Demand has Colorado pot shops running low, cities eyeing tax revenue

The Gazette (Colorado Springs, Colo.)January 8, 2014 

Denver’s 3D Cannabis Center owner Toni Fox thought she had enough marijuana to last through February when she opened her doors Jan. 1 for recreational pot sales.

Then she served 450 customers Jan. 1 and turned away 60. She planned to close Monday and Tuesday, she said, to re-evaluate her supply.

She had been serving 25 clients a day for the past three years while her store was restricted to medical marijuana sales, she said.

“We are going to run out,” she predicted last week on the second day of legal marijuana sales for recreational use. “It’s insane.”

Fox said she had a harvest ready to be trimmed. And she will hire temporary staffers from Hemp Temps, a Denver-based staffing company that specializes in growing, trimming and bud-tending.

But she guessed the supply shortage is the same story at all of Denver’s 18 stores and Pueblo’s two stores that opened last week with long lines of customers — more than half from out of the state — waiting one or two hours to make history by ending marijuana prohibition in the state.

Now, she said, marijuana store owners will all be scrambling to find wholesale distributors, especially on marijuana-infused products such as edibles and beverages. But she’s not complaining.

“It’s awesome,” she said. “I wish more stores could have opened.”

News of people traveling across state lines to purchase pot prompted the Wyoming Highway Patrol to issue a release with a stern warning: “Don’t bring your Colorado-purchased marijuana into Wyoming.”

The release reminded readers that possession of an ounce or less carries a punishment of 12 months’ imprisonment and a $1,000 fine.

Under Colorado’s Amendment 64, people 21 and older can possess up to an ounce of pot. And last legislative session, lawmakers hammered out the details of marijuana regulation that covered everything from packaging and labeling to background checks for business owners and a complex licensing process.

The National Cannabis Industry is projecting $400 million in sales in 2014.

Not all Colorado cities are taking part in the rush. The Colorado Springs City Council voted 5-4 in July to opt out of sales, despite the city’s voters approving Amendment 64.

There is no telling how much Colorado Springs is losing in sales tax revenue from pot sales for recreational use, said Tom Binnings, an economist with Colorado Springs-based Summit Economics.

“It’s a challenge for an economist to study any new market that has not existed before,” Binnings said. “It’s a wonderful market experiment. It will provide interesting data for researchers in the future to look at what happens when a market that is illegal becomes legal.”

Colorado Springs City Council member Val Snider said he might reconsider his “no” vote on retail sales once he sees the long-term effects of recreational marijuana sales. Snider was the surprise swing vote that denied sales in Colorado Springs.

Denver store owners estimated that at least 50 percent of the Jan. 1 sales went to out-of-state buyers. Those are the precious tourism dollars Colorado Springs always is pining for, he said.

Colorado Springs has about 80 medical marijuana dispensaries, and in 2012 the city collected $989,351 in sales and use tax on medical marijuana — about a 40 percent increase over 2011.

Manitou Springs Mayor Marc Snyder said the Manitou City Council is paying close attention to Denver and Pueblo. The council was to get its first glimpse of a proposed ordinance Tuesday, the day two new council members who favor retail marijuana sales in Manitou will be sworn in. The city could be ready to accept applications Jan. 26, Snyder said.

Council will use its “conditional use permit” process, which will allow more control over the store operations, Snyder said. The first store could be open by spring.

“If they are not compliant with any of the conditions, we bring them right in for an immediate hearing and say, ‘What’s going on?’” Snyder said.

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