Business picking up at Auburn’s only recreational marijuana establishment

Business just starting to pick up at Auburn's first, and only, recreational marijuana establishment, but owner says it'd be a lot more brisk without onerous tax burden

No Rastafarians about the joint, no bleary-eyed stoners, not a rainbow-colored Dead Head.

Instead, on a recent day, Auburn’s first recreational marijuana store, The Stash Box at 3108 A St. SE, teemed with a different set.

A grandmother, leaning on her daughter’s arm. A 60-something man intent on the pipes, oils, paper and weed.

Not the young people or the counterculture crowd that owner James Blankenship and his four partners had expected before they opened the business last November, two years after Washington state voters’ approval of I-502.

“It’s just your run-of-the mill, everyday people coming in here, like it’s any other shop now,” Blankenship said. “Now that they know they have the option to buy legally, they’ve been coming in more frequently.”

Indeed, it is the ordinariness of Auburn’s first legal marijuana store — it’s well lit, meticulously clean, graced with a lustrous wooden counter and wooden floors — that strikes the first-timer.

And who knows, perhaps these things are capable of turning the first “aha” into a second and third visit.

In the wake of I-502, Blankenship applied for a marijuana retail license and won one of the coveted opportunities in the Washington State Liquor Control Lottery last May.

Despite all the care he put into making the store look good, Blankenship said, business in those first days was paper thin. And the state only made things rougher with its limitations on the type of advertising he could put out, and where, which has the effect of limiting advertising to the business lot.

It’s only lately, he said, given the new signage out front, that this bud-and-leaf business has started to catch fire.

And then, to the ordinary problems that come with getting any business off the ground, add the recent, well publicized surplus of cannabis.

Blankenship said the glut hit when businesses like his were already contending with large inventories that they were forbidden by state law to sell.

And every day, he said, he hears from vendors trying to sell their product, even though, in most cases, safes are full and can’t hold anything more.

“Say you buy wholesale at $9 a gram, you can’t go below that without being in violation of the law. To stay competitive with other stores, you have to move that kind of product basically to where there’s no profit to the company at all, just to make it somewhat more affordable,” Blankenship said.

And every day, he said, there is another grower who comes on line to undercut somebody else. So, to be the store that always has the best prices, he has to be ready to take advantage of the next lowest price.

He blames the state.

Blankenship said there would be no glut if the state were to change its current taxing structure, which, he said, is also preventing I-502 from doing what its framers intended it to do — drive the black market out of the cities and bring in legitimate business.

“It looked good on paper, but when you put it into place, the way they have the excise tax built in, it’s too big of a snowball,” Blankenship said. “We have to put the tax in when we receive the product, so your sales tax is taxing your excise tax. Nobody likes that, and when you’ve done that three times, from the growing site to the processor at 25 percent, and from the processor to the retailer at 25 percent, then adding on about 38 percent for federal tax liability that we can’t write off because of tax code 280E, it really puts a heavy strain on us. Right now, we are just barely becoming profitable.”

He said that if the state were to change its structure, making it a one-time sales tax at the register, the glut would melt into thin air.

“There’s plenty of demand, I’ll put it that way. If people had the money to buy what they really want to buy, the product would be flying off the shelves right now,” Blankenship said.

For the survival of the nascent retail marijuana industry, Blankenship said, he hopes the state can iron out the kinks, ideally within the next year.

“There’s customers that have said they will support us no matter what, but there’s plenty of other people who tell us, ‘I do have connections elsewhere, you know. I can get this cheaper elsewhere.’

“I have good faith that this will come around. The question is how long our customers’ faith will hold out,” Blankenship said.