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Op-Ed

Interim Results From an Investigation of Marijuana

April 27, 2018

Like any nearly normal adult who’d move to Denver, I wondered about the pot shops. I didn’t wonder about the marijuana per se (a Latin maxim, usually translated as “Don’t tell Mom”). I wondered about the stores themselves. I wanted to go shopping. So I strolled up South Broadway.

Robert Kahn

By Robert Kahn

Deputy editor emeritus, Courthouse News

Like any nearly normal adult who’d move to Denver, I wondered about the pot shops. I didn’t wonder about the marijuana per se (a Latin maxim, usually translated as “Don’t tell Mom”). I wondered about the stores themselves. I wanted to go shopping. So I strolled up South Broadway.

In the first mile I counted 19 dispensaries, and I’m sure I missed some. That’s a pot shop every 277 feet — less than a football field. So if smoking pot were like playing football, and you got tackled and lost your marijuana on Broadway, you wouldn’t have to run to the goal line to get you some more. You’d only have to make it to the 8-yard line.

There are 4½ times as many pot shops as Starbucks in Denver (364 to 80), according to marijuana tour websites. And more than twice as many marijuana dispensaries statewide (1,021) as Starbucks and Walmarts combined (322 + 106).

Is this good or bad?

Well, the 10 percent tax on marijuana sales has brought more money to the state treasury than taxes on tobacco for the past two years: $194 million to $149 million in 2016, and $247 million to $136 million last calendar year. And marijuana tax income is growing steadily — nearly quadrupling in four years, while income from tobacco taxes has declined slightly.

Colorado devotes its first $40 million in marijuana taxes each year to public schools. But pot taxes devote considerably more than that to education. In fiscal year 2016-17, marijuana taxes sent $71.6 million to Colorado public schools. That’s $83.81 for each of the 854,265 children in Colorado schools: enough to pay for their textbooks, I can assure you, from my nine years as a public high school teacher and the shelf life of an average textbook.

Marijuana taxes, by law, must be spent on public education and other, undefined state projects. But taxes are only a fraction of marijuana’s economic impact. Retail sales on recreational pot from legalization day, Jan. 1, 2014, through November 2017, came to $4.4 billion.

That’s a lot of downstream money for salaries, insurance, advertising, tourism and other “multipliers.” Numerous economic studies have pegged the economic multiplier of construction projects at 10 to 1: that is, a $1 billion construction project yields as much as $10 billion in economic activity, what with workers’ spending on food, rents, local taxes, consumer purchases and so on.

I have no idea what the economic multiplier is for legal marijuana sales. I am not aware of any studies on it. It’s worth study. But surely the multiplier is more than 1:1. So fiscally, marijuana taxes are a no-brainer. But what are the stores like?

Well, there’s all kinds. The ones I visited were scrupulously clean, and well aware of their legal and regulatory obligations.

They check your ID at the door. Sometimes they confiscate it until you leave.

Many require cash payment. A longtime store manager told me that’s because banks won’t deal with pot shops unless the dispensary has had an unblemished cash account for five years. And recreational sales began in 2014, so the only dispensaries that can accept charge cards today must have been in business under a medical license before 2014.

This manager has nine years in the business, having managed a medical pot shop before recreational sales were legalized.

So, how’s business?

“Not very good,” he said. “We’re doing better than some of the other states, but they gave out too many licenses.”

The pot shops are inspected regularly.

“If I put this jar on the floor,” he said, hefting a jar of Panama Kush, “and an inspector comes in, that’s a $3,000 fine.” He pointed to a near wall: “If that fire extinguisher is expired, that’s a $3,000 fine. They inspect the hell out of us.”

He had no objections to that. He wants to keep it a clean business.

Panama Kush was going for $41 for an eighth that day — 1/8 oz., or 3.5 grams.

That comes to $328 an ounce — what we used to call: excuse me, what some people used to call — a lid, back in the sixties. When it went for $20.

True it is that the product has improved since then. So I am told.

At another pot shop up the road, I asked to see a couple of strains.

Granddaddy Purps — 100% Indica: 22.8% THC — was going for $31 an eighth. The label on each little black plastic jar included the store’s address, sales license number, cultivation license number, batch number and possible contaminants, which included “bat and seabird guano and worm casting.”

I found that charming.

Good for you, Colorado pot stores! Who knows what’s in our beer?

At another store not far up the line, a young woman tamped powdered flowers into cylinders — making pre-rolls, which go for $5 to $8 a pop. She was happy in her job.

“I can’t believe I’m working in a legal pot shop,” she said. She’d been working in the business since it was legalized, four years and a few months ago. She’s done all of the legal pot jobs: growing, clipping, and now she was a budtender.

She looked like she was working in a dental office: tamping the crumbled flowers into little cones with a chopstick. She could not lick down a joint and sell it, for health reasons, and she preferred not to.

At the next store they wouldn’t let me into the real back room. After signing in and being called, I was admitted to a bathroom-size back room, with a list of products and prices on a whiteboard. The salesman stood in another small room to the left, behind bulletproof plastic. That place was a drag. I got out of there.

The pot shop across the street looked like a dental office: institutional furniture and institutional shrugs. An elderly gentleman eating lunch at the front desk refused to answer questions because he was on break. I got out of there.

An old friend from Chicago, a news editor, just visited Denver, and like any good newsy would do, he took a tour of the stores.

“I thought they would be kind of seedy before I went into one,” he wrote me. “It’s actually a pleasant shopping experience.

“Give me brick and mortar! Down with Amazon!”

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