Caption +

The latest economic impact report was conducted for 2015 and released last year by the Marijuana Policy Group. At the time, the industry had a $2.39 billion economic impact on Colorado, when considering direct and ancillary businesses, and created about 18,005 jobs - all which equal clout at the state capitol. (The Gazette file)

Show MoreShow Less

Outside a committee room in the Colorado Capitol a few weeks ago, about a dozen lobbyists chattered about marijuana consumption and delivery.

Inside the room, the largest of the spaces afforded for legislative hearings, at least another dozen cannabis lobbyists listened to the proceedings. They were basking in pro-marijuana support from a seemingly unlikely source, a conservative lawmaker from the suburbs of Fort Collins.

“We’ve got to care about those people, and we have to let them know that they’re accepted and that they are valued members of our society,” Republican Sen. Vicki Marble said of marijuana consumers.

She was speaking in support of a bill she sponsored, which would have allowed for marijuana consumption clubs, where consumers could purchase and consume marijuana on site. Marble introduced the bill because tourists and people who can’t smoke where they live have no place to smoke cannabis.

The bill, which some feared would have made Denver the Amsterdam of the Rockies, didn’t pass. Perhaps it was too aggressive for the Legislature this year. But the fact that it was being debated with conservative support says much about the state of marijuana in Colorado less than five years after voters amended the constitution to approve recreational sales.

As is, lawmakers attempted to advance a more moderate bill that would have authorized local governments to allow private marijuana clubs while defining what constitutes open and public consumption of marijuana. The House amended it to remove the clubs portion of the bill. But the Senate has not accepted those amendments, so a committee has been formed to reconcile discrepancies.

Efforts to normalize marijuana appear to get stronger in the Legislature each year.

Another example: A bipartisan bill this year started by allowing home delivery of marijuana, but it was amended to remove the delivery component. It allows retail marijuana stores to transfer products to a medical marijuana license in order to keep operating in the event of a federal crackdown. The amended legislation has been approved by the Senate and is in the House.

The increasingly powerful and wealthy industry continues to push against boundaries, in the eyes of law enforcement.

“There’s a constant attempt to chip and erode the guardrails,” said Greenwood Village Police Chief John Jackson, who has led legalization control efforts for the Colorado Association of Chiefs of Police. “We keep moving them out. What we started on was a two-lane road … and now the guardrails are out to maybe two or three lanes each way, and we’re continuing to build more in the roadway and to chip and erode at what we have.

“At some point, there’s going to have to be some questions about have we gone too far.”

2016 tax revenue for medical and recreational marijuana county-by-county in Colorado

$0 to $99,999
$100,000 to $199,999
$200,000 to $499,999
$500,000 to $999,999
$1,000,000 to $4,999,999
$5,000,000 +

SOURCE: Colorado Department of Revenue, https://www.colorado.gov/pacific/revenue/colorado-marijuana-tax-data

Expanding economic impact


It’s an uphill battle in Colorado for marijuana critics, who are up against a well-funded industry that has an army of lobbying power and can dangle financial rewards in the form of big tax revenue. In looking at marijuana legislation in which lobbyists have declared their participation, at least two dozen cannabis lobbyists have skin in the game.

Revenue from February resulted in about $17.5 million from all taxes, licenses and fees. Cannabis businesses saw more than $126 million in monthly sales, about a 36 percent increase over February 2016. The industry took in about $1.3 billion in sales in 2016.

The latest economic impact report was conducted for 2015 and released last year by the Marijuana Policy Group. At the time, the industry had a $2.39 billion economic impact on Colorado, when considering direct and ancillary businesses, and created about 18,005 jobs. Demand is expected to grow by about 11.3 percent per year through 2020.

Demand is expected to grow by about 11.3 percent per year through 2020.

Those numbers constitute clout.

“It is David and Goliath,” said Rachel O’Bryan, who has worked against public consumption efforts and is affiliated with Smart Colorado, a group dedicated to protecting kids from marijuana legalization.

“When you have a billion-dollar industry, there’s a lot of money to be spent on lobbying that little old me, little old Smart Colorado, doesn’t have,” O’Bryan said. “There’s an outgunning going on here.”

A change in tone

The tone around marijuana hasn’t just changed in the Legislature. On the national stage, the commitment to legalization by top Colorado politicians appears to be growing stronger, even as the attitude of the federal government could be shifting toward greater enforcement.

Yet marijuana is still a federal Schedule I illegal drug.

It’s unclear what the White House has in mind for a marijuana crackdown or even if a specific plan exists. Attorney General Jeff Sessions and White House spokesman Sean Spicer have offered vague, conflicting statements. But just the fact that they are talking about greater oversight has left anxiety within the cannabis industry.

A recently announced national coalition of businesses in the legal marijuana trade plans to fight any federal intervention in state regulation of cannabis.

The New Federalism Fund, as the coalition is called, hired the powerhouse legal firm Brownstein Hyatt Farber Schreck of Denver, which earned $25 million last year lobbying for businesses including McDonald’s, Comcast, the Navajo Nation and the University of Utah.

Meanwhile, Gov. John Hickenlooper, a Democrat who opposed legalization and has often criticized the growing industry, made his strongest statement yet in support during a national broadcast of NBC’s “Meet the Press” in February. While the governor stopped short of endorsing the industry, he said he is as close as he has ever been to calling it a success.

“I don’t think I’m quite there yet, but we have made a lot of progress,” the governor said. “We didn’t see a spike in teenage use; if anything, it’s come down in the last year, and we’re getting anecdotal reports of less drug dealers.”

The governor received pushback for his remarks; a group of national addiction experts who are legalization critics wrote a letter stating, “The only representative sample of teens ever conducted in Colorado, the National Survey on Drug Use and Health (NSDUH), shows that Colorado now leads the nation among 12- to 17-year-olds in (A) last-year marijuana use, (B) last-month marijuana use, and (C) the percentage of people who try marijuana for the first time during that period (‘first use’).”

But a state survey of students found that teen marijuana use has remained flat since legalization.

Hickenlooper has since tempered the evolution talk, saying he remains concerned about consequences from legalization. Perhaps the biggest concern is people using loopholes to grow a high number of plants at home legally but then diverting the product illegally to the gray or black markets.

Addressing home grows

Even the issue of controlling diversion into the black market has found resistance in the Legislature.

Lawmakers this session started with a bill that would have capped home grows to 12 plants, but after criticism the legislation now features a major concession for medical marijuana patients. Home growers would be allowed to grow up to 24 plants with a doctor’s recommendation, though they would have to register with the state.

Lawmakers also fought to define what a plant is so that law enforcement wouldn’t be allowed to arrest people for having dozens of seedlings that might not become mature plants.

And while the bill would have made any violation of the plant count a felony, it now would make a first violation a petty offense with no jail time and a fine of up to $1,000. Second or subsequent offenses would carry a misdemeanor penalty for an unregistered home grow that is more than 12 plants up to 24. Second or subsequent offenses for more than 24 plants would carry a felony penalty.

Colorado law allows medical marijuana patients to grow up to 99 plants if a doctor determines that there is a necessity. A caregiver to licensed patients can grow medical marijuana for each person they serve. The legislation, which is off to the governor for his signature, would still allow patients and caregivers to grow up to 99 plants, but if it’s more than 24, they would be prohibited from growing at home. They would have to find a sanctioned, nonresidential location.

Colorado is more generous than other states that allow home grows. California, for example, limits home grows to six plants.

A recent Keating Research poll found that Colorado voters favor the 12-plant limit by 57 percent to 36 percent.

Caption +

Colorado law allows medical marijuana patients to grow up to 99 plants if a doctor determines that there is a necessity. (Mark Reis, The Gazette)

Show MoreShow Less

Data seems to support the contention that home-grow marijuana diverted illegally has proliferated since legalization.

In 2015, seizures at residential grow sites in Colorado amounted to 4,406 plants and 2,545 pounds of processed marijuana, according to the Drug Enforcement Administration. Last year, that number jumped to 20,031 plants and 7,260 pounds of processed marijuana seized.

Mark Bolton, senior deputy legal counsel to the governor who has assumed the role of marijuana czar for the state, said those numbers represent only the “tip of the iceberg.” It’s difficult to fully understand the extent of illegal diversion, as much of it happens underground.

“The focus of these bills was a public safety issue, the fact that these grows are being set up in neighborhoods,” Bolton said.

When asked whether the tenor on enforcement has changed with legalization, Hickenlooper emphatically responded, “Not down here!”

“Look at how much money I’m putting into increasing enforcement to make sure we do address the gray market,” he said, “and I’m the first person to say we shouldn’t have people smoking in private clubs … I’m not sure this is the time to go liberalizing even further our regulations around recreational marijuana.

The governor initially requested $16 million partly for controlling the gray market but also to augment criminal justice diversion and supporting behavioral health services. The governor’s office estimates that about $6 million would be applied to gray market enforcement.

Reliance on revenue

Despite some of the perceived unintended consequences of marijuana legalization, state leaders are largely committed to seeing the experiment succeed. Republican Colorado Attorney General Cynthia Coffman pledged her support to defend the marijuana industry. She invited Sessions — an ardent foe of marijuana — to visit marijuana businesses in Colorado. A tweet from her office stated, “AG Coffman ready to share our CO experience and insight with him.”

Rep. Steve Lebsock, D-Thornton, took to the floor of the House when the home-grow bill was being debated in an emotional plea for medical marijuana patients.

“If this bill passes, we’re putting patients in jail,” Lebsock told House members.

The governor’s office proposed using $16.3 million from marijuana revenue to fund affordable housing for people with behavioral health needs and to address chronic homelessness. Hickenlooper said using marijuana money is appropriate because there is a correlation between homelessness, a need for affordable housing and substance abuse, including impacts from marijuana legalization.

Caption +

A medical marijuana grow operation is housed in a commercial building in April 2015 in Colorado Springs. The cannabis industry took in about $1.3 billion in sales in 2016, and demand is expected to grow. (Mark Reis, The Gazette)

Show MoreShow Less

A medical marijuana grow operation is housed in a commercial building in April 2015 in Colorado Springs. The cannabis industry took in about $1.3 billion in sales in 2016, and demand is expected to grow. (Mark Reis, The Gazette)

State budget writers initially rejected the governor’s request. But his lobbyists and budget director hovered around the Senate chamber, and lawmakers eventually agreed to include $15.3 million in marijuana money for homelessness and housing.

“The vast majority of chronically homeless individuals have either drug or mental health issues,” Hickenlooper said. “I don’t think it’s unreasonable to look at some of the tax revenue provided from marijuana to make sure that we are able to get these people back into a more constructive position in society.”

There is no specific study linking marijuana and homelessness. But Cathy Alderman, spokeswoman for the Colorado Coalition for the Homeless, said there is anecdotal evidence of people moving to Colorado to find work in the marijuana industry.

“Because it is a new economy … people are moving to Colorado, and specifically to Denver, to work in the industry, and then they can’t afford to live here, and so we’re seeing an impact … ”

Alderman stopped short of drawing any direct connection between marijuana and homelessness.

“I’m hesitant to say it is causing homelessness in the way that people think about it, that folks are using marijuana then suddenly they’re more vulnerable to becoming homeless.”

To marijuana critics, the fact that officials are looking at marijuana money to solve the state’s budget woes is cause for concern, another sign of growing dependency.

“You have a turf battle and a protection of tax revenue,” Smart Colorado’s O’Bryan said.

O’Bryan insists that the war is far from over, as states including California and Massachusetts are still coming online with recreational legalization, which could diminish Colorado’s highly lucrative market position.

“These deals are about tax revenue,” O’Bryan continued. “We are being forced to write policy before we have facts … I don’t mean to discount the voters’ desires; it just puts policymakers in a difficult position to do it safely.”

But marijuana lobbyists and advocates say the evolution has less to do with money and more with personal and professional acceptance of legal recreational cannabis.

“As more and more people on both sides of the aisle get educated about the issue, we see the consistent and ongoing withering of all of the negative attacks in exchange for the reality of what’s happening,” said Christian Sederberg, a well-known cannabis attorney.

“As policy people, it’s always more comfortable to talk to people about nitty-gritty policy issues than getting through the basic education,” said Jordan Wellington, a marijuana attorney who works with Sederberg. “The more educated that the legislators have become, the more interesting and the more thoughtful the conversations are.”