The Colorado retail marijuana industry is opening its doors to all applicants on Tuesday in a sweeping transformation of the policies that monitor Colorado’s legal marijuana market. Previously, only established entrepreneurs of the medical industry could have applied for a recreational license.
Additionally, marijuana businesses were at first required to offer a general swath of marijuana services, and any weed sold must have been grown by the store itself. Starting this month, however, marijuana businesses are allowed to specialize in specific avenues of the industry — this means that soon there will be businesses in Colorado dedicated purely to cannabis cultivation, or perhaps businesses that focus on marijuana-infused edibles, or even 100% retail businesses that don’t actually produce any product.
Though ambitious individuals from outside the medical industry can now legally attempt a foray into the retail marijuana market, applicants are still required to be Colorado citizens.
The new businesses are expected to open sometime in October, but experts are unsure what effect these changes will have on Colorado’s retail market. “We are going into uncharted territory,” explains Sam Kamin, a University of Denver law professor. Kamin has been following Colorado’s recreational marijuana industry since it went legal at the beginning of this year. “It’s something that hasn’t happened in medical, and it hasn’t happened in recreational,” he said.
As of mid-June, nearly 300 individuals had expressed interest in applying for a license this month. The ratio of applicants hoping to start up retail locations vs. cultivation-only businesses remains unknown. Also, hopeful individuals who actually follow through with their applications are going to face zoning laws and local moratoriums across the state, which may hinder some fledgling marijuana businesses.
“It’s tough to know how many people are really going to apply,” said Mike Elliott, executive director of the Marijuana Industry Group. “Running a marijuana business is much, much more difficult than it might initially appear.”
In the first four months of legalization, Colorado raised more than $200 million in marijuana sales. Two thirds of that revenue, however, is linked to the still-thriving medical industry. By those numbers, the recreational market is actually seeing less demand than was originally expected, which means that the latest applicants for retail licenses might face trouble finding a sufficient customer base to justify their business investments.
Between that bit of discouraging statistics, the strict zoning laws and moratoriums of many Colorado cities, and the dramatic head start that medical-based retail stores got in January, new cannabis industry entrepreneurs in Colorado have their work cut out for them. “Right now,” Elliott said, “we don’t really know what the market can bear.”
Meanwhile, retail stores in Washington State are scheduled to open their doors in one week’s time. Washington’s market is different from Colorado’s in that it was designed from the very beginning to allow specialization among industry members. Producer and processor licenses were issued months ago, meaning the state’s first crop of recreational marijuana is set to unveil during the July 8 grand opening.
Photo Credit: Brett Levin