By Ben Adlin

Washington’s legal cannabis industry kept on booming even as “puff, puff, pass” was put on hold during the pandemic, breaking monthly sales records multiple times in 2020 and raking in hundreds of millions of dollars in state taxes. Growth was more modest in the city of Seattle, however, and slower still around Capitol Hill—a sign that many who once commuted into the city may be buying weed closer to home.

While the six shops that serve the Capitol Hill neighborhood—The Reef, Ruckus, Ponder and three Uncle Ike’s locations—together did more combined business in 2020 than the year before, according to state sales numbers through November, only The Reef kept pace with regional growth. Ponder and Ruckus each had smaller increases, while two of three Uncle Ike’s locations actually saw sales drop.

“This really does look like an outmigration,” said Jim MacRae, a data scientist who monitors the state’s cannabis market at Straight Line Analytics. “That suggests to me that business overall is shifting to different parts of the state.”

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Sales data from 2020 paint a pretty clear picture: Consumers began buying more in March, around the time of Gov. Jay Inslee’s stay-at-home order. Since then, what was initially seen as stockpiling has become the new normal: Monthly sales are up roughly 30% compared to months leading into the pandemic, climbing from about $95 million in February 2020 to more than $130 million in May and July.

Prior to the pandemic, monthly sales had exceeded $100 million only once, in August 2019.

Anecdotes and reports of the rise in consumption of drugs and alcohol abound during the COVID-19 crisis.

Other states with mature cannabis markets, such as Oregon and Colorado, have also seen sales surge during COVID. One recent study found that in New York, where cannabis remains illegal, people are taking hard drugs less often and reaching for weed more instead.

“As seen across the industry, people really gravitated towards cannabis for some much-needed relief in 2020,” Jesse Codling, director of marketing and creative at The Reef, said in an email. “Edible and CBD sales went way up! We also saw an uptick in larger weight flower buys.”

Ponder owner John Branch said much of his shop’s business “skews toward the lower-price stuff now, and people are buying in bigger quantities.” He also reported selling more edibles during the pandemic but said CBD sales have been flat.

“What we’re seeing is that the one product category that’s actually gone down is vape cartridges,” Branch said, noting that some customers—especially those who use marijuana for medical purposes—have switched to metered-dose inhalers.

Ponder has seen a 17% increase in sales since the pandemic began, Branch said, with business in the second half of 2020 being stronger than the first. “Because people spend more time at home now,” he said, “they have more time to smoke.”

While state-level cannabis sales have been strong, noted MacRae at Straight Line Analytics, growth rates are progressively lower as you zoom in from Washington state to the Capitol Hill neighborhood.

Comparing sales data available for the first 10 months of 2020 to the same period in 2019, he found that Washington’s legal cannabis market grew 29.4% year over year. “King County was 22.6%, almost a seven-point drop,” he said. “Seattle, the city itself: 19.6% growth.”

On Capitol Hill, the strongest growth was at The Reef, which opened on E Olive Way in 2018 and now does more business than any other shop on the hill. It saw year-over-year growth of 24.4% and now pulls in more than $600,000 per month.

Sales at Ponder, on E Union, grew by 15.2% over the same period. Ruckus, just off 15th Ave E, saw an increase of 5.3%.

The Reef, Ponder and Ruckus each compete with a nearby Uncle Ike’s location, but overall Ike’s has been losing market share over the past year. Sales at the chain’s East Union Street store, not far from Ponder, declined 8.7% in 2020 compared to the year before, MacRae found. The Ike’s location on 15th Ave E, across the street from Ruckus, saw a dip of 13.9%.

Neither Ruckus nor Uncle Ike’s responded to multiple requests for comment.

The booming sales come as many around the industry are calling for reforms to help include more people of color in ownership of the businesses and stores that have formed during the waves of legal marijuana growth. A state Social Equity in Cannabis Task Force has been formed to try to begin to address the problems and could help drive new programs and the creation of new opportunities for more stores to help diversify the industry in Seattle and across the state.

While Uncle Ike’s is still a major force on Capitol Hill, its longtime dominance is waning. Back in November 2017, the company was responsible for about 75% of all cannabis sales around Capitol Hill, MacRae noted. That had fallen to about 55% by late 2019.

As sales across the state began taking off last spring, Ike’s fell below the 50% threshold. “Between April and July—three months—they slipped as a percentage of the market from 53.5% to 45.6%,” MacRae said. “That is right at the peak of the pulse in sales.”

On the other hand, Uncle Ike’s location on E Olive Way, which opened last August as a competitor to The Reef, has been growing quickly. During the first month of business, it accounted for 17.7% of total cannabis sold between the two shops, MacRae found. In the next three months, that share climbed to 25.4, 29.3 and then 32.7%.

Of the three cannabis retail centers on and around Capitol Hill, the one on 15th—where Ruckus and Ike’s are—does the most business, although growth at the Olive Way shops could eventually eclipse them.

“When you look at the three [areas], two of them are shrinking, one of them is growing,” MacRae said. “A large part of that is the development of the Olive Way market.”

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