Colorado's $200 Million Pot Industry Is About To Grow Even Bigger

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 Colorado’s Green Rush

 

Within the industrial sized marijuana farms that encompass Denver’s now flourishing warehouse districts, it’s balmy.  A comfortable 80 degrees…with just the right amount humidity and rows upon rows of head-high pot plants with swollen, resin laden flowers oscillating in the breeze of the fans.

These clandestine, high THC weed grow ops are easy to drive by unnoticed from the street. With one small exception…the cluster of high security cameras located on every corner of the building. Despite their average appearance, inside these bleak looking units are growing unmolested rows of pot plants, the world’s first regulated…for-profit pot. For all of the national press on the topic, very little is actually known about it.

In the last 24 months Colorado has approved 739 of these indoor weed farms after screening their owners’ finances and requiring that all flowers (also known as Buds) be watched on CSS-TV and that all plants and buds be bar-coded every moment – from marijuana seed to bud sale. All of the local building requirements have been met and inspectors have signed off. Additionally the cops — city workers, state officials and even the feds — can stop by and say “Hi”.

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As marijuana legalization starts to cultivate roots throughout the U.S., CO represents the best peak into our strange and welcome new reality… potentially headed for Washington state next.

If Washington, as expected, follows Colorado’s experiment, its state regulators will be investigating entrepreneurs’ finances for links to organized crime and keeping steady watch over leakage to the black market — even as they allow warehouses of weed.

The challenges are immense. Washington’s new marijuana law, approved by voters in November, creates a market for social use — vastly bigger than the medical-marijuana market regulated in Colorado. There is nothing like it anywhere.

In Colorado, regulators had to broker a shotgun marriage between law enforcement and marijuana dealers. Anxious state regulators wrote more rules than they could enforce. The state is now thinning its thick rule book, even as drug cops say Colorado-regulated marijuana has popped up across the Midwest.

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Capitalism unleashed, medical marijuana suddenly became a $200 million industry, with retail pot prices averaging about $7.50 a gram — among the cheapest in the country.

The federal government — despite its ban on marijuana — has largely been hands-off. Not a single big growing operation has been raided. It’s unclear how the Justice Department will react to the massive, voter-approved expansion last fall of social-use markets in Washington and Colorado.

Colorado Gov. John Hickenlooper, the grandson of a bootlegger, said regulations need to address teen use while acknowledging consumers’ “huge appetite” for an increasingly potent drug.

This is not your father’s pot,” he said.

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Colorado’s one-of-a-kind system arose through necessity.

In 2000, it joined Washington in allowing medical marijuana, but it wasn’t until 2009 that Denver, like Seattle, began seeing wildcat marijuana dispensaries popping up across the city.

Then-state Sen. Chris Romer, son of a former governor, in 2010 pushed through medical marijuana regulations envisioned to be “as strict, if not twice as strict, as alcohol.”

Five-figure licensing and application fees — plus security and requirements that dispensaries grow most of their own product — added up to $500,000 or more. That was intentional, Romer said.

“If you raise the bar high enough, they won’t risk their $500,000 or million-dollar investment to sell to youngsters,” he said.

With a new law in place, a retired liquor regulator and onetime drug cop, Matt Cook, was brought in to broker a five-month negotiation that “had drug dealers on one side, law enforcement on the other, and my staff in the middle,” he said.

Cook had one primary goal: no “diversion” of marijuana spilling from regulated grows onto street corners.

The result was a blizzard of rules: 24-7 video surveillance in farms and dispensaries accessible to enforcement officers via the Internet; bar codes on each plant; criminal background checks; and manifests faxed to Cook’s staff each time a pound of pot was moved.

“The process works,” said Cook, who retired and is now a consultant to the medical marijuana industry. “It sort of set the example for the rest of the nation. This commodity won’t go away. And it can be regulated.”

Colorado’s 2.9 percent state sales tax last year generated $5.3 million from medical marijuana sales. Cities, which can impose huge licensing fees and extra sales taxes, have reaped far more. Dispensary owners say they pay federal income tax, often at high rates because their businesses do not qualify for many deductions.

With all the marijuana and money out in the open, theories abound about why federal authorities haven’t intervened. Most cite Colorado’s role as a swing state in presidential elections and the fact its own regulators — not federal drug cops — are called to handle problem dispensaries.

Denver Relief’s growing site, in a nondescript warehouse in northeast Denver, is a midsize operation by local standards: 2,000 plants, 13,000 square feet, 62,000 watts of power and 2,000 gallons of filtered water a day. Building costs were $500,000, including the site’s own transformer.

Up close, flowering marijuana plants look like Frankenflowers, genetically filtered into strains such as Romulan or Red Headed Stranger to produce plum-sized buds dangling from spindly stalks. The collective was one of the first amid the Colorado medical marijuana land rush of 2010. More than 1,800 budding entrepreneurs, some pushing shopping carts full of documents, lined up at Cook’s office, dreaming of getting a state license to grow or sell pot.

 Source – Dispatch

  

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