If you're trying to sell recreational marijuana in the state of Washington, there's good news and bad news.
The good news is that, like medical marijuana, recreational marijuana is now legal in the state.
The bad news is that you may not make a go of it right away. Recreational marijuana is strictly regulated, causing not just legal headaches and supply-chain hiccups but prices that can be much higher than that of medical pot.
It takes a straight head, so to speak, to sort through the thicket. First, keep in mind that marijuana is still illegal at the federal level. Nevertheless, a medical marijuana initiative was approved by Washington voters in 1998. (Twenty-three states and the District of Columbia now okay medical marijuana; weed has been sold legally in Colorado since last January, and Oregon, Alaska, and D.C. just voted to fully legalize it.) Washington state's medical market operates under limited regulations.
Then in 2012, Washington citizens voted to pass Initiative 502, a law allowing for recreational marijuana use. After voters gave the nod to recreational marijuana, things got really gnarly.
Banking is another problem. Because marijuana is federally prohibited, most banks don't want to offer bank accounts to businesses selling it. That means some business owners find themselves carrying tens of thousands of dollars in cash in order to meet payroll.
And that's before they even begin to think about the taxes levied on recreational marijuana, or the legal issues like establishing a trademark that might hold up in court. Talk about a buzzkill.
Back to the good news: Hilary Bricken is on the job to help pot pioneers figure it all out. The 30-year-old Florida native has made a name for herself navigating the bewildering marijuana laws of Washington. Bricken, to say the least, has had her hands full.
"It's been a bumpy road," she says, "and it continues to be bumpy." Seattle, which has been "way more saturated" than other cities in the state with medical marijuana dispensaries, has felt the brunt of the problem.
Some news accounts have estimated there are more than 200 dispensaries of medical marijuana in Seattle alone. In contrast, Seattle has only two storefronts selling recreational marijuana. There's a movement afoot to roll the medical marijuana market into the recreational one, to make it uniform.
The messy landscape looked like an opportunity to Dan Harris, a principal at the Seattle law firm Harris Moure. "I [was] at the health club on the stair-climber and reading about the changes in the cannabis laws in Washington," he recalls. "And I thought, 'Man, this is becoming a real business. Who is representing these people?'"
A new practice area like this is an "opportunity for young lawyers," Harris says. For someone who's already been practicing for 15 years, "it's difficult to become THE cannabis lawyer."
Enter Hilary Bricken. "She deserves immense credit," says Harris. "She hustled like nobody's business. She got to know everybody in the industry." Today she's one of the top marijuana business lawyers in the state. Canna Law Group, a practice group within Harris Moure, has about 200 active marijuana clients in Washington and other states. Bricken says their number-one challenge is capitalization: "Running a compliant marijuana business is not cheap."
One of her clients is a group made up of a couple of former Microsoft engineers who decided to move into something a little different. Oscar Velasco-Schmitz had opened, with some partners, a medical marijuana cooperative in 2011, called Dockside Cooperative. When recreational marijuana became legal, he and some partners opened Dockside Cannabis. Bricken says she's advised Dockside on forming a corporation, contracts, vendors, landlords, trademark registration, and entering into potential business deals.
While Dockside Cannabis offers a full menu including pre-rolled joints, tea, lemonade, and even vegan and gluten-free bars, it's facing an uphill battle. At the beginning, says Velasco-Schmitz, there was a good demand for recreational pot in Seattle. Then things changed.
"As producers have come online, we've seen that go the other way around. Now there's a huge amount of product" and not enough demand. Some 10,000 pounds of cannabis were produced in Washington at the end of the year, and only about 1,000 were consumed.
His business is going to take a few years to land in the black, Velasco-Schmitz says. "But we think in the end it will be worth it. We're starting on the ground floor of a nascent industry."
Roger Roffman, a professor emeritus at the University of Washington, co-sponsor of the state's medical marijuana initiative, and the author of the book Marijuana Nation, says that the rollout of recreational marijuana in Washington has been slow. "There continues to be a thriving black market, and there continues to be a thriving medical marijuana market with unlicensed entrepreneurs," he says. "It's going to be a while before the system is structured the way it ultimately will be."
Bricken sees some form of national legalization developing, whether it's states opting out of prohibition one by one or the result of federal action. That would stimulate investment in marijuana—making her services, no doubt, even more in demand.