The Price of Marijuana in Colorado

In the midst of celebrating the first legal recreational marijuana sales in the US in nearly 100 years, there seems to be an awful lot of bitching about the price of legal weed. For every celebratory post on my Facebook news feed, there are at least two critical posts: photos of receipts from adult use shops with nasty comments about pricing, posts about black market pot being cheaper, posts glorifying states where people don’t go to jail for possession of small amounts. And posts about the “greed” of Colorado retail operators.

Let’s get something straight: what’s happening in Colorado is HUGE. Colorado is the only place in the entire world where recreational use is actually legal, and this is without question the biggest thing to happen for marijuana in any of our lifetimes. It’s certainly worthy of major celebration.

Yes, it’s decriminalized in other places, and medical qualification is pretty liberal in some areas, but that’s not the same thing as legalization, not by a long shot. The critical thing to remember is this: PEOPLE ARE STILL GOING TO JAIL FOR CANNABIS ALL OVER THE COUNTRY AND ALL OVER THE WORLD, and any advocate or activist who doesn’t recognize the significance of Colorado’s legal status and instead wants to bitch about prices is, for lack of better terms, an asshole.

Let’s think for a moment about the people who have opened the first pot shops in Colorado. Application for the first round of adult use retail licenses is limited to operators of licensed Colorado medical marijuana dispensaries. The folks who operate these dispensaries have served the state’s medical patients, lobbied for new laws, and put their freedom on the line in the face of federal law for years…they aren’t johnny-come-lately opportunists simply looking to make a quick buck.

And as they open the nation’s first retail stores, these business owners are our “guinea pigs” in terms of gauging how the feds will react to state legalization. These first adult use retail operators in Colorado are assuming a huge risk for their businesses, their finances, and their very freedom, and they aren’t doing it behind closed doors, they’re doing it in front of news media from around the world.

Opening a pot shop in Colorado isn’t cheap. License fees for retail operations are not cheap: after an initial $500 application, owners must pay $250 for each “key employee,” $75 for each member of support staff, $250 for vendor registration, and between $3,750 and $14,000 for a business license, depending on the existing medical marijuana license held by the owner, which costs between $7,500 and $18,000 depending on the number of patients served. An optional cultivation fee adds another $2,500.

Due to concerns about federal asset forfeiture that include real estate, it is notoriously difficult to rent property for marijuana businesses, and property owners generally charge a steep rate that reflects the legal and financial risk of  renting to a marijuana business. Marijuana retail business owners are also likely to spend large amounts of money on legal counsel through the planning stages of their business, and will also have paid to retain a lawyer as they begin operation.

And it’s not exactly easy to get business loans for marijuana operations – the ability to use banks at all is currently questionable, so operating on a cash basis is necessary.

But despite the initial costs, yes, the owners of these shops will probably make money, and lots of it. One proprietor told a local news source his shop’s first day of operation was likely to generate $30,ooo in revenue. At that rate, shop owners should do quite well.

And shouldn’t they, after all? Advocates for legalization have been shouting for years that taxing and regulation will be good for our communities. We can’t be so short-sighted as to think that marijuana won’t be regulated to some degree in our country. All of our complaints about the black market would still hold true in an unregulated system: “Dealers don’t ID so kids can get it on the black market,” “you don’t know what you’re getting on the street,” “it will bring money to our communities,” and etcetera ad nauseam…Isn’t this what advocates have been saying all this time in order to get pot legalized?

Decriminalization just doesn’t go far enough. Sure, it’s great that recreational smokers don’t go to jail for an ounce of weed. But their pot doesn’t just magically appear. Where’s the protection for the growers? Where’s the protection for your buddy who sells you the weed, the guy who’s likely to have more than an ounce at any given time? Is it ok to have a system that puts folks like them in prison so you can have your bargain priced quarter today?

Because the prices won’t always be this high in Colorado. After the news reporters leave, after the first pot tourists go home, and after the initial buzz dies away, supply and demand will dictate market prices, just like it does in any other industry. That’s capitalism for you. And to me, it sounds pretty sweet.

Yes, the 27.9% state tax on retail sales is steep, and cities can add additional tax. However, Colorado voters overwhelmingly approved this tax, which will fund education as well as regulation of the new industry. While it adds cost to customers, the tax also makes an effective (and valuable) statement that recreational marijuana is here to stay, and will be a boon to the state, which only adds to public support and perception of recreational marijuana’s potential as a viable and legitimate industry.

Considering all this, it’s no surprise that prices are higher than what one might find on the black market – or the medical market – in other states. It’s also important to note that Amendment 64 also allows adult residents of Colorado to cultivate 6 plants at home, so people who cannot afford retail prices do in fact have another option for legal use.

So before you start spouting off on Facebook about how much better a deal you can get on your home state’s black market, think for a minute about the cost of getting arrested. Think about the cost of having your home raided, your children taken away, your freedom gone. Even if you feel the security of decriminalization, think about the other folks who don’t.

The initial cost of retail marijuana in Colorado may be steep, but freedom is priceless.