THE CANNABIS INDUSTRY IN DENVER AND COLORADO IS BECOMING BIGGER AND BETTER
Jan 1, 2014, ushered a new era in Colorado when the government approved laws that allowed the sale of legal marijuana to adults over the age of 21. Despite the nay-says from anti-legalization advocates who predicted a major increase in marijuana use among teenagers in the region, two years down the line, drug-related crimes and drug abuse has remained constant or plummeted. The traffic fatalities that the anti-marijuana advocates foretold failed to materialize.
However, one thing that is explicitly clear is that retail sale of marijuana was accompanied by overwhelming positive results. Colorado Revenue Department said that on July 1, 2014, to June 30, 2015, the state received about $70 million in taxes from marijuana even exceeding the $42 million tax on alcohol. The current crime rate in areas such as Denver, which is considered to have the highest number of cannabis dispensaries has slightly reduced compared to the year2013.
Despite the success, there a few issues that have depicted the legalization of pot as not been entirely perfect. There have been increased cases of inexperienced users overindulging and consuming more weed than required. Some mistake a pot-infused brownie as a single serving when it is meant for a party of 10. According to Denver’s Rocky Mountain Poison and Drug Center, there has been an increase in pot-related calls in 2015 than in 2013. The Journal of the American Medical Association also noted in its publication that several local hospitals have seen an increase in the number of patients who arrives while uncomfortably high. Apart from this evidence, marijuana-related deaths and freak-outs remain virtually non-existent.
As time goes by, the once shameful drug deal is steadily being turned into a cozy retail experience. Two years in and the government is progressively licensing many dispensaries to delve into this lucrative business. Competition is heating up, and day-in-day-out retailers are looking for innovative means to distinguish themselves. The design is playing a pivotal role in this booming business. Take a stroll in a few or the dispensers in Denver or the larger Colorado and you will note that they are as sleek as any shopping malls or trendy boutiques that want nothing less than creating a worthwhile buying experience. The predominant clean and finely curved counters resemble the pharmacy desk in a drug store.
The retail pot business has matured over the last 25 months with products quality and appearance (something that was of great concern to many) being given high priority. Walking into a retail pot store that resembles a medical center or science laboratory creates an aura of a safe and hygienic environment. This reassures customers that what they are buying is safe and healthy.
It is estimated that the sale of marijuana can hit the $35 billion mark in 2020 if all the 5o states legalize marijuana. When we consider the fact that in Colorado it is already legal, the sales are bound to surge in the coming years with the respective government increasing its tax returns. The industry is expected to rake in millions of dollars with the government benefiting from licenses and other application fees.
Positive Effects of Marijuana Legalization in Denver and Colorado
In the words of James Paine, a Managing Partner at West Realty Advisors, “there has been a significant increase in housing prices due to pot legalization.” The budding marijuana industry has significantly impacted the prices of homes in this region. Home prices bumped up by double digits; inventory started falling dramatically, and bidding wars have become a common scenario. In March 2015, Denver experienced a large jump in home prices at 10%, coming second to San Francisco.
The legalization has led to more people flocking the region. And it is not only about those who want to use the pot freely, but also, those who are ready to seize the many job opportunities created by the policy. Beyond dispensaries and growers, legalization has become a boon for other businesses such as HVAC and security companies. We cannot pinpoint that pot is the main reason that people are moving into Denver, but what is certain is that it plays a significant role.
Colorado has a very lucrative tourism industry. People cascade from miles to come and view epic sceneries, go skies, climb pike’s peaks and enjoy the unique lifestyle the region provides. Legal marijuana which is specially packed and finely graded has become a recipe for success in the tourism industry. It is estimated that 90% of the recreational income earned by town dispensaries in the year 2014 was from tourist. It is also estimated that 7% of the retailers are managed and operated by non-locals.
The trend has several benefits. It boosts the region’s economy and helps the locals to earn through their various enterprises. And on a lighter note, it provides pot smokers with a chance to smoke legally without watching behind their backs!
Challenges faced by dispensaries in Denver
Marijuana legalization didn’t come without its challenges especially to retailers. The first challenge is that besides it being legal in Colorado, it is illegal at the federal level. This is a great challenge to individual dispensaries that want to receive bank services. Banks cannot oversee their legal businesses transactions since they don’t want to be associated with substance traders. They may choose to do business with them, but there is a high chance that their accounts will be closed abruptly in case any compliance investigation crops up.
Since the dispensaries have nowhere to bank their money, they are restricted to operating only with cash. This poses a significant risk to marijuana businesses owners and their employees. They, therefore, have to find appropriate ways to fend themselves in the quest to protect their businesses. This explains the reason as to why many of these dispensers have heavy security surveillance and tight security procedures. They spend large sums of money on security alone.
The cash transactions by these marijuana businesses also pose some challenges to the government. It becomes very difficult to tax individuals whom you can’t have a clear money follow-up. The only solution would be for them to have a banking system where the government would follow-up and impose taxes depending on profit margin. This insinuates that despite the government collecting millions of taxes from these pot retailers, there is still many of them who are under-taxed or those who evade taxation entirely.