Legal marijuana is spreading across the country, with Colorado and Washington leading the way with legalizing recreational use.
Though it’s a good bet that many “legal” marijuana smokers don’t fully understand where that weed comes from, or what business pitfalls come along with crafting the different strains of cannabis featuring varying levels of THC (Tetrahydrocannabinol, the main chemical responsible for the high marijuana produces) potency.
Business Insider was invited to check out the grow operation of a local home medical marijuana producer in Washington State. We’ll call him “Will” to protect his identity.
Will, a former welder who jumped into growing last November, is worried about the common grower fears of being shut down by the feds. But he’s also concerned that the very same bill that led him to jump into the growing business, could now actually kill his budding operation.
Will is especially concerned at the potential high taxes that could be levied on cannabis in the state, which could hit 75 per cent. Washington State hopes to use these taxes to bolster its waning coffers and keep it in the black.
Keeping the state coffers in the black could put Will in the red. To save his business, Will has started trying to grow some of the most THC-potent strains in the world to meet the high demands of the changing consumer base.
Come take a look inside the home grow operation of a man trying to overcome the loss of his wife to cancer last year and who is fighting the daily pain of the disks in his back having almost totally degenerated.
This is Will. When Washington state voters approved a law allowing recreational marijuana use, he wasted no time finding the best pot in the world to start his business.
Washington is now the second state in the nation to allow anyone over 21 to buy up to an ounce of high-grade medical weed packed with extremely high levels of THC.
THC is what gets smokers high, it concentrates on the buds of marijuana plants like these growing on Will's land. In the 1980s, THC concentration averaged up to only one per cent.
Today's plants can hold up to 25 per cent THC. That's what Will's shooting for because the competition is already so fierce. Anything less concentrated isn't profitable for him to grow.
The market dynamics for marijuana sales are entering uncharted territory as the state legislature steps in and assigns regulations, requirements and taxes at all levels of operation.
And the outlets that sell to the public are the retail end of the three-tier system. Controlling more than two sections of the chain by any one party is restricted.
Instead of taxing cannabis at between 13 and 20 per cent like alcohol, pot smokers will pony up 25 per cent in taxes ... per tier.
Though the bill is less than a year old and won't be finalised until late summer, Will's already feeling the pinch of supply and demand on his small operation.
Rooms like this in Will's basement are popping up all over the state and retailers are enjoying a surplus of weed allowing them to buy ounces on consignment for as little as $120.
Pot connoisseurs are demanding more potent marijuana, so the drive is for producers here to grow the most THC-concentrated pot they can. That takes both time and money.
That type of consumer is already proving tough for small-scale growers to satisfy while still maintaining a profit large enough get by.
But with the job market like it is here, and the money and time he's already invested, Will's not going to give up easily.
With the state maintaining a price low enough to keep black market sales untenable, neighbouring states like Idaho have not been so forward in their thinking or their legislation.
Operations like this are very rare in Idaho due to the harsh penalties, so buyers there are willing to pay a premium that struggling growers in Washington have already begun to find hard to resist.
Will is not alone in his consideration to sell to his neighbouring state, and Idaho law enforcement has already seen a dramatic rise in its marijuana arrests with clueless medical marijuana cardholders not knowing their cards aren't legal in the state.
It's situations like this that could force the Federal government to step in and enforce its laws, shutting down Washington State growers and forcing pot back underground.
Business Insider Emails & Alerts
Site highlights each day to your inbox.