Why Medical Marijuana Stores Are Fighting Legalization

Eric Markowitz, Inc. 
 

Today, Washington is one of about 15 U.S. states where medical marijuana dispensaries can operate—on the state level, at least—legally. With a doctor's signature, patients in The Evergreen State can purchase cannabis from one of hundreds of dispensaries within the state. Or, if they prefer, they can grow it on their own.

 

So last summer, when Washington state legislators introduced an initiative to legalize marijuana entirely, those who drafted the initiative anticipated a fair amount of support from its established pot-growing-and-selling community. After all, the initiative, known as I-502, would license and regulate marijuana production, remove state-law criminal and civil penalties for smoking marijuana, tax marijuana sales, and eventually profit from it.

But the drafters of the bill found just the opposite: Businesses that sell medical marijuana are leading the charge against I-502, and have already mobilized against it.

"The groups that traditionally oppose legalization—conservatives and cops—are not the ones leading the campaign to kill I-502," Dominic Holden, a news editor for The Stranger, a Seattle alt-weekly, wrote recently. "The people leading the campaign to kill I-502 are, paradoxically, other pot activists—specifically, pot activists with ties to the medical marijuana community: dispensary owners, medical marijuana lawyers, medical marijuana patients, medical pot trade magazines, doctors who give medical marijuana authorizations, etc."

The group, "No on I-502," claims that, in essence, I-502 creates more problems than it solves. They're particularly vocal about a clause in I-502 that would persecute anyone over the THC limit of 5 ng/mL while driving—weed's version of a DUI. They argue this stipulation will spur "prosecution of a huge amount of innocent individuals—especially patients…Regular smokers will fail a 5 ng/mL test many hours after smoking, meaning if an individual smokes a joint, and they decide to drive 10 hours later, they could get a DUID, regardless of the fact that they won't be impaired." 

The group, founded by Gil Mobley, a doctor who owns a medical marijuana clinic, says that the legislation will also fail at generating any cash for the state. 

"Even if legal markets were to ever see the light of day, the unreasonable tax structure would stop this initiative from having a positive effect in stopping the black market," he writes on the organization's site.

By 2016, the marijuana market could surge to $8.9 billion. To give some perspective, that's more than the annual GDP of the Bahamas—by about a billion dollars.

Certainly, these are valid reasons to oppose the bill. But there is perhaps a more direct reason medical marijuana dispensary owners fear the legislation: If pot becomes legal, and can be sold anywhere, their niche businesses lose value. It begs the question, why should your customers travel to your dispensary when they could just get their weed from CVS or Walmart or gas station down the street?

"What's the threat?" writes Holden in an opinion article for the The New York Times. "A legal, regulated market for all consumers—not just sick people—could negate demand for a niche medical pot industry altogether."
The dispensary business is huge. According to See Change Strategy, a think-tank that conducted an industry-wide analysis of the medical marijuana trade, the current national market for cannabis is $1.7 billion. By 2016, the marijuana market could surge to $8.9 billion. To give some perspective, that's more than the annual GDP of the Bahamas—by about a billion dollars.

The new legislation reveals a potential pitfall of the dispensary business in that it survives—and thrives—as a niche model for medical patients. But the legalization of marijuana presents troubling signals for dispensary entrepreneurs. Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws, weighed in for Holden's article.

"The medical marijuana industry is driven by profit," he said. "It's not driven by compassion anymore. It is driven by the need to make money."

Read more:

• Can You Fire a Medical Marijuana User?
• Medicinal Marijuana Retailing
• Opening a Medical Marijuana Dispensary

This story was originally published by Inc.

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