August 20, 2014

The Good, The Bad & the Ugly: The Marijuana Experiment

 

PHOTOS BY ANDRE DAYANI

The Good, The Bad & the Ugly: The Marijuana Experiment

A display of buds and edibles in the grow room at the Lodo Wellness Dispensary in Denver, Colorado. Seeing Colorado’s success, many Californians are asking themselves, “When’s our turn?” But the devil is in the details: the federal government still classifies marijuana as a Schedule 1 drug along with heroin and “Ecstasy” (MDMA), and parents and educators think there needs to be more research on the physical and social effects of marijuana. Just because marijuana is legal does not mean it is safe.

On July 8, marijuana dispensaries, scattered across the state of Washington, opened their doors to the public and began selling legal marijuana to patrons aged 21 and over.

Although local media frenzied, waiting to see if anything could go wrong at the precipice of legal marijuana, the day passed without incident. Even though prices were high, sometimes as much as $30 per gram, customers queued up in hordes, happy to pay for their legal buds.

For many Washingtonians, legal marijuana meant the end of supporting a black market and taboo regime: the substance didn’t have to exist in the grey areas of the law any longer, and the government earns tax revenue.

For many customers, the price was worth it. Meanwhile, after watching Colorado and Washington leap into legal marijuana, some Californians are wondering, “When’s our turn?”

WHAT IS THE MARIJUANA EXPERIMENT?

PHOTOS BY ANDRE DAYANI

The Good, The Bad & the Ugly: The Marijuana Experiment

Grow rooms in marijuana dispensaries are now a common tourist attraction in Colorado dispensaries. Lodo Wellness Dispensary in downtown Denver offers customers tours of their growing facilities, featuring over 100 medical and recreational marijuana plants. Above, a sample of Caviar buds ready for sale.

What is the Marijuana Experiment? Nineteen other states now have enacted their own medical marijuana laws or else decriminalized its use. After California failed to legalize marijuana in 2010, Colorado, two years later, successfully amended its constitution to decriminalize adult possession, cultivation and private marijuana use.

In January of this year, Colorado’s recreational marijuana shops opened for business, selling marijuana to patrons 21 and over.

Despite state law advances, the federal government has yet to decriminalize marijuana. This puts legalization efforts in a muddy legal limbo because federal agencies may close marijuana dispensaries at any time. Federal officials have warned that federal agencies will halt legalization efforts if states fail to properly regulate the substance.

PHOTOS BY ANDRE DAYANI

The Good, The Bad & the Ugly: The Marijuana Experiment

Ripe buds on the plant and ready for harvesting at the Lodo Wellness Dispensary in Denver.

Meanwhile, Colorado might be labeled an early success. During the first week of business, Colorado dispensaries sold more than $5 million dollars’ worth of marijuana. This year, Colorado estimates ­­­marijuana sales to rise to more than $98 million in revenue.

Across Colorado “Pot-Trepenuership” is flourishing. New businesses are abundant and diverse: cannabis cooking classes, art classes (“Cannabis & Canvas”), weed tours (“4/20 Tours”), Marijuana bakeries (“Love’s Oven”), and even Marijuana-supplemented Therapy. The job market likewise benefited as Denver had its first marijuana job fair and more than 1,200 applicants arrived.

“Denver is turning into a Napa Valley, but for weed” explains a new business owner. Popular television personality, Stephen Colbert, may have said it best: “The market has spoken, and the market is tokin’.”

Despite Colorado’s advances, many Californians are still asking themselves, would legal pot work in California? I spent two weeks in the burgeoning Denver market and this is the good, the bad, and the ugly of marijuana legalization.

THE GOOD: TAX REVENUES SKYROCKET

PHOTOS BY ANDRE DAYANI

The Good, The Bad & the Ugly: The Marijuana Experiment

Growers label marijuana plants with identification tags that are used to track the plants progress from seedling to sale. The process is time consuming and costly, but increases accountability of marijuana dispensaries.

Colorado imposes on marijuana a 15 percent excise tax, a 10 percent sales tax, and an additional 2.9 percent local tax. For an eighth of an ounce of marijuana, recreational customers can expect to pay anywhere from $55 to $85. In February, Colorado estimated that the marijuana industry will generate nearly $114 million in tax and fee revenues in the next fiscal year. Based on these projections, Colorado believes that marijuana sales will approach a staggering $1 billion in the next fiscal year (more than $600 million from recreational sales alone).

According to the legalization initiative, the state must use the first $40 million collected from recreational marijuana taxes for school construction.

Notwithstanding, the Governor’s budget office expects $28 million left over this fiscal year and $101 million next fiscal year to spend at its discretion.

The Governor’s office has stressed that much of the initial revenues will reinforce the regulatory system and prepare for the next wave of new business regulation. And as for the remainder, Colorado legislators plan on spreading revenues across Colorado’s infrastructure.

Back at home, we could certainly use that additional cash flow. As of January, California faces more than $350 billion in debt and liabilities. Legalization of marijuana could allow the state to tax recreational marijuana sales at higher rates (medical marijuana is currently taxed at around 7 percent) that, like Colorado, could be allocated towards education, liabilities, and infrastructure.

Furthermore, marijuana decriminalization would lessen financial burdens on law enforcement and the legal system in pursuing marijuana-based offenses.

THE GOOD: REGULATION CONTROL AND ACCOUNTABILITY PROTECTS USERS

Colorado legalized marijuana use in large part to regulate and control the substance that many individuals were using regardless of its legality. Colorado aims to wrestle away control of the industry from black-market sources and provide users a safe, regulated and taxed substance.

Colorado’s Marijuana Enforcement Division (MED), a small entity within Colorado’s Department of Revenue, handles all the details of legalization, such as: lab certifications, food safety testing, and licensing. The agency is a unified regulatory body that provides regulatory consistency and transparency across Colorado.

In contrast, California marijuana regulations are currently piecemeal and unclear. While some cities like Oakland and San Francisco have enacted city-specific regulations governing marijuana sales, other cities like Los Angeles have few regulatory parameters. The result is a chaotic system of unregulated dispensaries that draws sharp attention and action from federal agencies. Without stricter regulation and control, many legislators worry that California is losing vital revenue that could alleviate some of the state’s tenuous infrastructure.

THE BAD: FEDERAL AND STATE LAWS ARE DISHARMONIOUS

As they say, the devil is in the details. Even though Colorado state law permits marijuana consumption, the substance is still illegal under federal law. In fact, the 1970 Controlled Substance Act still classifies marijuana as a Schedule 1 Drug, the most restricted category of drugs that have “no currently acceptable medical use;” the category also includes heroin and MDMA (“ecstasy”). The label is significant because banks treat marijuana sales as black-market sales and are resistant to lend, account for, or even associate with marijuana-affiliated establishments.

Thus dispensaries are operating cash-only transactions that are not only difficult to track but also dangerous to collect. I heard stories of dispensaries disguising cash earnings in fake shipping packages and trash loads.

Banking isn’t the only cause of headaches. Colorado cannot rely on federal agencies like the Food and Drug Administration (FDA) to ensure that marijuana-infused edibles are safe. To resolve the issue, state regulators had to create their own food safety system. But the system is limited and lacks the FDA’s regulatory breadth. Additionally, tracking marijuana sales is complicated. The MED has created a program that tracks all marijuana plants from seed to sale. Its goal is to ensure that marijuana is sold through state-authorized retailers.

Growers must tag plants with identification numbers, register them online, and update the system of the plant’s growth progress and ultimate sale.

The system increases accountability but the tracking system comes at a price by requiring dispensaries report sales data to multiple state and local regulatory locations. The process is inefficient, prone to human error, and costly.

Ultimately, although legalization is lucrative for the state, many dispensaries are struggling to turn a profit because of high regulatory costs.

THE UGLY: OUR COMMUNITIES MUST QUICKLY ADAPT

PHOTOS BY ANDRE DAYANI

The Good, The Bad & the Ugly: The Marijuana Experiment

Fresh buds on the plant at the Lodo Wellness Dispensary in Denver. In a dramatic legal move, Colorado aims to wrestle away control of the industry from black-market sources and provide users a safe, regulated and taxed substance.

Our community must better understand the effects of marijuana. Medical research concerning the substance’s effects is deficient because of federal drug classifications. Without more research on the physical and social effects of marijuana, our communities are ill equipped to properly prepare for legalization.

For instance, some argue that legalization in Colorado removed social barriers that kept some teens from trying marijuana; now, teens might experiment with marijuana at younger ages, interfering with their cognitive development, and potentially increasing teen addiction.

And while it is too early to measure, during my stay in Denver, growing teen use was a hot topic among parents and educators.

If marijuana were legalized in California, parents, like legislators, must act strategically in their rule making. ­Just because marijuana is legal does not mean it is safe. The basic fact remains: for the marijuana experiment to succeed, our communities must adapt to encourage responsible marijuana use.

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