Why Colorado's Marijuana Makers Are at a Loss

By Dirk Hanson 04/12/11

Yes, Colorado's growing pot boom has been very, very lucrative to some people. Alas, most of them live nowhere near Colorado.

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Are Colorado's farmers going to pot?
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High Times editor Dan Skye and members of his staff were so impressed with Denver’s massively-attended "Medical Cannabis Cup Contest" last week, that they excitedly endorsed Colorado as the new capitol of the marijuana movement. “It’s a state where I think the activists really have control,” Skye said. Not to mention a state that reportedly produces righteous weed as good as anything coming out of California or Amsterdam. Medical marijuana sales across the U.S. have become a $1.7 billion business these days, with sales growing dramatically every week. So you'd think Colorados's marijuana makers would all be driving around in their tricked-out new Mercedes. Alas, that's not the case.

In fact, local pot producers have been loudly complaining that several new laws imposed by the state legislature have taken a big bite out of their profits, including one that imposes licensing fees as high as $18,000, and another that mandates a year-long moratorium on new dispensaries. Since last year, marijuana shops have been required to personally grow 70% of the product they sell. And, most cruelly for out-of-state entrepreneurs, anyone who owns a pot shop must have lived in the state for at least two years—although a grandfather clause in the bill allows current out-of-state owners to keep trucking. “Still, somebody is surely enjoying a financial windfall thanks to the marijuana boom," Colorado news outlet Westword reports—"and the smart money would be on entrepreneurs from out of state.” Yes, the Colorado pot boom has been very lucrative for some people. But with local Coloradans stymied by state laws, the real winners are high-flying investors who live in California and Texas.

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Dirk Hanson, MA, is a freelance science writer and the author of The Chemical Carousel: What Science Tells Us About Beating Addiction. He is also the author of The New Alchemists: Silicon Valley and the Microelectronics Revolution. He has worked as a business and science reporter for numerous magazines and trade publications including Wired, Scientific American, The Dana Foundation and more. He currently edits the Addiction Inbox blog. Email: [email protected]