In 2010, the tiny town of Nederland, Colorado, (population: 1,400) had roughly one dispensary per 100 residents, leading Rolling Stone to dub it Stonerville, U.S.A. Others referred to it as the Wild West of medical marijuana.
Over the past year, however, a large number of medical marijuana dispensaries in Nederland have shut down, buried by an avalanche of new state regulations. The number of dispensaries has shriveled from around 14 to just three now, a 78 percent plunge.
Many (former) dispensary owners are up in arms over the rules, which involve hefty fees and a bevy or restrictions. One guy who was forced to close his MMC even said that the regulations amount to a “power grab” by the state.
The situation in Nederland underscores the continuously changing nature of the medical marijuana industry. To truly succeed in this business, you need to be able to respond to unexpected developments in terms of costs and regulations. Most dispensaries in Nederland weren’t flexible enough to adapt to these changes, leaving them with no other choice but to shut down. Some simply didn’t have enough money to pay for expensive upgrades, others didn’t react quickly enough. The ones that succeeded had anticipated the changes before they actually occurred, allowing them to get a head start vs. the competition.
Fair or not, this is the reality of the medical marijuana business, and those who cannot embrace (or least respond to) change need not apply. Anyone operating in this industry – regardless of the state they do business in – should understand that the regulatory and legal environment will remain volatile for years to come.