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Canopy Conundrum



[dropcap class=”kp-dropcap”]I[/dropcap]n 2017, which is the most recent fiscal year with available cannabis data, Washington State produced literally tons of cannabis each month, which totaled $1.5 billion in annual sales according to the Washington State Liquor and Cannabis Board (LCB). The data certainly seems to imply that there is plenty of cannabis in the “Evergreen State.” So it may come as somewhat of a surprise that the LCB’s Year One Canopy Report indicates that cannabis cultivators aren’t growing enough product under their licenses.

The Year One Canopy Report included 792 surveys, with 778 surveys of cannabis production staff and 14 drone surveys. Drones were a preferred method of outdoor canopy measurement for the canopy report team, because outdoor canopy is notoriously tricky to measure, and drones made their task easier.

The report found that cannabis cultivators are using less than half the canopy space they’re allowed for their tiers. Cannabis cultivators in Washington are licensed as the following:


  • Tier 1: 2,000 square feet or less of canopy space.
  • Tier 2: Between 2,000 and 10,000 square feet of canopy space.
  • Tier 3: Between 10,000 and 30,000 square feet of canopy space.


These findings mean that the LCB could potentially bump the cultivators who are growing less than their tier allows down to the appropriate tier. LCB licensees must grow at least half of their licensed canopy in order to avoid having their tier reduced.

So why are cannabis producers not growing as much product as they can, despite the fact that “licensees were generally concerned that the LCB may decrease their canopy due to underuse,” according to the report?

Licensees point to a flawed rollout of the new seed-to-sale traceability system, Leaf Data Systems, as a reason why cannabis production isn’t at full capacity. Another cultivator gripe was market access and that if they produce more cannabis, there won’t be any retailers to buy and sell it. Producers worry that retailers aren’t opening at the same rate production is increasing, so shelf space is limited. Finally, licensees, such as Jeremy Moberg, the owner of CannaSol Farms, pointed to overproduction as an issue. “The whole canopy count was a funny response to not really wanting to address or admit that there is an overproduction issue,” Moberg told CULTURE.  “This was [the LCB]’s response, this kind of wonky canopy count. Then they come out that it’s underutilized, which almost gives the impression that there’s not overproduction. But the underutilized canopy is all just more potential canopy, which pretty much guarantees an overproduction cycle for some time to come.”

“The whole canopy count was a funny response to not really wanting to address or admit that there is an overproduction issue.”


The LCB does not agree with Moberg’s assessment that Washington has an oversupply issue, however. In fact, Brian Smith, the communications director of the LCB, pointed to the canopy report as evidence that there is not an overproduction issue. Smith confirmed to CULTURE that the LCB is working with BOTEC Analysis, headed by Dr. Mark Kleiman, to “take a look at the overall marketplace.”

For the time being, Washington is lacking the data necessary to say conclusively if there is an overproduction problem. While producers and the LCB await BOTEC’s independent analysis of Washington’s cannabis market, there are some other numbers available to help determine the health of the cannabis marketplace in Washington, and that’s the amount of money producers are bringing in.

In 2017, cannabis producers sold $67 million worth of cannabis according to 502 Data. So whether or not cannabis cultivators are utilizing their canopy to the fullest extent, or Washington has too much cannabis, it seems that the cannabis industry is still a profitable one.

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