Colorado’s cannabis industry under attack on several fronts

colorado marijuana

By John Schroyer

On the surface, it might appear that Colorado’s $1 billion marijuana industry has been unencumbered by legal roadblocks or political opposition, given its speedy growth in recent years.

Nothing is further from the truth, however, particularly for the state’s recreational cannabis sector.

Nearly three out of every four municipalities in Colorado have banned recreational marijuana businesses since voters in the state approved adult-use cannabis more than three years ago.

Business owners also continually must confront new regulations and attempts by citizens and local lawmakers to trim the industry’s wings.

In fact, the pushback against the industry has reached new levels in the past few months, creating a highly uncertain climate for cannabis businesses in the state, threatening future growth, and making it difficult for companies to expand or even just plan for the future.

Just last week, for example, Denver City Council members approved strict caps on the number of marijuana retail stores and cultivation sites that can operate inside the Mile High City.

“It’d be nice just to have six months or a year where we don’t have to fear for our lives, but it doesn’t seem to happen in this industry,” said Bob Eschino, owner and founder of Medically Correct, a Denver producer of the popular Incredibles line of infused products.

“We are under attack, and the attacks are getting worse,” he added. “I don’t think people understand that this industry fights for its life every couple of months.”

Effort to ‘Gut’ Rec Industry

To be sure, Colorado’s marijuana industry is thriving.

Medical and recreational cannabis sales hit nearly $1 billion in the state last year, and revenues are on track to rise substantially in 2016 as well.

As of April 1, the state’s recreational marijuana industry boasted 426 retail stores and 530 cultivators, according to the latest data, while its MMJ industry counted 523 dispensaries and 774 licensed growers.

But there are efforts underway – and some that have already succeeded – to reign in future growth and change the landscape.

Perhaps the biggest potential threat this year to Colorado’s marijuana industry, both recreational and medical, is a proposed statewide ballot initiative to ban any marijuana products with a potency of more than 16% THC.

“It literally would gut Amendment 64,” said Mike Elliott, executive director of the Colorado-based trade association the Marijuana Industry Group, referring to the 2012 ballot measure creating the state’s rec industry. “It would probably ban all the concentrates and most of the edibles and most of the flowers that people grow, too. Most of the flower that our industry is growing is above 16% THC.”

It’s not clear yet if the measure stands a chance of making the ballot, however.

There’s no sign the two proponents – a retired high school principal named Ron Castagna and a person named Ali Pruitts – have serious money behind their effort. The initiative’s supporters must submit at least 98,492 signatures to the secretary of state’s office by Aug. 8 to make the ballot.

Smart Colorado, one of the state’s more prominent cannabis industry opponents, hasn’t taken a formal position on the measure, spokeswoman Henny Lasley said Monday. She said the group may or may not become involved in the campaign.

Smart Colorado did, however, support a similar cap that was proposed as an amendment to a bill at the state legislature in March.

“We’re not trying to shut down the marijuana industry,” Lasley said. “What we’re trying to do is raise awareness, specifically around high-potency products.”

Smart Colorado has spent more than $60,000 on lobbying efforts at the state capitol since 2014, according to data on the secretary of state’s website.

Another Potential Ballot Battle

A second, smaller proposed ballot measure in Pueblo County would ban all recreational marijuana businesses.

That would kill 117 existing licensed companies and terminate any possibility of future companies sprouting up.

Tommy Giodone, owner of Colorado Best Budz, a medical and recreational retailer in Pueblo, said the local industry takes the threat seriously and has organized a group opposing it, called Growing Pueblo’s Future.

Giodone described the group as roughly two dozen “of the larger and smaller cannabis companies fighting for our existence, wanting to make sure that we’re heard and understood, that it’s a legitimate business.”

Growing Pueblo’s Future has filed a lawsuit over the initiative in an attempt to force backers to gather more signatures than the county clerk initially deemed necessary for the measure to qualify for the November ballot.

“It’s just people with their moral values that think cannabis is the devil,” Giodone said.

Legislative Fights

At the state capitol, lawmakers have tried several times to roll back the industry.

Industry lobbyists defeated a pair of potency caps similar to the statewide ballot measure proposal, Elliott of the Marijuana Industry Group said.

But other potential regulatory changes are still possible.

For instance, the House approved a bill to prohibit edibles in the shape of animals, humans or fruit in an effort  to make infused products less appealing to kids. The measure is awaiting a vote in the Senate. It’s expected to become law, and it will likely cost many edibles producers plenty of money to retool, if they haven’t already.

“Every time a prohibitionist group wants to put the brakes on something about marijuana, they focus primarily on changing our business models, either making us do something different or creating a new label restriction,” said Dan Anglin, owner of Americanna, a Colorado edibles maker. “All of these things increase our costs, which increases consumer cost.”

While it hasn’t been easy, few entrepreneurs see the future of the state’s cannabis industry as being in doubt. It’s only a question of how much red tape companies will have to deal with.

“It’s tough to know right now how many new opportunities there are going to be. But there are going to be some new avenues,” Elliott said.

John Schroyer can be reached at [email protected]

14 comments on “Colorado’s cannabis industry under attack on several fronts
  1. Layla on

    Hypocrites like Ron and Ali probably wash down a few sleeping pills with whiskey every night then wake up to pop their Prozac and Xanax as they call marijuana the devil. Well God made marijuana and man made booze and pills. The devil is their ignorance.

    Reply
  2. Clifton D Croan on

    All pretty predictable.

    I’ll make another dire prediction about the future of medical cannabis since I have a string of them having come to fruition. (testing requirements, labeling requirements, FDA letters about false claims, dispensary closures, etc.)

    “Practicing medicine without a license” will put many stakeholders in jeopardy and an increased emphasis on physicians licenses being revoked for violations of the Colorado Medical Practice Act- will be the next two areas of increased regulation.

    Why ? Because the medical cannabis industry in Colorado, as elsewhere, has not fulfilled it’s obligation to perform as a legitimate medical industry by meeting minimum standards of care and practice.

    And, I’m FOR the industry. – Clif Croan (Enigami Medical Cannabis, LLC)

    Reply
  3. Nate on

    The level of peoples’ education seems rather low with a discussion about THC percentages coming up. Why isn’t there a board of intellectuals that has the power to throw out stupid initiatives? What a country…

    Reply
  4. Roger Krehl on

    Absolutely astonishing that there are people so adamantly opposed to a market that is so obviously successful. I live in Hawaii and the newly created dispensary legislation is deeply flawed due to the $ attached to the licensing and the restraints on the grow methods. (must be indoor in a county where the electricity costs are the highest in the nation) .38 cents a KWh. The patients will see cost increases in the neighborhood of 200% when the dispensaries finally open for business. The industry is moving forward everywhere in the country, but is still opposed by the die hards. Go figure

    Reply
    • Michelle DeMello on

      I really feel for your efforts in bringing medical MJ to customers. My Opinion and study shows me that it is all about the money! The Gov. wants to control for Big Pharma lobby. I hope when Trump gets in that some regulations will change. Pills kill, and is covered by insurance! How come everything that is good for us that is natural is so expensive and the gov. bands the items because they want control and money from Big Pharma.

      Reply
  5. Victoria Ann Khan on

    why is their money more important than the peoples wishes… BOO! to the principle a his co-hort…

    Reply
  6. ErisX on

    Having lived through the decriminalization and legalization movements of the 60’s and (especially) 70’s I can say with some honesty that we have come a LONG way in a VERY short period of time. There is still a lot of work ahead, and plenty of opposition who won’t just disappear because we’ve passed some laws. But you know it’s worth the effort.

    Reply
  7. che on

    Maybe start saying…”responsible adult use” instead of “recreational use” . That alone could change minds.

    Reply
  8. bongstar420 on

    LOL..who woulda thought that all this prodemocracy garbage from the industy was only under the auspices that it was actually popular.

    Whats lame is these dummies didn’t realize that prohibition is a popular game that most people support in some context regardless of the whether or not a drug is toxic.

    Reply

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