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Friday, 3 June 2016

Licensing Scheme for Medical Marijuana Market May Be a Boon for the Black Market in Washington State

The Narcosphere

Critics contend current cap on new cannabis stores is too low and could force many patients to turn to back-alley providers

The state of Washington’s medical-marijuana industry has been in disarray since the passage of legislation last spring that calls for pushing businesses in that now-unregulated “grey market” into the state’s regulated recreational-cannabis market.

The turmoil has been exacerbated by a new licensing cap established for cannabis outlets, which critics contend is based on a dramatic underestimation of the demand for medical marijuana (MMJ) in the state. Those critics argue further that the “under-licensing” will only lead to an expansion of the black market — and associated social woes — that the cannabis-legalization movement is designed to negate.

A recent public-records request by Narco News has produced a series of emails and documents that tend to support the MMJ community’s concern that state regulators may have low-balled the number of new retail-store licenses being issued to address the state’s medical-cannabis demand.

Washington’s MMJ grey market has operated for years in the open, under a thin veneer of legal protections and absent formal regulation. That all comes to an end as of July 1 of this year, when a select number of MMJ dispensaries, or storefronts, will be issued recreational licenses based on an elaborate rank-ordering review system, and the balance of the dispensaries will be forced out of business by the state.

The assumption by some cannabis experts is that many of the grey-market MMJ entities that do not make the licensing cut, along with the patients they serve, will essentially slip into the black market — opening them up to potential criminal prosecution. Many MMJ advocates see the new recreational licensing scheme for the MMJ market as a slap in the face to long-suffering patients who will lose access to the specialized services and products they need if forced into the commercialized recreational market. They would have much preferred a dual-track licensing system that set up a specialized regulatory scheme for medical marijuana designed with patients in mind.

Regardless, that is not what is playing out in Washington at this time. The state’s MMJ dispensaries, or at least some fraction of them, are being rolled into the recreational market, so getting the licensing count right for this newly regulated MMJ market is critical, or patients will suffer because their needs won’t be served — as will the entire legalization movement if large numbers of MMJ operators slide from the grey market into the illicit market.

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