British Columbia

Don't worry about prices: people prefer to buy legal pot, Seattle attorney says

Seattle attorney Peter Holmes is still flying high on Washington State's legalized pot system. And he has advice for Canada when pot becomes legal in this country: don't worry too much about the price — people want to buy it legally.

Seattle attorney Peter Holmes says even when legal pot was $80/gram in Seattle, it was flying off shelves

Three large jars full of marijuana buds sits on the counter at a Vancouver marijuana dispensary. Most dispensaries in Vancouver are being ordered to shut down this week, but legal recreational marijuana is coming to Canada, the federal government promises. (Rafferty Baker/CBC)

An attorney with the City of Seattle has advice for Canada about getting the balance right on legalized recreational pot prices: sell it, and they will come.

The Canadian Press reported concerns from a leaked federal discussion paper that organized crime is likely to continue its involvement in recreational pot once it is legalized, and a C.D. Howe report noted "The challenge for policymakers is to set tax rates that do not foster an illicit market alongside legal sales."

"What the governments, federal and provincial, should be very cognizant of is not to go forward with the idea of reaping significant tax revenue," agreed University of Waterloo professor Anindya Sen.

"We don't want a situation where tax rates are very high and is an incentive to have a black market."

Legal pot sold well at $80/gram, says attorney

Peter Holmes, who helped oversee the establishment of Seattle's recreational pot shops, says concerns about the higher cost of taxed pot providing an opening for organized crime to continue its involvement did not materialize in Washington State.

"When our first stores opened, we had two in the city of Seattle," he told On The Coast host Stephen Quinn.

"Not surprisingly, the price at the legal stores was quite high, something like $80 a gram, and yet, they sold everything they could get their hands on. People were very excited for the opportunity to go to a nice, clean, well-lit, sanitary, regulated place, and they could not keep it on the shelves."

After recreational marijuana was legalized in Washington state, the first store to open to customers sold out of pot in one day. (Elaine Thompson/Associated Press)

Access needs to grow to stamp out black market

Holmes said the high price was more a function of supply and demand than taxation: "the producers, processors, were charging what the market would bear," he said.

Holmes says the legal market began to seriously cut into the black market as the regulatory system became "mature" in the state.

A sign at a marijuana dispensary in Vancouver. (CBC)

However, the Washington State Liquor and Cannabis Board says the illegal market still makes up 28 percent of the marijuana market, while the grey market makes up 37 percent, despite the price of legal pot going down to $9 or $10 a gram.

"It's purely a function of accessibility," Holmes said. "We are shooting for 400 stores across the state … we're still not at full capacity."

"I think that we have seen that when the stores are open and they have the product, they do quite nicely, and that's where people clearly want to go. That's where they want to make the purchases."

With files from CBC Radio One's On The Coast

To hear the full story, click the audio labelled: Don't sweat the green being charged when it comes to selling green, says Seattle attorney