Currently, the only numbers being regularly reported out of Washington State’s new shiny LEAF cannabis seed-to-wherever traceability tracking system are the 11 numbers in the following grid, which has been updated every 2-3 weeks since LEAF went what they wish to call “live” on Feb 1.
The table below summarizes data for the first 92 days during which LEAF has been considered operational.
This table tells us that the total dollar amount of sales that has occurred during these 92 days is just over $802 million. I will assume that this includes both retail and wholesale sales, but not excise tax — as that is how “Sales” were reported weekly by the LCB for the first 40 months of the market, when there was a real functioning database that contained very detailed data relating to Washington’s regulated cannabis market.
This represents an average of just over $8.7 million in sales per day during the last three months.
If the ratios from last year were to hold true today, that would correspond to about $5.4 million, per day, in retail sales.
Annualizing this, the numbers reported by the LCB suggest that WA will see just under $2 BILLION in retail sales over the next 365 days (assuming ZERO sales growth over that time, relative to what we have seen over the first 92 days of LEAF’s rollout).
These numbers are WAY WAY WAY over what the Economic Forecast Research Council are predicting for this market. They are more than twice what the EFRC is predicting. The EFRC is quite good at what they do and are not generally off by a factor of two in their forecasts.
The numbers allegedly from LEAF are also substantially above what the market was generating, on average, during Oct of 2017 (the last month in which data were reported under the old functioning system that was powered by BioTrackTHC). During that month, daily retail sales averaged just over $2.5 million (not counting excise or sales taxes).
It is surprising to me that the LCB is reporting daily retail sales for the Feb-April timeframe that are more than twice as much (in dollar volume) as those seen last October. It is even more surprising to me that they reported these numbers without, apparently, thinking about them and checking to see if they made sense.
Many of the good public servants serving the LCB that I have met are better than this. I find it difficult to believe that they would make a mistake such as this without being told to do so. They are better than that.
My best guess is that the leadership (and well-connected middle management) of that dysfunctional organization are using the confusion surrounding the botched rollout of the MJ-Freeway LEAF “compliance reporting” app to slush some of the ill-gotten money they have been sitting on through the banking system in a way that the large federal bank they deal with will not notice.
Either that, or the few numbers that they are sharing with us out of the LEAF system are just flat wrong.
I vote for the latter option, by the way, and stand by my repeated recent assertion that the WSLCB and, by extension, the state of Washington do not currently have a clue about the state or status of the cannabis industry that they have legislated and regulated into it’s current state of existence. They don’t know where the money is and they clearly don’t know either how much cannabis there is or where it is and if it ever was.
I don’t want to belabor the point, but one might think that the LCB would bend over backwards given their recent multitude of failures to get something like reporting basic data on the market correct. They have clearly gone out of their way to generate these 11 numbers (at an estimated cost of just over $420,000 per table). You’d think they would make an effort to do it correctly. At a minimum, you think they’d look at the drivel they are reporting and do some sort of a reality check to see it it makes sense before releasing it. Of course, they DID choose to go forward with the Feb. 1 “rollout” of LEAF. Maybe there is something in the drinking water down in Olympia. That would explain a lot.
I am truly beginning to wonder if The Liquor and Cannabis Board of the State of Washington can get anything right.
As a fun exercise, I took the data they reported above, combined it with the 11 numbers they reported as being through April 18 and estimated the size of retail sales on 4/20 using the daily distribution of retail sales from the same period one year ago bumped up against the sales attributed to the most recent 14 days.
The net result, according to the LCB’s numbers, was that just over $400,000,000 in total sales were added between April 18 and May 3 (yup … that’s $400 million in 2 weeks). That implies that April 20th of 2018 saw just over $40 Million in retail sales and generated about $14.9 million in excise tax (and a few more millions in sales taxes).
4/20 of 2017 saw only about $5.4 million in retail sales — less than 1/7 of what the LCB’s 11 number grid suggests were sold on 4/20 of this year.
The LCB’s reported sales numbers since LEAF started are wrong. They CANNOT reflect the reality in the stores over the past 3 months. The differences are not trivial. They are huge.
I suspect that all of the graft and skimming and fee-inflations and bribes and whatnot were beginning to overflow the secret vaults in the basement of 3000 Pacific Avenue. Their ill-gotten gains were on the verge of spilling out onto the street. Lower-level employees were at risk of seeing the extent of corruption amongst their leadership.
Maybe that is why the LCB has messed up the rollout of Traceability version 2 so badly and so consistently. Perhaps it is in their best interests to obscure what is happening.
This series of mess-ups has created a window of opportunity that would allow them to wash tremendous volumes of ill-gotten money and to prepare for the next phase of their lives after living so frugally on the public dime.
I wonder if the Feds, or our own AG, or even Mr. Inslee himself might not be interested in this?
I also wonder if anyone else is able to get in on this game? It certainly appears profitable.
Either this is evidence of money-laundering by the leadership of the WSLCB …. or it is yet another in-your-face-example of dysfunction in their organization.
If Revenoors can’t even get taxable revenue numbers correct, what good are they? At least the amount of time that their armed bullies* spend in licensed (and certified) establishments tends to keep them away from children. That is likely a good thing.
Governor Inslee seems to be a patient man. I wonder how much more of this he will be able to stomach?
*Note to the subset of the Enforcement and Education Division of the LCB that are good people – please don’t take this personally. I have good reason to believe that many of you are honorable public servants and that you strive to not only do the right thing, but also to do it correctly. Thank-you for that. It is a shame that you are burdened with the leadership you currently face. Please continue to do the right thing, and never forget that, while alcohol and nicotine are killers, cannabis is medicine.
Thanks Jim,
I was a well meaning public servant for fifteen years. I noticed several instances of what I thought were, shall we say “wrong”. I tried to be nice and encourage “right”. I progressed up the ladder using “appropriate ” channels. I got moved to the basement and told to do only what I was told. Then administration gave me no work. Then I was deemed a threatening person and fired. There was no legal recourse. They even published my firing in the local paper. There was no attorney in the U.S. that gave me the time of day. SO YES, there are good employees, but if you want the 70,000 a year plus All the benefits, keep your mouth shut.
Sorry to hear that, Ken.
I would like to think that an organization in which almost 1/2 of it’s public servants count a sidearm as a standard part of their professional toolkit would be more open to constructive criticism from it’s ranks.
It would seem difficult to expect true esprit de corps in the type of work environment you describe.
They need to be run off Cannabis like they were run off from liquor. By Initiative or by legislation.
Perhaps (although one wonders to where they might be run off). Maybe they could be officially put in charge of WestNet … and that would remove the ambiguity that the Courts seem stuck in regarding that nefarious evil organization’s existence.
I know the LCB is no longer running the liquor store monopoly in the state, but they are still very much engaged in regulating and enforcing that industry. Indeed, many of the problems we see in the regulated cannabis industry seem to stem from the manner in which that organization has come to regulate the big recreational killers of today (nicotine, alcohol and guns-carried-by-LCB-enforcement-officers).
I do not, by default, ascribe what we are seeing to incompetence on their part.
They have been granted too much power and WAY too much discretion by the Legislature, in my opinion.
Rather than running them off, perhaps hobbling them a bit and expecting that they begin reading some books related to cannabis might be a good thing. I would also very much like to see consequences arise for stupid dumbass incompetent behavior on their part (particularly when repeated).
In December 2011, this Office filed an in rem forfeiture and civil money laundering action alleging that Lebanese financial institutions, including the Lebanese Canadian Bank (“LCB”) and two exchange houses linked to Hizballah, used the U.S. financial system to launder narcotics proceeds through West Africa and back into Lebanon. Part of the scheme involved wiring funds from Lebanon to buy used cars in the U.S. which were then transported to West Africa and sold. Cash from the sale of the cars, along with the proceeds of narcotics trafficking, were then funneled to Lebanon through Hizballah-controlled money laundering channels. On June 25, 2013, the Government entered into a settlement agreement with LCB in which, among other things, LCB forfeited in excess of $102 million.
Eden – thank-you
How ironic — I was not aware of this other meaning of “LCB” — to be clear, I am referring {partially in jest} to the Liquor and Cannabis Board (nee Liquor Control Board) of Washington State in my post.
Your comment almost makes me re-interpret the multi-hundred-millions of dollars in discrepancies that have shown up in the data reported by our LCB on state-legal cannabis revenue since LEAF began to “serve” as their reporting/traceability system.
One month (April 2018) was inflated by about $350 million and, more recently, each of the monthly retail numbers seem to have at least one licensee over-stating revenue by a few 10s of millions of dollars.
One wonders if the LCB feels an urgency to hurry up and finish clearing out the secure vaults before either the truth comes out —- or they have to move to their new office building later this year.
Here are a couple of quotes from an official US Dept. of Treasury description of the circumstances that Eden describes (available at this link). I truly love the irony.
Thanks again, Eden.
Treasury has reason to believe that LCB managers are complicit in the network’s money laundering activities. Today’s action also exposes the terrorist organization Hizballah’s links to LCB and the international narcotics trafficking and money laundering network.
This network moves illegal drugs from South America to Europe and the Middle East via West Africa and launders hundreds of millions of dollars monthly through accounts held at LCB, as well as through trade-based money laundering involving consumer goods throughout the world, including through used car dealerships in the United States.
I wish I were a conspiracy theorist — with coincidences like this, there would never be a dull moment.