge of more than 350 tons of fall-harvest WA-produced Cannabis is in the process of making it’s way to market (which market is debatable) This pulse of product is expected to put further downward pressure on prices that can be expected by wholesalers choosing to sell within the regulated market.
As Legislators interested in tax revenue, you should not, for example, be surprised to see the price of the average gram of finished flower being sold at wholesale falling to as little as $2.50 per gram within the next month or two.
That decline will, in turn, likely cause downward pressure on retail pricing and a resultant reduction in collected taxes. As prices plunge downward, the relative benefits increase of selling elsewhere with better prices.
Sleep well, Legislators.
From the farmer’s perspective, this is not all doom and gloom. There will definitely be increased downward pressure on prices being paid to farms and processors over the next few months. At the same time, it is clear that there are products (and farms) out there that are commanding decent prices in this difficult market.
Here is a distribution of the wholesale prices paid by retailers for flower in the 3rd quarter of 2017. This chart shows the count of distinct manifest transfers into retail for flower that occurred during the 3 months ending September. To clarify, in the following chart, if a given manifest included 3 different strains of joints each priced at $2.00 per gram, that would represent three of the 22,000 “transfers” that are counted in the “$2.00 per gram” price bin.
The line superimposed over the frequency distribution gives the cumulative density of the chart (e.g., 60% of the flower transfers into retail during 3Q’17 were sold at or below the price of $3.25 per gram).
Two things worth note on this chart are the very human propensity to price things at whole number levels ($1, $2, $3, or $4 per gram, for example) and the fact that there is, indeed, some flower out there that is able to command almost Black-market-like prices when sold into retail.
Presumably this $4+ per gram flower represents good stuff. In fact, I’d argue that the wholesale price commanded by flower is one of the best indicators available of the “quality” of the product being sold (and bought) within the regulated system.
With that in mind, I leave you with the following list of stores apparently stocking the best Legal Cannabis in the State (without sharing much of my methodology … as this stuff is kinda proprietary).
After categorizing each wholesaler into a number of distinct categories (Ranging from “Value” to “Premium”) based on the distribution of prices their flower commanded in 3Q, I derived a number of distinct groupings of Retail Access Points based on the proportion of their 3Q flower purchases that came from farms (and processors) in each pricing category.
The list above is the segment that corresponds to stores that appear to be spending not only time and effort, but MONEY to ensure that the flower they are offering their customers is of the best quality. I manually over-rode the segmentation and removed 3 stores from the list (for different, but relevant, reasons that I will not bore you with).
In 3Q, there were less than 500 pounds of flower sold into retail by wholesalers considered to be “Premium” in my model. The listed stores stocked a disproportionate share of their shelves with product from “Premium” and/or “High-Priced” suppliers.
It is interesting that none of these “best flower stores” are East-side stores.
I feel fortunate that I live in the greater Seattle area (as nice as I’ve found Spokane and most folks that I’ve met from the area to be).
It is also interesting that some of the good, solid players that made it over from the old “Green Cross” days are represented on this list. Dockside and Have-a-Heart (for example) are stores that, today, can reliably produce the Certificate of Assessment (testing result sheet) for product upon customer request. They were always among the best for Patients. Now they are among the best for folks wanting the best.
Given their presence on this list, they can point you to quite a few of the BEST examples of flower that are available in the regulated marketplace today. I would imagine the same can be said of the other products they stock, but that is just a guess at this point.
If you want to purchase the best flower in the state that you can get legally (specifically, that for which the farmers are paid the most) you will not go wrong shopping at these stores.
Please remember, however, that Cannabis is a Schedule-1 restricted drug that the Federal Government considers illegal and that the elf running the DOJ seems to think is bad for you and for us all. Please do not view this post as an encouragement to shop for Cannabis, let alone to shop for it in a regulated retail access point. Take it for what it is, a listing of the stores that seem to be curating their flower offerings — and investing in the offerings of the best of the suppliers out there — to a much greater degree than their peers.
If I were the type of person to shop in a State-Legal Retail Cannabis Access Point, I would not hesitate to shop in these stores. Note that none of these stores either paid me for being on this list or, for that matter, even know they are on it (yet). Let them know …. They should be proud of how they are sourcing their product. They are, by this simple metric, the best stores in the state (from the perspective of any consumer in search of the best flower being produced in the state).
Let them know you appreciate what they are bringing to you. They are NOT like the other 390-odd stores currently operating out there. They are, IMHO, “better” on this basic dimension. There are other “good” stores out there … but these are the best (on this simple measure).
If more stores were willing to pay a decent price to the farms of this state, less of the $3 Billion dollar Black-market potential of the current harvest would be at risk of going “Cole-rogue” and of putting everything that the LCB would like to have us think they have been working toward at increased risk (much as their lack of seed-to-sale tracking capabilities currently does).
Thank God for Pie-Hoe!
Note to Retailers – The work I’ve done that underlies the list of the “best stores” at the end of this post would likely be of substantial utility to those of you that wish to up your purchasing game. Let me know if you are interested. It’ll cost you.