Currently Reading: Destination 2016

As the State of Washington begins something never attempted in the history of Planet Earth, it will likely be years before we know if legalized recreational marijuana is a good business. But in the meantime we give a vote of confidence to the lawmakers putting in the hours to make access for those who need it most even easier. Other states are watching. By the 2016 elections the results of this State’s grand experiment will be clear. Here’s how we think it will play out…

Alaska will be next. Soon it will be 2014, then 2016. Ballot initiatives similar to ours will gain popular support in other states and will likely pass in as many as seven states by the time the Obamas are packing the moving trucks. There is safety in numbers, no doubt, but until this bandwagon has a few more passengers we will be on our own little island, with plenty of greenery, and no shelter from the storm.

It is a truly patriotic exercise for elected officials to create a manufacturing and retail industry from scratch, knowing that every product sold will be illegal in the eyes of the Federal Government. It can only summon memories of the birth of this nation, when a handful of colonies committed high treason and were branded terrorists by the English Empire. They created state constitutions, formed international alliances, raised an army to assist the militias and declared independence while also creating a system of inter-dependance.

There are times when breaking the law is the best way to serve it. Cannabis is no different from the East India Company’s Tea that sunk to the bottom of the Boston Harbor in 1773. Tea was restricted and heavily taxed, but the product was in high demand. Cannabis has been restricted and leveraged to incarcerate enough Americans to show the drug war worked. Its demand is undebatable. Washington was the 42nd state ratified way back in 1889. We missed the calling of the Sons of Liberty and had no hand in the revolution. So this is our civil disobedience. This is our chapter written on the parchment of history.

And this industry can germinate without the awful stain of slave labor generating inflated profits like every other American industry did up until to the Internet boom.

So we have set ourselves to task on a new economy. One that does not exist anywhere on the globe. Repealing prohibition of alcohol worked out pretty well, thats a $400 billion dollar a year business in the US now. There is no greater opportunity for America to change course and move past the mistakes of previous presidencies than legalizing cannabis for adults. The profit margins, the alternative fuel possibilities, the environmental impact, the farming and manufacturing industries, the eradication of unemployment… not since the industrial revolution has a single industry had more potential to create jobs for unskilled laborers. Putting those people to work reduces crime, strengthens families and neighborhoods; it builds a better society that might actually be able to sustain a future.   


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Critics say we move too fast. They’re not comfortable.

“We’re on this hundred-mile-an-hour freight train to legalizing a third addictive substance,” Kevin Sabet, a former drug policy adviser to Obama told the Associated Press.

But we at 4E believe that the progressive, and supremely reasonable State of Washington, is the perfect conductor to be driving this locomotive. At the time this magazine went to print the Liquor Control Board (LCB) was still conducting public hearings. It seems someone has been taking good notes. In the previous issue of PDA Magazine we called attention to the complaints about the carbon footprint of indoor cannabis production and how insane it was to then ban sun-grown outdoor cannabis which will be the most eco-friendly option not to mention a huge boost to the lovely people on the east side of this state. The LCB realized this was a flawed parameter, turned on a dime, and altered policy.

That is what’s refreshing about this process – it is unusually free of entrenched doctrines about what works and what doesn’t. But don’t expect Kumbayah karaoke and drum circles all the way to the finish line. Things will be radically different from county to county. Look for a second at what happened in Los Angeles County as an example. There were close to 1,000 collectives serving medical patients at one point, citizens voted to cap that number at 135. By comparison there are 112 Starbucks in LA County. Local factions will decide how much or how little presence they want when cannabis goes pop. These zoning and capacity questions are being kicked around for the rest of the year.   

It may be well in to 2014 before the ink is dry. The sheer magnitude of the task is mind-boggling. The tiniest considerations like if magazines such as PDA should have to kept behind the counters the way pornography is (which a federal judge in Colorado already shot down for a legal precedent) to macro-fiscal matters like how to get loans, proper banking and tax write offs for our businesses without jeopardizing the financial companies that cross state lines.

The answers are not multiple choice. They’re not fill in the blank. The politicos are earning their money this year.

“The evidence is pretty clear that in 1970 the decision to make the drug illegal, or put it on Schedule I, was a political decision,” says J. Michael Bostwick, a psychiatrist at the Mayo Clinic. “And it seems pretty obvious in 2013 that states, making their decisions the way they are, are making political decisions. Science is not present in either situation to the degree that it needs to be.”

And this where we believe Washington will make its first mark. We have leading bio-tech and research think tanks in this region and before anything else is championed we must first embrace our role as the knowledge bank. Cannabis has not been studied in legitimate academic laboratories nearly enough because its federally forbidden. Our fine institutions need to be writing grants now, securing endowments, getting ready to dispel the myths and arrive at hard data.

The American Medical Association opposes the legalization of cannabis. We must change their minds.

How far can this plant take us? How many applications based on biomechanics have we neglected to think of yet? Can cannabis save the world, or at least the declining super power that is America?


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THINK AGAIN


Legislators are scared of potency. According to the National Institute on Drug Abuse “concentrations of THC in cannabis averaged close to 10 percent in 2009, compared with about 4 percent in the 1980s.” And if the plant matter is this psychoactive imagine how they feel about extraction and concentration processes. For awhile it looked like these products, which have had tremendous success in treating patient’s symptoms, would be outlawed altogether.

But in another twist of fact, the LCB considered the opposition’s arguments regarding unintended consequences of this decision. They were persuaded that banning concentrates would hand the black market a lucrative product that is extremely risky to make and consume. Concentrates were not included in the sellable marijuana regulations originally, and it could take all of 2014 before this omission is rectified. The baseline understanding appears to be in place however, no more home production in rice cookers and jerry-rigged appliances under the cloak of secrecy.

In the interim considerations are being made for using a small amount of olive oil, glycerin, ethanol, propylene glycol or some other inert ingredient that might allow for classification as an infused product. But what are the ratios? Somewhere between liquid and solid lies these dabs of gold, and starting our new economy with loopholes is hardly our idea of creating a structure that is sustainable for generations of Washingtonians to come.

“If you don’t allow them, then people are going to use butane cans at home and blow up their house,” Genifer Murray, CEO of CannLabs, told the Seattle Times.

Carbon-dioxide extraction is considered the cleanest, safest way to produce medical grade quality in significant quantities. However, the production equipment is expensive falling somewhere in the range of $60,000 to $100,000 for a single machine. The law is set to allow adults to buy one pound of pot-infused edibles and 72 ounces of liquid at a time. Hash oil sells for cocaine prices, as much as $50 a gram and can be as high as 80% THC.

Does that mean a customer could walk out of a store with a six-pack of hash oil?

That could be worth $100,000 on the black market.

As you can see, writing laws that don’t leave loopholes for scoundrels with good attorneys to take advantage of, is remarkably difficult.    

We are particularly pleased with the good judgement being shown by the LCB, and we would be the first to acknowledge having reservations about this board after some of the ways nightlife issues were handled in Seattle in recent years. They ditched the cornball mandatory logo for WA State products, placed strict guidelines on the use of pesticides, nutrients and fertilizers in production while also strengthening consumer protections. The stroke of genius was in how production violations will be treated. Repeat offenders will have 25% (2nd offense) and 50% (3rd offense) of their crop destroyed. This sliding scale is established to affect these businesses equally regardless of their size and wealth.

We were a bit confused by the 16-hour day retail hard-cap, only allowing operations from 8 a.m. to Midnight seems kind of arbitrary. What is the reasoning behind this? It seems even the LCB is still working on this answer.

“Is the sale of marijuana at 1 a.m. as much of a public safety threat as the sale of alcohol at 1 a.m.?” asked Chris Marr, one of the three members of the Liquor Control Board.

The rules do not specify the number of stores that will be allowed, nor do they cap the number of stores any one entity can own. Get your ping-pong balls ready because a lottery could be the only solution if the inevitable happens and more people apply for licenses than are made available. If the NBA is any indication watch out for the Cleveland Cavaliers in that case. All kidding aside, the logical protocol that we believe will rule the day is an uncapped system of issuing retail, processing and producing licenses to the owners that meet requirements. Because of the strict operating guidelines for a business such as this, enforcement will weed out the jokers in the first 12 months and the industry will settle in to an equilibrium.

To do otherwise limits the revenue potential of this new marketplace, and one thing 4E strongly believes is that everyone wants to see the actual revenues exceed projections.

Applications are welcomed beginning September 16, 2013.


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QUOTES


“I’m constantly reminding my allies that marijuana is not going to legalize itself.”

     – Ethan Nadelmann, executive director of the Drug Policy Alliance


“At some point, it becomes so prevalent and so many citizens will be engaged in it that it’s hard to recriminalize something that’s become commonplace.”

     – University of Denver law professor Sam Kamin


“We could propose some brilliant system that falls apart with a letter from the US attorney.”

     – Dr. Mark Kleiman, a public-policy analyst at UCLA and primary advisor to LCB


“I honestly do not believe that legalizing drugs is the answer. But I do believe that a comprehensive approach – not just law enforcement, but prevention and education and treatment – that’s what we have to do.”

     – POTUS


“Cannabinoids are just amazing compounds, and understanding how to use them properly could be actually very beneficial therapeutically.”

     – Director National Institute on Drug Abuse , Dr. Nora Volkow


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ZONE DEFENSE


There is nothing more political than a map. Remember the first time you realized maps of the world make the United States look bigger than it is, while making Africa and South America look smaller? Perception is paramount, and maps suggest the accuracy of technical diagrams so when they are misleading people get pissed. In Seattle we have been wondering aloud, with the strict regulations of permissible locations for medical collectives and the adoption of those same requirements for legalized retail, where in the hell can I buy some weed in the 206?

One thing we know for sure is SODO and Georgetown will be pot promenades. Storefronts are hard to come by though, and parking gets weird unless it’s off-street. But even more importantly… with the brew-ha-ha between Port of Seattle/Local 19 and Sports Arena moguls over increased automotive and pedestrian traffic in a commercial zone, do we really want to make this area the highway to heaven? Public transportation won’t be a problem certainly. Just exercise caution when it comes to these lines on a map, they can change as quickly as a child coloring with a crayon.

23rd and Union could be the central Seattle solution, adding to the eclectic history of this intersection memorialized in Rafael Flores’ 2011 documentary. The concern we have is every other business screams the key to success is “location, location, location.” Yet with such tight restrictions to avoid drawing federal scrutiny we tie one arm of legalization behind its back. This has never been tried anywhere in the world. Not Amsterdam. Not Hamsterdam in Baltimore, MD. Everyone is hoping for the best but the primary concern is gathering good data, analytics and reports so if our system implodes… other states can learn from our mistakes. If it goes sideways, the objective is to make sure oversight is sufficient to identify where we went wrong.


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FINAL TOKE


4E’s view is that legalization will improve access to cannabis for those who need it most. While the medical cannabis movement was painted with the broad brush of profit mongering above all else, we have found many local collectives and clinics are willing to adapt for a better tomorrow, rather than being bitter about dwindling cash. We feel the direction this is heading will be good for medical patients. Home grows of up to 45 plants will continue to harvest. Colorado doesn’t charge sales tax for patients, and special exemptions could come online in the next few years that lessen the burden in the same way health insurance and medicaid do for prescription drugs.

Statistics for green DUIs don’t show a significant increase since the new laws came into effect at the beginning of this year. The police need to be commended for not aggressively pursuing the letter of the law while trampling the spirit of it. The banking and book-keeping procedures have a long way to go. So while local collective operators have gotten used to cash only business, real retail won’t be relying on that archaic method. As long as Square Inc. doesn’t care if it’s swiping a cannabis transaction the creative proprietors that endured much worse in the past will make do.

The customers will too. Questioning authority will be a hallmark of this process. People will take time out of their busy schedules to participate in public hearings when they see recommendations from the general public being incorporated into policy. Question remain of course, like will WA State establish a seed bank? If we are responsible for seed-to-sale who provides the DNA?

Those left unanswered are not a cause for panic in our estimation. The process is working and that in it of itself is a patriotic revolution. At 4E we always come back to the idea that Washington will now have a contribution to American history befitting the name of America’s first president, given to us worth rhyme or reason. We hope this new economy is a model for how all industries can thrive in the 21st Century. Consider Eastern Washington contributing sun-grown cannabis with less carbon footprint in the production model, and benefitting from their isolated geographic location. Geography can dictate the role businesses play, and capitalism can work it’s magic the way it always does when protectionist measures don’t disrupt the balance. This should be a chance for rural areas to bounce back. It should be a system of regional specialization. If the soil in Yakima Valley wine country makes grapes taste so exquisite, can’t the same soil produce uniquely original cannabis?   

Legalization is essentially a reset button. All the collectives that have seen thousands of patients over the last few years will have a head start in the market, but new customer acquisition will be like Christmas Day when legalization takes root. No wonder they picked December as the jumping off point.


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