A decade of legal cannabis in Colorado

· Jan. 1, 2024, 4:00 am
cannabis-mastercard-debit-cards-livwell-20230811cannabis-mastercard-debit-cards-livwell-20230811Hart Van Denburg/CPR News
Budtender Matt Sepulveda speaks with customers at the LivWell Dispensary on Belleview Avenue in the Denver Tech Center, Friday, August 11, 2023. A decade after legalization, dispensaries still struggle with banking challenges because the drug is still illegal under federal law.

A decade ago, it was hard to see the future through the haze.

Christian Sederberg, who campaigned for the legalization of cannabis for recreational use, recalled driving around Denver that first day checking on the stores that were open. The lines were long and the weather was cold with snow flurries. 

“But people were in great spirits, and people were singing songs and playing music and yeah, it's hard to believe it's been 10 years, but man, what a wonderful day that was,” Sederberg said.

Across town that day at Colorado Harvest Company on Broadway customers had been lined up since two o’clock in the morning, despite the weather. Owner Tim Cullen said the lines were long and it was hard to move people fast enough, he heard some people grumbling about the wait.

An older man standing nearby in line put it in perspective.

“He turns around and he says, ‘Hey man, I don't care if we wait three hours. I have been waiting for 62 years for this to happen, and here it is,” Cullen said.

On Jan. 1, 2014, dozens of reporters crowded into a dispensary in the RINO neighborhood in Denver to witness the first legal sale of marijuana for recreational use in the United States.

There were so many people in the small space that the “first sale” was done twice to accommodate all the cameras.

“I think there was almost a physical altercation between a couple of guys holding cameras,” Sederberg recalled. “There was 60 or 70 different outlets from around the world there. It was wild.”

After that, it got wilder.

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Ten years of economic impact

In the decade since those first stores opened to the public, Colorado has sold $11.7 billion in cannabis from hundreds of stores across the state. That’s the equivalent in ounces and edibles of a little more than 3.7 billion one-gram joints sold at today’s (pre-tax) price of $3.15 a piece. Laid end-to-end, those 1.25-inch joints could circle the globe at the equator nearly three times. 

Those sales have brought in $2.4 billion in taxes, funding everything from new schools and school repairs in the rural part of the state to rec centers in the cities.

At the same time, widespread cannabis access has neither been the unstoppable economic force some of its most ardent backers expected, nor has it been the end of polite society in Colorado, as forecast by some critics.

Instead, the scent of burning marijuana has become present, if not commonplace, in the state’s urban centers. Non-traditional harvesting jobs have become desirable in some rural parts of the state. And words like “budtender” (your local dispensary expert) or “looping” (cheating on sales limits by revisiting the dispensary) have become part of the lexicon.

cannabis-dispensary-livwell-20230811Hart Van Denburg/CPR News
Retail shelves at a LivWell cannabis dispensary in metro Denver.

Initial joy and remaining questions

“Hey man, I don't care if we wait three hours. I have been waiting for 62 years for this to happen, and here it is.”

— An older man lined up for Colorado Dispensaries' opening day, Jan. 1, 2014

But for all those gaudy statistics and expressions of joy, legalization continues to raise vexing questions. Banking access has improved, but the federal prohibition of the drug still makes access to capital difficult for the industry and remains a pain in the neck for dispensaries and patrons. Legalization has also failed to settle longstanding debates about youth usage and whether it can be a gateway to harder drugs like opioids. 

210409-CANNABIS-POTENCY-ROLLUP-DISPENSARYHart Van Denburg/CPR News
Jawaun McFly weighs out product at the counter of the Rollup Dispensary on Washington Street in Denver on Friday, April 9, 2021. The retailer sells lotions, creams, and transdermal patches in CBD, CBN, THC form, as well as edibles, concentrates and flowers, and manufactures shatter, wax and Co2 hash. 

How cannabis legalization has affected Colorado's youth

Even though Colorado was the first state to legalize marijuana it divided the political establishment at the time. Then-Gov. John Hickenlooper, a Democrat, opposed legalization. 

“I was worried about the downsides that were widely predicted by experts, that this would lead to a dramatic increase in experimentation and consumption and frequency by young people,” he said at a gathering in Denver in August. 

Hickenlooper, who is now a U.S. Senator, has changed his perspective, acknowledging that it didn’t lead to a huge surge in use for young people.  

“In many cases we're probably better off with more marijuana consumption, probably less alcohol consumption, because they do seem to be related somewhat, and certainly we're not any worse off,” he said. 

“That's probably the better way to say it, with people smoking pot as part of their relaxation or kickback process. We're not any worse off when people have a drink or two.”

While marijuana usage has risen significantly in Colorado, rates of marijuana use among adolescents actually fell since recreational legalization, according to federal surveys of “use in past year.” Self-reported rates among 12 to 17 year-olds dropped from 20.8 percent when recreational sales started to 17.5 percent in the most recent preliminary data. Youth marijuana use in Colorado, though, is still much higher than for the rest of the U.S. 

There’s some evidence linking youth use with an increased risk of later onset of psychosis, and youth access to highly potent products has been a focus of state lawmakers in recent years. These concentrates like hash oils and waxes can be upwards of 80 percent THC, the main psychoactive component in marijuana. 

Dawn Reinfeld, who heads the Boulder based group Blue Rising, has lobbied for stricter labeling and tracking and purchasing limits in efforts to reduce youth access to highly potent THC. 

“Are they really thinking that a dab at 95 percent potency in birthday cake flavor has very little or low potential for physical, psychological dependence? It's just not real.”

She’s concerned that in the decade since legalization, state and federal authorities don’t fully account for the negative impacts. She opposed the recommendation from federal health officials in the summer of 2023 to reclassify marijuana as a less dangerous drug.

“I would feel more comfortable if it felt like they were actually listening to parents and communities and not the marijuana industry, which we know has been lobbying them so hard for a decade,” she said. 

Colorado lawmakers in both political parties and the leading cannabis industry organizations found common ground on creating more stringent rules for medical marijuana cards for 18-20 year olds and tightening the daily purchase limit. 

“Just keeping focused on keeping out of the hands of kids,” Sederberg said. He works as an advisor to the industry now. “Educating people about driving, public safety, public health, that's what we keep beating the drum on. And I think it's been a success so far.”

Some in the industry attribute the drop in youth use to the stringent identification requirements for buyers in Colorado. Putting the license in jeopardy is not worth the sale, according to the businesses. A cannabis business license has become incredibly valuable, as many cities have caps on new licenses.

“I bet there's an undercover officer who tries to make a sale with underage ID in one of our establishments monthly,” Cullen said. “It's nonstop. And that has been important to keep people on their toes.”

cannabis-mastercard-debit-cards-livwell-20230811Hart Van Denburg/CPR News
An ATM at the LivWell Dispensary on Belleview Avenue in the Denver Tech Center, Friday, August 11, 2023. Mastercard is banning the use of its debit cards to purchase cannabis-related products.

Ongoing challenges posed by federal law

This is only one of the considerable headaches of running a cannabis business, even 10 years later, mostly because it remains federally illegal.

Because marijuana is listed as among the most dangerous drugs, businesses cannot access federal tax breaks available to any other industry. Interstate commerce is restricted, meaning states aren’t able to move product freely across borders. 

The lack of full scale banking and finance keeps capital out of the industry — there are small and large marijuana businesses that would like to sell, but there’s little financing available. Without federal legalization, many corporate name brands have stayed away from the industry for now.

There are no federal bankruptcy protections either, and that has become a larger issue as the marijuana industry has entered its first downturn. Sales rose sharply during the pandemic and new businesses started, but as sales have dropped many of those new enterprises have suffered.

Some investors will lose money, and businesses will fold. No one forced them into the business, though, and many cannabis entrepreneurs are still getting rich, especially those that got in on the ground floor, ran conservative growth plans, and have ideal locations. 

Part of the pitch of marijuana legalization was not just to make money, but to address some of the social injustices of a criminal conviction related to marijuana.

Criminal marijuana possession arrests dropped 71 percent from 2012 to 2019, according to a report from the Colorado Department of Public Safety. Juvenile case filings fell by only one percent since legalization — it’s still illegal to possess any amount of recreational marijuana for people under the age of 21. 

While advocates praise the decline of marijuana prosecutions, the racial disparity remains for the arrests that do occur. The marijuana arrest rate for Blacks was more than double that for whites in Colorado. “This disparity has not changed in any meaningful way since legalization,” reads the state report.

Still, it’s clear that cannabis is not quite counterculture anymore. The days when Colorado was all alone selling a product are long gone.

“So fast forward 10 years and you have almost half the country with some form of recreational legalization,” Cullen, who owns Colorado Harvest Company, said. “Almost the entire country has some form of medical. CBD has swept the country as well. It is a vastly different landscape than where we were 10 years ago.”

“The sky did not fall.”

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