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Aug. 9, 2022

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Cannabis is Washington’s 4th most valuable crop, industry report says

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Apples may be Washington’s biggest cash crop, but legal cannabis is gaining ground.

Growers in Washington generated wholesale revenues of $653 million on 561,000 pounds of legal weed in 2020, according to a new estimate by Leafly, a Seattle-based cannabis marketplace and information site.

That makes cannabis Washington’s fourth most valuable legal crop, behind only apples ($2.1 billion), wheat ($949 million) and potatoes ($753 million), but ahead of cherries ($562 million) and hay ($501 million), according to figures from the U.S. Department of Agriculture.

It’s also enough to rank Washington as the fourth biggest producer of legal cannabis, by wholesale revenues, among the 11 states with legal recreational sales, which last year totaled $6.2 billion in wholesale revenues, according to Leafly. California leads the U.S., with $1.7 billion, followed by Colorado ($1 billion) and Michigan ($736 million).

Washington and Colorado were the first states to legalize sales of recreational cannabis, in November 2012. Washington had its first commercial crop in 2014. The state currently has 1,070 licensed producers or producer/processors, according to the state Liquor and Cannabis Board.

Leafly released the wholesale estimates for Washington and other states in part because legal cannabis still lacks the recognition that other agricultural crops get as a source of economic value.

“Cannabis is now Washington’s 4th most valuable agricultural crop,” said Leafly editor Bruce Barcott. “But Washington’s ag community and state ag agencies still refuse to recognize cannabis farmers as farmers.”

Indeed, because cannabis isn’t federally legal, it’s not in the USDA data that Washington and other states use in their own yearly rankings of farm output, state and federal agriculture officials said.

Lack of federal status also means Washington’s cannabis farmers don’t get the same benefits and protections that most other farmers do.

They are excluded from protections under Washington’s Right to Farm Act, which shields farmers from nuisance lawsuits by neighbors. They also can’t get the state property and estate tax reductions that farmers get for croplands, and aren’t entitled to federal farm assistance programs, state officials say.

States typically publish data on retail sales and taxes, but there’s little available publicly on revenues that cannabis brings to farmers, Barcott said.

To calculate Washington’s wholesale figure, Leafly estimated that every dollar in retail sales generated 47 cents in wholesale sales, Barcott said. In 2020, Washington reported around $1.4billion in retail cannabis sales, according to calculations from LCB data.

Leafly only estimated wholesale revenues for 2020. But applying Leafly’s percentage to earlier years in Washington suggests that wholesale cannabis revenues have grown from around $68 million in 2015 to around $454.5 million in 2018 and $653 million in 2020.

Washington’s illegal cannabis industry, meanwhile, has shrunk considerably under pressure from legal weed, which was cheaper than its illegal counterpart soon after the state industry launched, LCB officials said.

The agency has no firm estimates for how much illegal weed is still grown in Washington, but acknowledges that some remains. “Today, we mostly see only large-scale [illegal] operations prepping to divert out of state to states that haven’t legalized,” said LCB spokesperson Brian Smith.

Even though state and federal agencies don’t rank cannabis as a farm commodity, Leafly’s effort earned a nod from Christopher Mertz, USDA’s Northwest regional director, who called it “a fair attempt at trying to see where that industry sits with other U.S. crops.”

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