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Is the Business of Marijuana in the United States Fading Already? Seattle Medical Marijuana Shops Shutting Down

Marijuana Industry Worth Billions:

Even though less than half of the states in the U.S. have already passed some form of medical or recreational marijuana reform measure, the legal marijuana industry has already made billions over the last five years.  The marijuana industry appears to be the fastest growing industry in the U.S. right now according to a recent report by the Huffington Post.  According to the research findings from The Arc Group, the U.S. market for legal cannabis was worth approximately $2.7 billion in 2014, which was up from the $1.5 billion in 2013.  The industry is expected to grow larger this year as well.  Despite the industries worth and the momentum gained with marijuana reform across the U.S., some areas that have legalized marijuana are still working on the finer details to keep the industry moving forward.  In Seattle for example where medical marijuana is legal, over 50 medical marijuana dispensaries have closed over the last several months.  Is this because the industry’s momentum is fading?

Is the Business of Marijuana Fading Already:

It appears that the slowdown in opened medical marijuana dispensaries in Seattle is not necessarily due to a slow down at all, it is more likely the result of a crack down.  Enforcement from the city’s Finance and Administrative Services (FAS) department has forced the shut down of the shops and dispensaries.  The department’s Director of Enforcement, William Edwards, reports that his leadership and actions have been attempts to prompt dispensary compliance.  Edwards reports that if shops can’t get into compliance, they need to be shut down.  According to city documentation, the maximum penalty for a criminal conviction is 364 days in jail and a $5000 fine.  It should be noted that some of these shops that are not in compliance, also avoid paying state tax on the medical marijuana sales.


Compliance in Seattle:

New issues of compliance have surfaced since the passage of Senate Bill 5052.  Basically, the only legal way to initiate a business associated with the sale of medical marijuana in Seattle is to have a state issued license.  Many dispensaries try circumventing this requirement and are thus breaking the law.  Those that continue to operate without a license will not only be forced to shut down, but they face product seizure, fines, and potential jail time.  Many of the places that were dispensing without a state issued license were able to sell the product cheaper without tax.  Recreational stores charge a much heavier tax upwards of 37 percent.  It appears that shop shut-downs are not due to a lack of demand, but due to a lack of state tax payment.



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