Week in Review: Could Marijuana Business Raids in Colorado Actually Help the Cannabis Industry?

Just Released! Get realistic market forecasts, state-by-state insights and benchmarks with the new 2024 MJBiz Factbook member program, now with quarterly updates. Make informed decisions.

By Chris Walsh

When the headlines scream “raids,” cannabis professionals often respond with a collective gasp and immediately attack the federal government for launching a war on legitimate medical marijuana businesses.

That’s exactly what happened this week when agents executed search and seizure warrants at more than a dozen state-licensed dispensaries, cultivation sites and homes in Colorado.

This reaction is understandable. The government has backtracked on promises to the industry in the past, and many legitimate, professional medical cannabis businesses have been swept up as a result.

But it might not be warranted this time around.

The Department of Justice has gone out of its way to say “unequivocally” that the crackdown was consistent with new marijuana enforcement guidelines the DOJ released in August (some of the businesses could even be linked to a jewel theft kingpin in Florida).

If true, this could actually be good for the industry.

Here’s why:

– It will help level the playing field. Upstanding dispensaries in Colorado have long complained that they are at a disadvantage to some of their less-professional peers who take shortcuts and bypass state rules and regulations. The raids could help weed out some of them, helping to ensure everyone is playing by the same rules.

– It shows that the government is actually enforcing the laws. This is crucial to continuing the marijuana industry’s march across the country. While the initial PR surrounding raids is negative (“see, we told you that marijuana businesses cannot be trusted!”), enforcement is actually a healthy and necessary part of every heavily regulated industry. In the long run, lawmakers and the public are much more likely to support medical and recreational marijuana if they think related laws are actually being enforced.

– It makes the 1,300-plus MMJ operations that didn’t get raided look even better and hopefully helps reinforce the validity of their business practices.

– It keeps the industry on its toes. Many MMJ business owners in more stable markets (like Colorado, until now) admit that they’ve been lulled into a false sense of security. But federal actions force owners to redouble efforts to adhere to regulations, follow best practices and put a good face on the industry. And they help owners avoid complacency and the desire to skirt the rules.

, Week in Review: Could Marijuana Business Raids in Colorado Actually Help the Cannabis Industry?The key question is whether the government really did target businesses violating state laws or the DOJ’s new guidelines on marijuana enforcement. It’s hard to completely trust the official statements without specific details.

But consider this: There are more than 500 licensed dispensaries, 700 cultivation sites and 100 infused-products manufacturers in Colorado.

To assume each and every one is complying with the state’s medical marijuana regulations – let alone that they are all reputable businesses that would never, ever cheat on their taxes, knowingly sell to drug traffickers and minors, or intentionally divert cannabis to other states – is a big stretch.

There are bad apples in every industry, and the medical marijuana business has more than its fair share.

That’s not to say all of this week’s raids are justified, or that all of the targeted businesses are guilty. In fact, some fully legit dispensaries sharing cultivation warehouse space with the government’s intended targets might have lost their entire crop, as agents typically seize all plants in a specific facility regardless of ownership.

But it’s certainly plausible that most or all of the targeted businesses are indeed engaged in practices that raise huge red flags.

If that’s the case, the industry might want to applaud the feds, not vilify them.

Top stories in Marijuana Business Daily this week:

Q&A With Steep Hill CEO: Testing Market Could Hit $40M By 2016

4 Tips for Expanding Edibles, Infused Products Business Nationally

100 MA License Applicants Make Deadline

1st Recreational Cannabis License in US Awarded

GrowLife Gets $40M Funding Commitment

Cigarette Companies to Become ‘Budweiser’ of Marijuana?

New Mexico Cultivating Just 20% of Demand