Legal adult use marijuana is still new, but enough history has transpired to access the data and reach certain conclusions. With the support of our proprietary SP+GTM algorithm, a subset of programs has determined specific findings from Colorado that can be applied for new entries in the evolving cannabis market. The collective data has confirmed our business model and corporate strategy.
Despite the federal prohibition on cannabis, ten states now permit the recreational use of marijuana. Colorado has 507 medical and 519 recreational stores, many of them sharing the same location, and another 810 or so each of medical and recreational grow houses. After five years of legalization, the new law has not led to more young people smoking pot, but organized crime and seizures of out-of-state shipments have increased. According to a 2018 report by the Colorado Division of Criminal Justice, hospitalizations with marijuana listed as a possible factor have increased dramatically, and more people are getting killed in car accidents while having metabolites of marijuana in their system. Police citations for public consumption skyrocketed in the first year of legalization, but by 2017 fell to about half of that level, and continue to decline.
The economic costs of marijuana legalization are difficult to calculate, but our algorithms have made “educated guesses” and “enhanced probabilities” to suggest that legalization costs $5.50 for every $1 it generates. Naturally, that figure and other groups' calculations showing similar results have received sharp criticism for not differentiating between already-existing use and additional use caused by legalization. Our studies and many others attribute most of the cost to projected lost productivity from more high school dropouts, and increased hospital costs — but state graduation rates are up, and it is not clear how much marijuana caused increases in hospital visits.
Recurring nuisance - ODOR
First disclosed by SP+GTM algorithm in 2012 was the recurring nuisance -- odor complaints -- usually from neighbors of people who are growing too much at home. We suggested including local nuisance ordinance provisions in proposed state bills but was vigorously shot down by pro and con positions alike. In our opinion, odor alone will be a billion dollar cost issue that will affect all cannabis growers who don’t build into their collective systems sufficient compliance to the strictest ordinances to come. At First Jersey Cannabis we are ahead of the noise and built into our business model such contingencies.
Finally, our algorithm continues to flash out a misconception that marijuana is going to pay for everything everybody wants. Indeed, It is provided additional revenue, but no more as a budgetary savior than it is.
Most of our opinions and data gathering has been discounted by the “experts” who have created a “spin” that the cannabis industry is viewed as a savior for humanity. For the moment the “little guy” is blindly investing with absolutely no exit point for success.
From our data -- we don’t know what is going to happen tomorrow, nothing is guaranteed; for now the “half a truth experts” are presenting a great lie. Our data is fallible, and requires constant revisions, but is more actual than a half of truth.
Okay! The sermon is over for the time being. Now for the less than perfect "test-tube" --- Colorado.
Medical marijuana has been legal in Colorado since voters approved it in 2000. In 2012, 55 percent of voters passed Amendment 64, and Colorado became the first state to legalize retail sales to the general public of marijuana in 2014. Customers must show identification to prove they’re 21 or over and may possess up to one ounce at a time. Colorado remains sharply divided over the issue. About 70 municipalities, many in more liberal bigger cities like Denver and Boulder, and tourist and ski towns, welcome marijuana businesses, while nearly 200 smaller municipalities, many in more conservative rural areas, have banned retail pot shops, though they can’t ban possession.
Last year, the state reported that marijuana sales reached $1.5 billion, generating $266 million in state revenue, which has helped to build new schools as well as pay for drug regulation and education. Cities in Colorado may add their own sales tax, which in Denver helped generate an estimated $48 million last year, and helps fund marijuana education and regulation, as well as other expenses.
Despite the federal prohibition on cannabis, ten states now permit recreational use of pot. Those who work in the industry in Colorado generally glow with enthusiasm that comes from being part of a state-legalized subculture and growing business.
At the Native Roots cannabis store near Denver International Airport, salesman Jacob Helton greeted out-of-state visitors and locals with Kaviar cannabis products. He offered $18 joints with 40 percent THC, or, for a more potent high, Moon Rocks, marijuana soaked in hash oil and coated with kief, mighty dust from the plant’s buds.
Many legal marijuana sellers in Colorado like himself, he said, had experience in the black market for years before recreational use was approved, and are relieved to work legally.
“It’s a super cool industry,” he said. “There’s been a lot of job creation. It’s a very regulated industry. I believe Colorado does it right.”
Colorado requires radio frequency identification tags to track each plant, with random inspections to ensure compliance.
A few operators have gotten into serious trouble for flouting the law. Owners of a grow operation and dispensary chain in Colorado, Sweet Leaf, were sentenced this year to prison for “looping,” a multimillion-dollar practice that allows customers to return repeatedly to buy more than the legal limit of pot and then resell it illegally. Denver stripped Sweet Leaf of its growing, processing and sales licenses.
Despite that glaring exception, regulators say most legal cannabis operators are reputable and try to follow the law.
As a reaction to uncertainty over the law, Colorado has launched an advertising campaign to educate tourists and residents alike. Signs posted in pot shops and commercials warn users that smoking is prohibited in public, it’s illegal to take any of the product out of the state, and smoking in one’s car or driving while high remain illegal.
Marijuana smokers at the Tetra Lounge on March 12, 2019, in the RiNo neighborhood of Denver. Tetra is a private club where members can bring their cannabis products to smoke or consume.
In Denver, voters addressed one question by voting in a referendum proposal to allow designated areas where people may consume marijuana. At Tetra Lounge, members must sign up online before entering and pay $20 a day or $50 a month. The club features brick walls and a utility hole cover in the floor, and a rear patio. Guests gather to smoke weed and socialize while listening to Drake and Jay-Z and playing video games or pool. On a recent night, a small group gathered to celebrate a friend’s birthday.
“We strive for progress,” owner Dewayne Benjamin said. “Fifteen years ago, this was the worst part of the city. Nobody would come down here.”
Now, the lounge is part of the trendy RiNO, or River North Art District, leading a citywide boom in construction and gentrification.
Other problems with marijuana use sprung up from users in their own homes.
(1) To get a stronger high, some people began using butane to extract concentrated oil from marijuana, known as butane hash oil, or BHO, which resulted in a rash of fires and explosions, some of which blew out windows and walls and burned their occupants. In response, lawmakers banned BHO extraction except by licensed producer.
(2) When the original law allowed residents to grow up to six plants per person and create large home operations and strong odors in the neighborhood, lawmakers changed the limit to 12 plants total per household.
Learning from Colorado to establish a standard: (1) Limit home growers to five plants per person, (2) Restrict THC potency (which has become much stronger in recent years, especially with concentrates that can be around 90 percent THC), (3) Prohibit public consumption and private lounges ( which would preclude smoking on tour buses), (4) Band butane hash oil except by licensed producers, and (5) Regulate supply and demand.
Regulation of edibles is one of the big lessons learned, referring to the restrictions Colorado added on foods laced with marijuana. Edibles will be the big issue that needs addressing before the federal government nationalizes recreational use. The that have experimented with adult use cannabis must establish a Commission to standard levels of THC and how the ingredient is marketed --- the same way beer has been legislated on a state and federal level. The "Beer Model" would be an excellent starting point.
Law enforcement officials from neighboring states have complained that they are intercepting people who bought pot in Colorado and smuggled it out of the state. Legal challenges, some financed by national anti-marijuana groups, that so far have had limited effect. A group of county sheriffs within the state filed one suit, objecting that the state was violating federal law. Oklahoma and Nebraska sued Colorado over the issue, comparing the state to a drug cartel, but the U.S. Supreme Court ruled against them.
Important Legal Opinion: The marijuana industry dodged a potentially lethal bullet last year when a jury ruled against a racketeering suit to hold growers responsible for property values on neighboring properties.