by TJ Hawkins | August 23, 2014 8:45 pm
The city of Durango and the town of Mancos are just now cautiously preparing to enter the recreational-marijuana arena. Moratoriums against such sales ended in both municipalities at the end of June, and at press time Durango had already received four applications from entrepreneurs hoping to sell recreational cannabis, probably beginning this fall.
Meanwhile, the Mancos Town Board has been seeking to get necessary regulations in place to allow sales as quickly as possible. But the cannabis industry is already in full flower in Telluride, which since Jan. 1 has been allowing retail purchases by the general public at local shops that previously were restricted to only medical-marijuana sales.
In November 2012, the state’s voters approved Amendment 64, allowing the sale of cannabis for non-medical purposes, and in January, Colorado became the first state in the nation to sell pot to recreational users.
Although the depth and breadth of recreational pot’s impact on the local and state economy is unclear, a consensus appears to be building that the new industry is creating jobs and contributing to the tax base while causing few problems for law enforcement or consumers.
Still, there seems to be an unpredictable ebb and flow to the market.
On a snowy afternoon during the last week of ski season, Telluride streets were crowded with skiers hitting the shops to buy some ganja. But in April the city had little tourist traffic on the famed “4/20” national smoke-in, possibly because there were no organized events celebrating the toker holiday, which coincided this year with Easter Sunday.
Telluride pot-shop owners are now looking forward to summer tourism to put the bloom back on the bud business.
A former hard-scrabble mining town that now has some of the priciest real estate in the Southwest, the trendy wonderland boasts four dispensaries – the Green Room, the Telluride Bud Company, Alpine Wellness and Delilah – that sell both medical and retail cannabis. Delilah is the most visible outlet, located in the center of town. Inside, a red-velvet rope separates recreational customers from the medicinal traffic, and sleek glass cases display the different buds “du jour” like chocolates in a candy store.
The medicinal area is private, separated by a partition in the back of the store, with a comfortable couch for lounging. It is a clean, bright facility with colorful artwork on the walls and ’60s music in the background.
Knowledgeable retail clerks at all the outlets provide information on just which strains of mota are thought to be most effective in addressing certain medical conditions. Can’t sleep at night? A cannabinol (CBN) type of THC (the active ingredient in marijuana) could help. Need to reduce physical pain? Certain other strains may provide relief. Victims of diseases such as diabetes and lupus/ rheumatoid arthritis may also benefit from particular strains, while others are believed to stimulate one’s appetite – thus benefitting cancer patients receiving chemotherapy or radiation treatment – or to suppress it, for those struggling with obesity.
Some doctors now advocate the use of medicinal cannabis for yet other afflictions, including epilepsy and glaucoma, and there is a wealth of information available at the dispensaries to enlighten first-time users, including a “menu” of the many strains available.
Delilah has been a medical dispensary since 2009 and Benjamin Steenblik has worked there for nearly three years. He is eager to talk about the positive and not-sopositive aspects of the industry, and says Colorado’s “Grand Experiment” with recreational use is going pretty well.
“Yes, absolutely, I think it has been a real success, in part because the system is so well-regulated,” Steenblik said. “Our state legislators have done an incredible job of looking at the medical model, seeing what worked, what didn’t, and then improving it.”
The growth and sale of legal cannabis for retail profit is regulated by the state with rules similar to, or stricter than, those governing alcohol sales. A web-based system known as MITS (Marijuana Inventory Tracking Solution) lets licensees upload marijuana inventory data required by state regulators for all retail and medicinal businesses.
“That is good for everyone, because it helps legitimize the industry,” Steenblik explained. “It’s a system that is making sure that the product is accounted for from beginning to end.”
It also helps identify dispensaries that may be buying illegally, he said.
“It may not happen often, but I am sure they are out there with product grown on the black market. The MITS system is making us better business owners, which is also a safeguard for the state. It is the proof and evidence that we are in compliance.”
Shops not in compliance may not be able to operate very long, Steenblik said, because tracking tags are affixed to individual plants until they are harvested.
“People just can’t get away with some of the practices that they got away with before.”
More and more people are coming from far-away places to enjoy the legal use of marijuana, but he does not believe the legalization of pot has caused an increase in crime in Telluride.
“As somebody that has been a bartender for nine years, I can tell you that alcohol sales and cannabis sales are very different,” he said.
“When the recreational-marijuana ballot question came up, I was reluctant to vote for it because the title was ‘Tax Marijuana Like Alcohol Act.’
“I have worked for the last 15 years advocating marijuana and its medicinal benefits, but I did not want it associated with something that is a known carcinogen, a poisonous substance” often involved in crimes such as domestic abuse and drunk-driving fatalities.
Pot has its drawbacks as well, of course.
In April, a Denver man fell or jumped to his death after consuming a large dose of cannabis contained in an edible product. The incident received a great deal of publicity as the state’s first death associated with recreational pot use.
But marijuana’s defenders say the plant remains far safer to use than alcohol.
“If people want to attack marijuana because one guy died, it’s ridiculous,” Steenblik said. “Personally, I know of several people whose lives have been changed [positively] by marijuana.”
Among its medicinal and retail clients, Delilah is starting to see a significant number of combat veterans – from Vietnam as well as recent Middle East conflicts – coming in for help with chronic pain and sleep disorders.
What really makes Steenblik happy is the gratitude of such customers who have been helped by CBDs.
The hardest thing that Steenblik has encountered since Delilah opened for retail business in March is keeping the shelves stocked. Since then, the traffic has tripled, and summer tourism has just begun.
He believes Delilah alone could possibly generate at least $100,000 in tax revenue by the end of the year. The stores in town are supportive of one another and refer customers to other stores for products they may not carry.
But he believes there are ways to improve the experience for cannabis users.
“The next logical progression is to create private lounges for people so that they are allowed to consume product in a safe environment,” he said. “There need to be places for the tourists to come in and get hotel rooms where they can smoke what they purchased. “Right now, all hotel rooms have a no smoking policy. It’s a problem because you are [forcing] adults to act like promiscuous teenagers. They sometimes have to get into their cars and go to dark places to consume it.”
Another issue that needs to be addressed, he said, is banking for retail and medical dispensaries, since selling/possessing pot is technically still a federal crime, causing banks to be chary of handling dispensaries’ revenue. Also, retail stores cannot advertise in a publication if 30 percent of its readers are under 21, And for some cryptic reason stores cannot advertise the hours they are open for recreational-marijuana sales.
“What I have issue with is that we have finally allowed [legal marijuana], we voted for it, and yet there are social stigmas that still exist, even though we are slowly dissolving most of them,” Steenblik said. “There are these archaic laws that are still not changing, no matter how much business we do, but they are like small speed bumps. The customers still can’t consume on the street and as of right now will not be able to be smoking in the park.”
Nevertheless, Steenblik is looking forward to a busy summer, with concerts and other events bringing in customers. “This is an opportunity for us to get a very therapeutic and powerful plant to a lot of people that don’t have the luxury we have in Colorado.”
Despite the optimism in Telluride, tax revenues statewide from both medical and recreational cannabis sales have been slightly lower than originally anticipated. Gov. John Hickenlooper estimated in February that combined medical and recreational pot taxes and fees would be about $134 million – and might top $190 million – for the fiscal year beginning in July. But Hickenlooper has since scaled down the expectations by at least $20 million, according to the Associated Press.
State budget analysts have also been setting fluctuating projections. The analysts are banking on the expectation that the numbers will rise as more retail stores open and a onetime tax waiver on marijuana plants expires.
According to the Colorado Department of Revenue’s website, January’s totals for all marijuana taxes, licenses and fees was approximately $3.52 million.
Since then, that total has risen steadily: Combined revenue for pot sales was $4.09 million in February, $4.98 million in March, and $5.27 million in April. The April figure was boosted by a hefty tax intake from recreational marijuana, which brought in more
than $3.5 million in sales and excise taxes. Still, medical marijuana, which is taxed at a lower rate than recreational, continues to bring in more revenue. And the majority of the sales-tax revenue has come from the more than 100 dispensaries in Denver.
Colorado’s counties have seen varying results, since only 14 counties have both retail and medicinal dispensaries.
In January, El Paso County brought in $141,447 for medical-marijuana taxes in January and in February, that rose to $177,929.
Denver County received $483,432 in revenue for medical-marijuana sales tax in January, but that dropped to $442,941 in February.
Montezuma County brought in a total of $4,266, all from medical marijuana, in January; the figure dropped to $2,651 in February. One of three medicinal stores in Cortez closed, causing a drop in revenue for March.
La Plata County gleaned $13,422 in January, $13,041 in February and $16,639 in
March from taxes on medical marijuana. The monies will eventually be used toward school construction, youth use-prevention and treatment programs, or saliva-testing for drug-impaired drivers.
San Miguel County Commissioner Art Goodtimes – a fifth-term commissioner, a county resident for more than 25 years, and a longtime advocate of decriminalizing cannabis — said he is “generally very pleased” with the way recreational-pot sales have been handled.
“There have been a few isolated problems associated with illegal sales, edibles-related panic attacks and federal busts of alleged gang-connected dispensaries,” Goodtimes said. “But, even in an Amendment 64 stronghold like Telluride, with its four dispensaries, there is no visible evidence of cannabis use.”
Goodtimes said the economic boost has been modest but helpful. San Miguel County has seen an increase in cannabis-tax revenue over last year of about 17 percent. “So, it’s not a huge amount for our county, but after years of falling revenues, layoffs, foreclosures and declining budgets, every little bit helps the economic recovery.”
Telluride officials hope to see more revenue this summer from tourists who not only buy pot, but patronize restaurants and motels.
“To actually track how much is due to cannabis tourism is hard to gauge,” Goodtimes said. “Dispensary owners I’ve talked to say that up to two-thirds of their business has been from people from out of town.”
But Goodtimes notes that San Miguel County and nearby incorporated towns do not currently have plans to provide out-oftown buyers safe smoking places where they can legally enjoy their purchases.
“Ultimately I’d hope there’d be many regulatory changes to allow restricted public use, as is allowed for tobacco and alcohol; that banks would be allowed to do business with dispensaries legally; and that the federal government would drop its ridiculous, expensive and unscientific war on cannabis.”
Goodtimes has one pet peeve about Colorado’s new cash crop: its name. He believes the term “marijuana” is inappropriate, saying it was used by newspaper magnate William Randolph Hearst, a timber baron, to try to demonize the hemp plant by linking it with non-white people.
“Colorado has chosen to incorporate a racially-loaded Hispanic slang term popularized by the yellow-journalist Hearst newspapers in the ’30s as part of a coordinated PR campaign” against the plant, he said. “This plant has a scientific genus name – cannabis.”
Long-time San Miguel County Sheriff Bill Masters said if anything about recreational pot has surprised him, it is the surge in firsttime users.
“I was wrong in thinking that everyone who is now smoking already tried it sometime before,” he said. “It seems that more customers are experimenting with it for the first time now.”
Masters has been elected eight times since 1980. His iconoclastic views on the country’s drug policies are documented in his book, “Drug War Addiction: Notes from the Front Line of America’s #1 Policy Disaster.”
In a recent phone interview, he said he has been hearing mostly positive feedback about recreational pot. “I think it’s good that people are buying it legally, as opposed to covertly on the streets.”
However, there remain problems, he said. One involves home extraction of hash oil.
On May 6, sheriff ’s officers responding to a report of a pit-bull bite in a home outside Telluride discovered a hash-oil-extraction operation involving butane bottles and other hazardous materials. The Telluride Fire Department’s hazmat team was called but had to wait for search warrants to enter the premises.
“These marijuana-oil-extraction operations are extremely dangerous, hazardous to emergency responders, the occupants of the house and the neighborhood,” Masters said in a press release. “Still, there is some debate by our legal advisors over whether the operations are in fact illegal.”
Home hash-oil extraction is a legal gray area because most cannabis businesses are allowed to manufacture the oil if they follow specific regulations.
“We are not 100 percent certain what is legal or illegal,” he explained. “The fellow claimed to be a medical-marijuana provider [and] the law is so confusing that even the district attorney is not certain what violation is actually occurring.” Another problem is the large number of infused products with widely varying dosages, as well as the fact that some strains of cannabis produced today are stronger than many people can tolerate.
Masters thinks the industry needs to lower the potency of some strains and offer more advice on the dosage of edibles.
“The clerks are expert pot users and it’s like talking to a guy that drinks a lot – his perception may be different,” the sheriff said.
And while the notion of legalization has been debated for years, not much information was available on edible consumption.
“We did not see edibles and the concentrated products as being a concern,” Masters said. “It’s a surprise, but because of the prohibition on smoking in hotels and in town, people are consuming more edibles.”
There have been some DUI arrests involving cannabis, but Masters stated that the numbers have not increased since January.
Masters is more concerned about the rising number of illegal grow operations under the guise of medical marijuana. “People are pushing the envelope with huge grow ops, and we are working to get a handle on it. They will find out that they are violating the law, even if they think they are clever.
“If a person has a medical prescription and has 25 plants and his wife has 25, all legit, producing 4 pounds a year, he is not supposed to sell it or distribute it, but many are moving it out of state,” he said.
The federal government could react to this with sanctions, he said. “Prices can be as high as $400 per ounce, so there is money to be made. If other states do not legalize it and locals keep going across state lines, they will be hammered by state and federal laws and get a rude awakening.”
A new law states that each adult can have three full-size plants and three immature plants. “Recently I had owners pull 300 plants that had to be destroyed, but the people wanted to be in compliance and they understood.”
Like Goodtimes and Steenblik, Masters is concerned about tourists having no place to smoke marijuana. Masters suggested that a private or semi-private club like those in Denver could work if vented properly.
“It would be a better choice to keep it off the main street and alleys and somewhat contained.” Masters believes the benefits of legalization still outweigh the drawbacks. “At least the money is coming back to Colorado, not Mexico,” he said. “The illegal cartels used to make the money and now we will be able to use the tax revenue for community needs.”
Steenblik also sees a very “green” future for Colorado and perhaps the nation. “Every industry can become green — weed tourism, weed landscapers, more products from hemp.”
Telluride has always been a destination location. Gold-seekers came in 1858 and ski-paradise- seekers have been pouring in since 1970. Will green be the new gold in 2014 and beyond?
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