Yesterday in Part One, I reminisced about the approval of the very first ‘medical marijuana’ dispensary in Archuleta County. It took a couple more years for our local government leaders to wrap their heads around the idea that the Colorado Constitution had been amended and the production and sale of medical marijuana was indeed a legal business. The transition was helped by the approval of Amendment 60 in November 2012, when Colorado voters approved another Constitutional amendment guaranteeing the right to use marijuana for simple recreational purposes.
No doubt the voters supported legalization for a variety of reasons. For some of us, we no longer wanted this popular medicinal and recreational drug to be a black market commodity. We wanted everything out in the open — and for heaven’s sake, we wanted the industry to be paying taxes. State excise taxes. State and local sales taxes. Business license fees. Local excise taxes.
It took a while for the state lawmakers to define the rules and tax rates, but by 2014 the first “retail” dispensaries had opened their doors, and proceeded to send the state government a total of about $68 million in various taxes and fees. By the end of 2019, the state had collected a total of $1.2 billion in revenues. (These totals don’t include local taxes and fees, which were substantial, nor does it include the impacts of ‘marijuana tourism’.)
Not bad for a formerly illegal sector of the economy.
Just when things were going swell, a global pandemic found a foothold in the US, and the Colorado government decided to implement a ‘shelter in place’ policy to prevent the spread of the novel coronavirus.
The policy was something of a moving target, however. Yes, we wanted Coloradans to stay at home as much as possible, but certain businesses would obviously need to remain operational. People need food, and medical care, and… well, what other businesses were critical to daily existence in Colorado?
And just as important, what businesses were critical to tax revenues? I mean, government wasn’t going to be stupid about this.
I had the pleasure to meet with a few of our local marijuana entrepreneurs last week, to discuss the transition of marijuana dispensaries from a barely-legal sideline business in 2009 to one of Colorado’s ‘critical businesses’ during the 2020 pandemic — up there with hospitals, and grocery stores, and oil and gas exploration, and state government. An essential service, in other words.
My first visit was with Good Earth Meds’ owner Bill Delany, the local industry pioneer we met in Part One.
Mr. Delany and his staff recently made modifications to their dispensary in the Cloman Industrial Park near the airport, to permit ‘drive-up’ purchases.
When the regulations were originally laid down for Colorado dispensaries, ‘drive-up window’ service was expressly prohibited. I suspect the Marijuana Enforcement Division (MED) feared that a ‘drive thru’ purchase might encourage customers to immediately light up a pipe inside their vehicle, and as a result find themselves operating the vehicle ‘under the influence.’
There may have been other reasons, of course.
But by the end of March 2020, it became obvious that modifications to the existing rules would be necessary in order to allow customers and dispensary employees to maintain Colorado’s required six-foot ‘social distance.’ As part of subsequent ‘Emergency Rule Adoptions’ — one on March 20, and another on April 2 — dispensaries were allowed to do things they’d previously been forbidden to do: take orders via the internet, accept credit cards, and install ‘drive up’ windows.
“Since we’re deemed an essential business, and people are seeking our products,” Mr. Delany explained, “we’ve set up the safest situation that we could. The state and the county have both indicated that this is a temporary [emergency] rule. For 120 days, starting on March 20, they’re allowing stores to be ‘drive up.’ At that point, the legislature will look at it… and if it’s successful, they might keep [the rule.]”
We will note here, in passing, that Marijuana Enforcement Division — the agency handing down these new, more flexible rules for the marijuana industry — is a division of the Colorado Department of Revenue. In case that has any bearing on the matter.
My next visit was with Peter Hurley and Jay Diffey, co-owners of San Juan Strains in downtown Pagosa… a building location that does not avail itself to a ‘drive-thru’ setup. A few customers did enter the lobby to make purchases during our interview.
I gathered that business had slowed considerably as a result of the “Stay at Home’ order, but I wondered aloud: How had the state decided to classify marijuana dispensaries as ‘critical businesses’ during the social distancing effort?
“I was curious about that myself, so I was reading through the Governor’s proclamation,” Mr. Hurley responded. “It basically said that ‘We know marijuana treats certain conditions — anxiety, depression. And we don’t want to deprive our citizens of that. And so, we believe it’s an essential business.'”
Mr. Hurley smiled. “It’s hard for me to believe the government really cares about us, in that way. The cynical part of me thinks they enjoy the tax revenue.”
“An even more cynical part of me says, they really want people to stay home…sedated. How else could you sit through eight installments of ‘Tiger King’?”
We discussed the fact that liquor stores were also deemed ‘critical businesses’ in the governor’s orders… possibly to prevent emergency rooms from getting flooded with alcoholics suffering from withdrawal?
“But what was really interesting,” Mr. Hurley continued, “was that they found gun shops to be ‘essential’. I don’t know what their official reason for that was, but they were allowed to stay open. Gun shops, and pawn shops. I didn’t quite understand that.”
In the end, we agreed with a comment by Mr. Hurley’s partner, Jay Diffey, that marijuana is perfectly suited to a situation where you are forced to sit around the house, doing nothing.