Cannabis is a growing business, but Olympia is limiting its impact in Spokane County

click to enlarge Cannabis is a growing business, but Olympia is limiting its impact in Spokane County
Spokane County's retail cannabis market is restricted to fewer than three dozen stores.

In January 2018, KREM-TV ran a story titled "Are there too many pot shops in Spokane?" It was a fair question, but six years later it makes you wonder. Were there? Are there?

As the story noted, there were 33 licensed dispensaries in Spokane County in January 2018.

The cannabis industry has seen outrageous growth in the years since. But flash forward to 2024, and there are still 33 licensed dispensaries in Spokane County. The number has stayed exactly the same.

In fiscal year 2018, licensed dispensaries in Spokane County accumulated $100,699,410 in sales. In fiscal 2023, the most recent year we have data for, legal sales in Spokane County rose to $134,755,213, or $34 million more than in 2018.

That's a nearly 34% increase in sales, but it did not go hand-in-hand with an increase in places allowed to make those sales. The competition remained the same. There were 33 licensed dispensaries in Spokane County last year, just like there were in 2018.

In a capitalist, free-market economy, how can this be?

The brief answer is that because unlike other products, cannabis is regulated in a way that pulls it out of the free market.

A quota system applies to the cannabis market in Washington, and Spokane County is only allowed to have 33 licensed retailers, no matter how successful our market. The state limits the number of licenses.

In 2018, as the KREM story explained, there was a feeling among dispensary owners that there might have actually been too many stores in Spokane County, which had recently seen its licenses nearly double from 18 to 33. But KREM asked businesses about their direct competitors — who wouldn't want to limit their competition?

It is clear that the market has grown, astronomically, but the state continues to limit it. What other product is so limited in Spokane County?

For now, Spokane County is stuck with a ceiling of 33 licenses in the retail cannabis industry. Until the state changes that limit, those 33 license holders are the extent of competition in the market.

As long as the license limit exists, Spokane County's cannabis market will be hamstrung and competition will be limited. To me, that's the opposite of having too many stores. As I see it, in a burgeoning market, we might not have enough competition.

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