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Ep. 420: WA Governor Jay Inslee

Cannabis Economy Podcast
Ep. 420: WA Governor Jay Inslee

Ep. 420: WA Governor Jay Inslee

Governor Jay Inslee joins us and shares how impressed he is with the rapid and positive growth of the Cannabis industry: “One of the most impressive things about this is that how fast this has been seen as a mainstream industry where we now have probably three or 4,000 plus people working in the industry. And we have small business people who have a payroll to meet and are paying their taxes. It became mainstream very, very quickly, and that has been interesting to me how fast a transition can take place.”

Transcript:

Seth Adler: Washington State Governor Jay Inslee joins us. Welcome to Cannabis Economy. I'm your host Seth Adler. Download episodes on CannEconomy.com, that's two n's and the word economy. Have a whole lot of direct insight from cannabis luminaries. So check out the new and updated CannEconomy.com. First, a word from MedMen and then governor and presidential candidate Jay Inslee.

Speaker 2: MedMen continues to expand its footprint on the cannabis landscape, opening new stores in Los Angeles, Las Vegas, and the iconic Fifth Avenue in Manhattan. They've also opened a 45,000 foot, high tech cannabis cultivation and manufacturing facility in Nevada. The company has reached a one billion dollar valuation, making it the country's first cannabis unicorn and it's just the beginning. Learn how MedMen is building the future of cannabis today at MedMen.com.

Seth Adler: Governor Jay Inslee, thank you so much for having me here at the state capitol.

Jay Inslee: Welcome to what I think is the most beautiful capital and the most beautiful state, so ...

Seth Adler: Our view are unbiased, so we appreciate that.

Jay Inslee: Totally, totally.

Seth Adler: Yeah, exactly.

Jay Inslee: Well, here's my argument. Every state is beautiful. Certainly Iowa, New Hampshire, Nevada, and South Carolina are very beautiful states. My argument is we have a little bit of the beauty of all the other states in our state. So we've got Kansas wheat fields, we've got Alaska rain forest. We have California long beaches. We've got Maine rocky coastline. My argument is every state is beautiful and you can see it all in Washington State, so that's my argument.

Seth Adler: That's totally fair. You mentioned a number of states here and I'd like to come back to that. First, we'd love to-

Jay Inslee: Totally coincidentally.

Seth Adler: Indeed. First we'd love to uncover the history of cannabis, legal cannabis, in Washington State. It's not even a bird's eye view. You had a front row ... I mean, you didn't even have a seat. You were doing it. So thanks.

Jay Inslee: You Bet. This has been a major thing that's unique and actually in world history so you don't get to be involved in the first thing in world history very often. And that has happened in our state.

Seth Adler: I had the opportunity to talk to Governor Hickenlooper who everybody kind of knows. He wasn't such a fan going in. We'd love to hear what you were thinking before the vote in 2012 if you can remember back that far.

Jay Inslee: I did not support the initiative. I was running for governor, I had thoughts, "What is the message to the kids as I'm running for governor?" kind of issue and, "Is there going to be an issue of health questions for kids?" and I was concerned about that messaging aspect of it, but it has turned out that those concerns really have not been borne out, thankfully. We have not experienced increase youthful usage in any significance. We have not seen additional criminal behavior. We have not seen those concerns. So thankfully this, from a health perspective, has worked out very, very well. From many perspectives that we'll talk about in the state of Washington.

Seth Adler: Washington State Governor Jay Inslee joins us. Welcome to Cannabis Economy. I'm your host Seth Adler. Download episodes on CannEconomy.com, that's two n's and the word economy. Have a whole lot of direct insight from cannabis luminaries. So check out the new and updated CannEconomy.com. First, a word from MedMen and then governor and presidential candidate Jay Inslee.

Speaker 2: MedMen continues to expand its footprint on the cannabis landscape, opening new stores in Los Angeles, Las Vegas, and the iconic Fifth Avenue in Manhattan. They've also opened a 45,000 foot, high tech cannabis cultivation and manufacturing facility in Nevada. The company has reached a one billion dollar valuation, making it the country's first cannabis unicorn and it's just the beginning. Learn how MedMen is building the future of cannabis today at MedMen.com.

Seth Adler: Governor Jay Inslee, thank you so much for having me here at the state capitol.

Jay Inslee: Welcome to what I think is the most beautiful capital and the most beautiful state, so ...

Seth Adler: Our view are unbiased, so we appreciate that.

Jay Inslee: Totally, totally.

Seth Adler: Yeah, exactly.

Jay Inslee: Well, here's my argument. Every state is beautiful. Certainly Iowa, New Hampshire, Nevada, and South Carolina are very beautiful states. My argument is we have a little bit of the beauty of all the other states in our state. So we've got Kansas wheat fields, we've got Alaska rain forest. We have California long beaches. We've got Maine rocky coastline. My argument is every state is beautiful and you can see it all in Washington State, so that's my argument.

Seth Adler: That's totally fair. You mentioned a number of states here and I'd like to come back to that. First, we'd love to-

Jay Inslee: Totally coincidentally.

Seth Adler: Indeed. First we'd love to uncover the history of cannabis, legal cannabis, in Washington State. It's not even a bird's eye view. You had a front row ... I mean, you didn't even have a seat. You were doing it. So thanks.

Jay Inslee: You Bet. This has been a major thing that's unique and actually in world history so you don't get to be involved in the first thing in world history very often. And that has happened in our state.

Seth Adler: I had the opportunity to talk to Governor Hickenlooper who everybody kind of knows. He wasn't such a fan going in. We'd love to hear what you were thinking before the vote in 2012 if you can remember back that far.

Jay Inslee: I did not support the initiative. I was running for governor, I had thoughts, "What is the message to the kids as I'm running for governor?" kind of issue and, "Is there going to be an issue of health questions for kids?" and I was concerned about that messaging aspect of it, but it has turned out that those concerns really have not been borne out, thankfully. We have not experienced increase youthful usage in any significance. We have not seen additional criminal behavior. We have not seen those concerns. So thankfully this, from a health perspective, has worked out very, very well. From many perspectives that we'll talk about in the state of Washington.

Seth Adler: Yeah. As far as those numbers, we are starting to hear some other voices come out and say, "Actually the numbers that are cited that are flat or down as far as use or as far as violence, those are incorrect." So I'm happy to be talking to the governor. What should we know about these numbers that are now, what, under debate?

Jay Inslee: The numbers, I'll start with revenue because it's the one that I have sitting in from me. We now are generating about $700 million a year in revenues that can help both our health in the State of Washington. The majority goes to health related enterprises and the remainder goes to a general fund which supports schools and all our other services. This has been a very significant boost for our ability to finance other health related and educational services in the State of Washington. And those have gone up actually fairly dramatically the last several years, and we don't see any indication that it's really leveling off at the moment. From the standpoint of helping finance the education of our children and our health-related things, it has been a significant thing.

Seth Adler: $700 million sounds like a lot of money to me, but for folks that say, "Hey, that's actually not that much compared to the ..."

Jay Inslee: Well, this is a $55 billion budget. So what I'm saying it is not insignificant when you're trying to plug several ... for $2 or $3 or $4 billion hole, it is significant.

Seth Adler: It will help.

Jay Inslee: And so from that standpoint, I think it is significant. The other numbers is zero, which is the most important one, which is it appears that that has been the number that would increase youthful problems associated with marijuana. And that's been very, very fortuitous and pleasing that our kids are not having difficulty associated with this while adults are having additional freedom and additional pain relief because this product has now been enjoyed by people much more than sort of the recreational thought that you might've thought in the 60s, when I was growing up, was the image of the product.
It is now something that is in the mainstream for folks and a lot of senior citizens are using the product for general sleep aids and a little pain relief and those things have been really impressive to me how fast that has happened. One of the most impressive things about this is that how fast this has been seen as a mainstream industry where we now have probably three or 4,000 plus people working in the industry. And we have small business people who have a payroll to meet and are paying their taxes. It became mainstream very, very quickly, and that has been interesting to me how fast a transition can take place.

Seth Adler: Podcast [inaudible 00:05:57] knows no time. When you and I are speaking, it is still federally illegal. So as far as mainstream is concerned, we are talking about the State of Washington. And I wonder if you can take us back to between 2012 and July 1st, it turned out, of 2016. The imaginations and what you did have to go through to get that 502 market open.

Jay Inslee: Well, this is like everything else. We've had bugs in the system. We think that the way we regulated this in a multi-tier system with limited entry was a good way to go about it because it allowed us to have a little better handle to make sure there was not criminality to deal with quality issues, to make sure people did have a way to pay their appropriate revenue, and the approach we took I think was a good approach. I would recommend it to other states that want to go this route because we've had just a success at from the standpoint of stability, price stability, a lack of volatility in the market, and with the small businesses that are associated with this. I think we did it ... I would recommend the system that we adopted here in the State of Washington.
But as like any other system, we've had bugs in the system. We had a computer bug here six, eight months ago involving our tracing system that had to get worked out. I believe it is now. We are still working on our quality control has been really good, and I think that that has been a very effective, and I stand by my statement that Washington does have the best weed in America and I stand by that. We also have the best wine in America.

Seth Adler: If anyone's counting.

Jay Inslee: Well, they are actually, we'll talk about why it another day, but we actually have per thousand bottles the highest ranked wines in the United States. I'll argue with Jerry Brown about this all the time.

Seth Adler: There you go. That would be your chief competition at least as far as he's concerned.

Jay Inslee: Yeah, there you go.

Seth Adler: You mentioned some recent issues, it almost ... You could forget that you were regulating cannabis before the cold memos were written and then now they have been rescinded and we'll talk about that in kind of today's reality. But as those memos were being written, I've had the opportunity to speak to former deputy attorney general Jim Cole, who took us through his writing those memos. What were your thoughts as the governor and watching him or a advising him or getting advice from him or getting guidance from him as they turned out to be?

Jay Inslee: We met with the then attorney general Holder about this subject and we were highly confident we could comply with the criteria of that memo and those were reasonable provisions to ... prevent distribution to minors, prevent criminal enterprises. These are reasonable things, prevent violence from being associated with the product-

Seth Adler: And we can do those.

Jay Inslee: We have succeeded on that and we were confident then we would be able to, and we're more confident now. So I think it's very unfortunate that the administration has tried to go backwards as they have in so many ways, yet again in this way. And I'm looking forward to the bright day when the United States Congress joins the emerging majority in America and legalizes this product.
Because I think the experience we are seeing a very rapid cultural acceptance and realization that people's liberty interest is here and use for health reasons and potential generating revenues to fund schools. All of these things point in the direction that this has been a successful endeavor. And on any criteria you can judge by this, this has been a success in the State of Washington. In part because people have been very cooperative and responsible, in part because our small business people have been responsible, small businessmen and women, and in part because we did it the right way, I believe, and have a good regulated system. I recommended, I hope congress will unleash the shackles on this industry and let it move forward.

Seth Adler: They're working on that. And you mentioned the unfortunate rescission of the cold memos. It kind of turns out, I spoke to Senator Cory Gardner who said that that actually might be the biggest thing that helped congress to act on this with the states act as well as other legislation. It seems the legislation that most everyone is excited about. What are your thoughts?

Jay Inslee: If anything happened good out of the Trump administration, we know it would be by accident. If it's an accidental benefit to prod congress to acting, great. That might be an accidental benefit. But what I think is happening here is, and like many things in democracy, the political system is behind the current thinking of the population. And I believe that's true here. I believe it was true in the issues of gay marriage. I believe it's true in the issue of climate change, which we have to defeat, and vast majorities of Americans know that, but Congress still has not been able to act.
In part because we have a climate denier in the White House and a climate denier caucus in charge of the Senate. I think that this is yet another example where citizens are way ahead of the politicians in this regard. And eventually, the political system will catch up, but I would suggest it should be sooner rather than later.

Seth Adler: As far as sooner rather than later, 502 comes in, just to jump back to your history, and that was July 1st, 2014 and we kind of configured the system July 1st, 2016, 5052 comes in and recalibrates the medical marijuana system that was in place. What were your thoughts on redoing that for the folks that already had been in business?

Jay Inslee: Well, I thought it made sense, number one, to have a unified system. So we didn't have confusion, we didn't have divisions in the market that didn't make sense. And it just made sense to have a more unified system for everybody, consumers, industry, government, everybody. I think it was the right general direction to move into. It was not without controversy because people in the medical side were concerned that they would not be able to essentially access ... There was anxiety because you established a relationship with someone who had provided this to you and now it might change. There was anxiety about that. I think largely that we have succeeded in removing those anxieties largely.
On occasion, we will hear people that still have some concerns that they're not getting exactly what they want. We're always trying to fix that if it has happened, but I would consider a substantial success in the unification of the markets, both for the consumer and the industry. And I say the industry, it is an industry that employs a lot of people, and we think about it as an industry and it has become a mature industry in the sense that people look at themselves as making the payroll and paying your taxes and abiding by the law and keeping your customers happy and that's a good thing. And we want to say to make sure that it's stable and that we've had pretty good success in the stability standpoint.

Seth Adler: Okay. We've got a stable market now and I want to use the excise tax for cannabis, and dovetail that to the carbon tax. Let's talk taxes so that folks can get a sense of where you're at on that. Pretty high on medical marijuana. I know that we were trying to pull that down and we went at maybe a carbon tax to get some of this clean energy out there for the masses. How do those two things relate, if they do?

Jay Inslee: It's an interesting question, so I'll give you a roundabout answer. I've been fighting climate change now for two decades.

Seth Adler: Yakima, right?

Jay Inslee: I was a legislator when I ran for the Congress in 1992. It was pretty interesting. My wife showed me a campaign brochure from 1992 when I ran for Congress and I said we had to reduce carbon dioxide. For me, this battle against climate change goes way, way back, and I've understood for a long, long time that what we hold dear is in great risk and unfortunately the science is now becoming abundantly more clear that we have a very short period of time to act.
If you had stood in the middle of Paradise, California like I did a couple of months ago, in a town of 25,000 where there were very few homes left, the whole town was burned down to its foundations. It looked like the pictures of Europe after World War Two. And if you'd stood there with me, I think you would agree we should defeat climate change, and because the things that we hold dear are very much in doubt. Now, I've never made this argument before, but I'm going to try it out to you because you're an expert.
If you haven't yet decided to join us in this mission to defeat climate change and you enjoy marijuana in your life, realize that we may not be able to grow marijuana in a lot of places in the world because of the changing climatic conditions. If you still are holding out on the effort to defeat climate change and you realize that your marijuana may be jeopardized, now you can join this effort. I never made that argument before, so there's the connection ...

Seth Adler: Indeed.

Jay Inslee: And it's actually true because the growing regions for our crops are changing fairly dramatically. We have areas in my state where we have dry land wheat, and as precipitation patterns change the areas of the acreage right on the edge of that, you may not be able to grow products. And this is true all over the world. Certainly, we've seen desertification in North Africa that has spawned mass migration into Europe because people were starving to death. They couldn't grow their products. And this is happening today.
What I would suggest is yes, they are linked in a kind of a circular way. The voters did not vote for carbon tax here in my state last year, but fortunately we are moving forward big time in the fight against climate change. We have a bill that is moving through the legislature that'll give us 100% clean electricity. We have a bill that we'll have a clean fuel standard. We have a bill that will give us net zero commercial buildings. We have a bill that will eliminate super pollutants, and a bill to increase our incentives for electric cars and the like, on top of all we've done already.
Our state's moving in the fight against climate change. I started the US climate alliance with Jerry Brown and Cuomo. We have 21 states now, so we get it. It isn't all about protecting marijuana production, but if that works to get you in [inaudible 00:16:46] board. That's great.

Seth Adler: Exactly. I'm starting to get the hook. I have one more question before the final three questions, and that is let's talk about these states that you mentioned off the top. Iowa and New Hampshire and you rattled off a couple more. I mean, why is someone like you talking about states like those?

Jay Inslee: 'Cause these are beautiful state, obviously.

Seth Adler: That's all, that's all.

Jay Inslee: Actually, they are beautiful states, and they're so diverse. That's one reason why I got ... we've got such a beautiful country because they're so diverse.

Seth Adler: From 2021, January 2021, through January 2025, what might you want to change if you had the opportunity?

Jay Inslee: Now I missed which dates you were mentioning there, but we need a new president and we do need, the Democratic Party needs, to nominate a president who will make fighting climate change the central organizing principle of the next administration. We have to make it the priority. We have to make the paramount mission statement for the government, and we have to provide the American people a vision of a clean economy, a vision of job creation and economic growth that is associated with building clean energy jobs.
And the reason that is imperative is, number one, it is the greatest economic opportunity for growth. Clean energy jobs are growing twice as fast as the rest of the US economy. The two top category for job creation are solar installer and wind turbine technician. This is a massive economic opportunity, but it is also a time of great peril. So let's say time of great peril and a time of great promise, and we need to have a candidate with a vision statement that will run on climate change. No one has ever run for President United States on this issue in a serious manner. And we need to do that, I believe, and offer that vision to the country. Someone needs to do that.

Seth Adler: Someone does.

Jay Inslee: Someone does.

Seth Adler: And we'll see what happens.

Jay Inslee: We will see.

Seth Adler: Final three questions. I'll tell you what they are. I'll ask you them in order. What's most surprised you in cannabis? You have a good opinion on that. What's most surprised you in life? And on the soundtrack of your life, one track, one song that's gotta be on there. First things first though, what's most surprised you in cannabis?

Jay Inslee: Cannabis, and we talked about this, is just how fast people's attitudes and culture can change. It was a criminal behavior where you were an outcast from society one day, a week later people were seeing this as, you're just a member of the Chamber of Commerce with a business down the street.

Seth Adler: I want to interrupt you and I apologize for doing so, but it's so that you can talk about this pardon that you just did.

Jay Inslee: Oh, yes, thank you. Yeah. Yeah. I've issued a pardon, or a potential pardon, for several thousand people with marijuana convictions, misdemeanor marijuana convictions, and that is the right thing to do for something that is now legal, and particularly because we have such racial disparity in our criminal justice system.
We know that the drug wars have been created substantial racial inequity in our criminal justice system and that includes a marijuana laws. That was one of the reasons I've offered this pardon. There is a bill in the legislature I also support that will extend that to several more thousand people to have a mechanism for eliminating those convictions and I hope we're successful. This is one of the many things we need to do to bring more equity and less racial inequality in our criminal justice system, and I hope we move forward in that regard.

Seth Adler: There you go. What's most surprised you in life?

Jay Inslee: Oh, in life. The fact that 50 years since we won a state championship game is still the most important thing in our lives, and my old high school teams are in the State Championship game tonight. That's why I'm thinking about this, and my 99-year old coach, I'm celebrating with him our tournament victory, and so some things never grow old. And then you asked one more thing, what was it? The track?

Seth Adler: The song, but I mean, you were on the team, you were a basketball player, right?

Jay Inslee: I got to play in the team and we're still great friends.

Seth Adler: The soundtrack question, or the soundtrack of your life.

Jay Inslee: The soundtrack [crosstalk 00:20:46] question.

Seth Adler: One track, one song that's got to be on the soundtrack of your life.

Jay Inslee: I got to pick everybody ... I married my high school sweetheart, right? And so you got to pick "our song", right? It's Leaving on a Jet Plane by Peter, Paul and Mary. We've gone back 'cause we left and came back many, many times during our life 'cause I was in Congress, we were in different colleges. [crosstalk 00:21:08]. So if that's not romantic, what is? Come on.

Seth Adler: I'm very surprised you didn't mention grunge at all. Nothing, right?

Jay Inslee: I had to be honest. I had to be honest.

Seth Adler: There you go.

Jay Inslee: Thank you.

Seth Adler: Governor Inslee, thank you so much.

Jay Inslee: Good to see you.

Seth Adler: And there you have, Jay Inslee, very much appreciate his time, very much appreciate your time. Stay tuned.

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Cannabis Economy is a real-time history of legal cannabis. We chronicle how personal and industry histories have combined to provide our current reality.