Washington pots shops facing dilemma: high demand, low supply

The Seattle TimesJuly 10, 2014 

— Hopeful marijuana buyers started lining up outside Freedom Market in Kelso around noon Tuesday, the time the shop planned its grand opening. But by late evening, not a single gram had been sold.

Freedom Market still had no weed.

The 1 1/2-pound shipment finally rolled in about 9 p.m., and employees scrambled to get the product counted and ready to sell to the line of customers by 9:20 p.m. They sold almost a pound by midnight, and by Wednesday afternoon were nearly sold out completely, employees said.

About a pound is expected to arrive Thursday morning, but with such high demand, it likely won’t last long. The store might not have enough weed to keep regular hours for a while, said owner Kathy Nelson.

“We’ll just have to roll with it until it levels out,” she said.

It’s a dilemma retail pot shops around the state are facing this week. Twenty-five shops have now passed final inspections and received licenses – and only a handful have opened – but so far the demand for legal marijuana far outweighs supply.

Many of Washington’s pot proprietors simply can’t find the product to keep their shelves stocked. As a result, several shops fear they will lose potential profits to temporary closures or shorter hours due to lack of inventory.

“No matter how you cut it, there’s just not enough product to go around to all the stores opening,” said Chad Champagne, owner of 420 Carpenter in Lacey. “If I could get 1,000 pounds I would get it.”

Champagne will open his shop at noon Friday. He’s expecting one shipment Thursday night, but hasn’t been able to secure a second.

He wouldn’t say exactly how much he’ll have on hand for the shop’s opener, but anticipated it won’t last long.

“I have enough to last me through the weekend, and that’s probably about it,” he said.

Top Shelf Cannabis in Bellingham opened with the most product in stock Tuesday – more than 20 pounds from three separate processors – and even it is in jeopardy of running out, said manager Sigrid Williams.

Top Shelf had about 7 to 8 pounds left Wednesday afternoon, said employees. They’re getting an order of pre-rolled joints and blunts this week. They hope to secure a few more pounds this week, but at this point don’t have another shipment due for two weeks.

With a constant stream of people wanting to be among the first to buy legal retail pot in Washington, the supply has been going quickly.

Williams said they’re discussing temporarily shortening hours to make the product last longer. They hope to keep the store stocked, but it’s possible they could run out.

“Who knows,” said Williams. “We might stumble upon a miracle where some other grower or processor offers us more.”

Other shops have passed final inspection and received their licenses, but haven’t been able to open due to the weed deficit.

Among those in limbo is Westside 420 Recreational in Longview. The store plans to open July 18, but has so far been unable to secure a supplier.

Owner Sally Sexton said that with such few licensed suppliers equipped with a limited amount of product, prices are rising by the hour.

If she bought at current prices, Sexton said, she’d have to charge $40 a gram to turn a profit. Instead, she’s trying to wait out the initial surge in demand, hoping sell a gram for $25.

“I’m getting calls and complaints and people begging me to open,” Sexton said. “But your customer who just wants to do it as a novelty is not the same customer you’re going to see every day.”

Satori/Instant Karma in Spokane might wait until September to open to secure a dependable, long-term supplier. Owner Justin Wilson said he’s in talks with six suppliers and has been quoted prices as high as $5,000 per pound. He wants to buy 4 to 5 pounds to start, and eventually keep up to 50 pounds in stock.

“It’s OK,” Wilson said. “I’ve waited 20 years for this.”

The marijuana deficit should come as no surprise to pot retailers, said Greg Stewart, CEO of Nine Point Growth Industries, one of the state’s licensed growers.

The first producers didn’t begin receiving licenses until spring, so many haven’t had time to harvest much pot.

Stewart has already distributed the majority of his initial 30 pounds to four different shops. He’s shipping the last 7 pounds to New Vansterdam in Vancouver, which plans to open Friday.

After that, Nine Point will go dry until July 25, when it will have another 30 pounds ready to go.

Stewart said he’s fielded up to 10 calls a day from retailers looking for product, and he’s had to turn them down, leading to an inevitable conclusion: “Everybody kind of knows that we’re going to run out,” he said.

Joe Edwards, owner of producer Root Down, said he also received several calls over the weekend from retailers. However, Root Down just received its license two weeks ago, and its supply won’t be ready for another two months.

But the drought won’t last forever.

As of Wednesday, 93 producers and processors were licensed in Washington, according to the Liquor Control Board. An additional 21 will be licensed pending payment of fees, and 166 await final inspection.

As more producers continue to open – and those already in business have time to harvest – more product will be available.

Producers and shop owners anticipate the market will balance out around mid-August.

AuricAG master grower Steve Elliott said his company’s fastest growing strain is about two weeks from packaging. That harvest should yield 5 to 10 pounds. A week or two later, the rest of its first crop should be ready, with 25 more pounds at least, and maybe a good bit more.

With 5,000 square feet of space in Seattle, the company is a relatively small grower in Washington’s system. The biggest farms can be 21,000 square feet.

Company President Mark Greenshields said he’s recently spoken to five retailers who don’t plan to open until August, when they believe they’ll have a more reliable supply. Retailers are trying to secure deals with AuricAG, but “we’re not going to sign a contract until we know what we have,” Greenshields said. Pointing to 7-foot-tall plants, he said, “As you can see that’s not too far in the future.”

But until then, Washington’s first pot retailers – and pot customers – will have to make due with the limited supply.

“We’re just going with how it goes,” said Porf Chavez, general manager for Freedom Market. “I don’t get frustrated with it because it is what it is. I’m a roll-with-the-punches kind of guy.”

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(Times staff reporters Collen Wright and Bob Young contributed to this report.)

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©2014 The Seattle Times

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