Anyone in the state of Colorado who needs a marijuana fix today only needs to walk down to the corner recreational marijuana store for an ounce. You don’t need to prove that you have a medical necessity to buy the substance. Recreational marijuana use has been legal in the since the start of the year. Experts estimate tax revenues from recreational marijuana for the state could touch half a billion each year before long. It will be the state’s number one tax earner. Even better, the state will save hundreds of millions in prohibition enforcement costs.
With new laws legalizing the use and sale of marijuana for recreational purposes, many pot dispensaries that previously sold to medical users have applied for recreational sale licenses and opened their doors to casual users. It is a very lucrative business for them.
Should you get in on this business?
The licensing process in Colorado is extremely rigorous. To begin, at this time, you need to already have a running medical marijuana outlet in good standing with the authorities to even apply. When you do apply to convert your existing dispensary to a recreational marijuana store by paying around $20,000 in application fees and license fees, you are granted a public hearing in which you are expected to prove to the judge of that you have what it takes to comply with all the extraordinarily intrusive regulatory controls in place. You also need to prove that your pot store doesn’t make your neighborhood less safe.
Once you pass the hearing, you need to wait for the inspections (all five of them), apply for a state license and then a city license.
If you want to set up a new recreational marijuana outlet from scratch (without a medical marijuana outlet to start you off), it won’t be easy. The state won’t accept even accept new license applications for two more years.
Going through the entire approvals process is the easy part. When you do gain approval, you need to be ready for what it takes to run a marijuana outlet.
You might as well be running a plutonium refining facility
Since alcohol and tobacco are legal, any consumer can buy and take home all he wants. Stores selling these items don’t need to account for every last cigarette sold or every fluid ounce of alcohol that goes out the door. With recreational marijuana, though, the fact that sales are legal doesn’t mean that anyone can buy pretty much anything.
At this time, consumers are only allowed an ounce in one transaction. These are very small amounts. Yet, the authorities are strict about enforcing full accounting for every last particle of marijuana dust produced, sold and disposed of. If you want to be part of the recreational marijuana business, you’ll have to submit to these obsessive standards and controls. Recreational marijuana isn’t a business for the easy-going.
These kinds of regulations in place will scare most entrepreneurs off
The state of Colorado has an online inventory tracking system in place to keep track of all the marijuana produced, in a seed-to-sale program. Every retail marijuana business needs to be a part of the system.
Until October 2014, recreational marijuana outlets will need to grow nearly all the plants that they sell. Every place that a marijuana business grows, transports, stocks or sells marijuana will need to be under electronic surveillance. Salespeople must make sure that every customer is clearly visible to the camera (Amendment 64 makes sure that they won’t need to keep a list of marijuana buyers).
The state’s marijuana inspectors can come in and demand information on any part of the operation at any time. They need you to keep track of every leaf on every plant by using marijuana growing software. If a single leaf goes missing at any point, the retailer business could be shut down for it. With each leaf passing through 25 to 30 employees before it is sold, the owner of the business will need to be vigilant.
You need to make sure that you are right for the marijuana business
While marijuana has a reputation as a substance for the easygoing, the business side requires such meticulous care and attention to detail that it is probably only a good idea for entrepreneurs who thrive on extreme discipline. If you do manage to submit to all the requirements of the law, recreational marijuana is profitable business.