Notable Players

A Deeper Look At This State

Regulatory Framework

Washington state is a trailblazer in the legal cannabis world as one of the first states to pass adult-use. This well-established adult market has been wildly competitive yet seems to have found its equilibrium with license fees and population to license ratios at industry lows.

Moreover, with 473 dispensaries to 452 beer, liquor, and wine specialty shops, the cannabis market is on par with the alcohol market, removing any hopes for a golden ticket for license holders.

Vertical integration is prohibited in the state, and no single operator can have common ownership of more than three dispensaries, inhibiting economies of scale and industry profitability.

Until the regulatory regime changes, building brands with consumer demand pull may be the only way to generate acceptable returns.


Notable Market Activity

July 2019 | 4Front merges with Cannex

May 2019 | Cannabis One acquires Honu Brand

What's the Play?

The Evergreen State is a mature West Coast market that has not been very welcoming to out-of-state investors, though signs indicate this is changing.  However, until the regulatory framework does change, even "in-state" consolidation at the retail level will prove problematic.

For now, the best play in the state is to be a low-cost producer with strong brands. With the state making a killing on the industry's excise taxes, we expect change to be slow. That said, investors and MSOs would be wise to keep an eye on this sizeable market, as in-state operators will eventually clamor for a loosening of the regulations hindering MSOs' ability to acquire here.



Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~7.8MM

Medicinal Legalization

1998

Adult-Use Legalization

2014

MMJ Patients

~49K

Monthly Revenue

~$133MM

Cultivation Cap

30K Sq.Ft.*

Cultivation Licenses

1,091/No Limit (Issued/Limit)

Retail Licenses

484/556 (Issued/Limit)

Retail License Cap per Operator

3

Vertical Integration

Not Allowed

Delivery

Not Allowed

MMJ Qualifications

Less Restrictive

State Population / # Retail Licenses

~16K

Annual Tourists

~
110
MM

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

*Three cultivation license tiers: Tier 1 allows up to 2K sq.ft., Tier 2 allows 2K-10K sq.ft., Tier 3 allows 10K-30K sq.ft.

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data
Shit We Don't Know

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