Colorado is on the cusp of another green rush as the state prepares to lift a two-year dispensary moratorium, allowing a new wave of entrepreneurs to apply for state licenses to operate medical marijuana centers.
The move is both positive and negative for the Colorado MMJ industry. While it lowers the barriers to entry, allows more individuals to open dispensaries and creates new opportunities for investors, it also ushers in a new era of competition for existing marijuana centers – many of which are still struggling to make a profit.
Regardless, the end of the moratorium is largely seen as a positive development for the MMJ industry in Colorado. Lawyers, consultants and other types of MMJ companies are now reaching out to potential applicants, offering to help them navigate the complex process of applying for and running a dispensary.
In Colorado Springs, for example, the MMJ Business Academy is hosting one-day business classes focused on how to open a medical marijuana center in the state. The seminars explore everything from regulations and the application process to what makes dispensaries successful and inventory, tracking and tax issues. Led by MMJ lawyer Charles T. Houghton and KC Stark, who has started and sold several MMJ businesses, the seminars cost $299.
The moratorium on dispensary business licenses – implemented in the summer of 2010 and extended for a year – is set to expire July 1. During the past two years, only individuals who applied before the moratorium could go through the application process. Current dispensary owners have therefore operated in a somewhat protected market. Not that it did much good: Many experts feel the market was already saturated, and new state regulations implemented last year led to a host of new costs for dispensaries. So it isn’t like existing centers are raking in the money. Now they’ll have to compete against a new crop of players.
But the barriers to entry remain high. It can cost at least $100,000 – and often much more – to open a basic dispensary, and the regulatory requirements are daunting. And then there’s the fact that medical marijuana is still illegal federally, creating a huge set of risks.