Denver is strangling its own marijuana industry by limiting new dispensaries

Denver is strangling its own marijuana industry by limiting new dispensaries

VicesApril 27, 2016 By Isabelle Kohn

When the marijuana industry reported nearly $1 billion in sales last year, $135 million of which went right back into Colorado's economy, it seemed like the sky was the limit for weed business.

However, for some hardly understandable reason, Denver just voted to set a cap on the state's marijuana market, mandating that no new recreational or medical dispensaries will be allowed to open. The cap is meant to constrain expansion in Colorado's largest market and dramatically limit new businesses, while simultaneously providing protections for saturated markets.

Existing dispensaries are likely to be unaffected, however their license renewal process will probably become even more difficult than it already is. 

The changes, which won approval by a narrow margin of 7-5 City Council votes, will freeze the current status quo, meaning Denver's 421 MMJ industry locations — 211 grows, 147 stores and 63 with both — will not see any new competition, as the changes are permanent.

In a merciful twist, the proposal will allow pending license applications to go through before the caps are set, which could add as many as 45 new grows or dispensaries ... although the bill also requires that 15 Denver grows should be shut down as well. Because that makes sense.

Supporters of the cap say it'll help neighborhoods and pot businesses "find the right balance" between each of their needs.

“Caps are a way of at least giving the city and the industry time to really figure out what is responsible growth,” said Michael Elliott, executive director of Colorado’s Marijuana Industry Group.

Tyler Henson, president of the Colorado Cannabis Chamber of Commerce, disagrees entirely, and we think rightfully so. He's called the caps “an assault on businesses here,” adding in a testimony that “Denver should be embracing this new economy instead of prohibiting it.” Excellent point.

... The fuck, Denver? We've about had it with your wishy-washy marijuana regulations. On the one hand, Denver champions the weed industry's revitalization of communities in need and how well it saturates the economy with tax revenue. But somehow, that's no longer a good thing?

What do you want, Denver? Do you want legal marijuana or not? Why legalize something, then make it progressively more and more illegal as time goes on in spite of the fact that legalization has reaped overwhelmingly positive benefits?

It's vital that we maintain competition between dispensaries in Denver, and the rest of Colorado, because it keeps businesses honest and product quality high. If no new dispensaries are allowed to open, there's not much stopping existing dispensaries from raising prices and sacrificing quality for efficient output. From their perspective then, the caps are a great idea. But for the consumer? Not so much.

Plus, the more avenues people have for legal marijuana, the less they rely on the black market. In the presence of a dispensary limit, the black market has more opportunities to flourish by offering competitive prices and easier access.

But perhaps the biggest flub of this new dispensary cap is its economic effects.

ArcView projected earlier this year that if legal weed sales continued at the rate they were, they'd grow by approximately 30 percent every year, meaning that by 2020, the marijuana industry could be bringing in $22 billion in annual revenue. That's about three times more profit than the NFL brings in per year. Profit that would necessarily go towards improving schools and local communities.

Does Denver's City Council just really hate money or something?

We get that family neighborhoods and areas with schools shouldn't be inundated with dispensaries and marijuana grows, and that these things should be kept at a safe distance from vulnerable populations. But as Denver expands, and it's currently expanding at nuclear rates, it doesn't seem that difficult to keep weed business away from certain populations. If that's the issue, why not mandate that new dispensaries must open in certain areas, instead of prohibiting them from opening at all? There are plenty of dispensaries and grows located in warehouse districts, far away from children.

Ironically, there is currently no cap on how many liquor stores can open around these populations, or open at all. Currently in Denver, a liquor store can open anywhere it pleases, at any time, despite the fact that it's arguably easier for kids to buy liquor than it is to but pot at a dispensary considering the buffed up security most dispensaries have.

If you ask us, this marijuana industry cap is asphyxiating. It seems like there could have been a much more middle-of-the-line solution that better met the needs of both businesses and neighborhoods, but then again ... Denver's current weed policies rarely make sense. Cough, public consumption, cough ...

Oh well. Here's to hoping that the surrounding cities are able to pick up the slack and rake in some extra dough.

Photo cred: AP Photo/The Gazette, Jerilee Bennett