We recently caught up with Cullen to see what he's been up to since then — notably, pushing for federal tax reform for the thousands of legal cannabis businesses in Colorado.
Westword: Colorado Harvest Company is nearing a decade in the legal cannabis industry. Did you think you'd make it this long in the early days?
Tim Cullen: I was optimistic — and still am — when I paused my teaching career in 2009. I imagined the cultural shift toward acceptance, and I anticipated that many challenges would come with a brand-new American industry, so I was excited.
January 1, 2014, was the turning point. Colorado Harvest Company had two of the first twelve licenses awarded in Denver. Five years into the business, when recreational sales started, we were nearly overwhelmed with the volume of interest — and shoppers! Customers were lined up for blocks at times. We knew there would be lots of opportunity, and we were committed to do things right in terms of legal compliance and product purity. That early commitment to good business practices sustained our company and laid the foundation for its growth.
How has the industry changed since then?
I think the biggest change has been corporate interest. I believe there will always be profitable opportunities for boutique cannabis businesses like Colorado Harvest Company, especially in new markets, but pharmaceutical corporations and even big tobacco companies like Philip Morris are waiting for their chance to enter the market. It’s already happening in other countries. Federal rescheduling of cannabis will result in a swift and major disruption of the industry.
Which is a bigger threat to small cannabis businesses in Colorado — federal laws or consolidation?
Section 280E of the federal tax code remains the single biggest threat to small cannabis businesses. It mandates that all of our revenue, without deducting any expense, is considered taxable profits. This makes it a challenge to even break even in the industry. Until cannabis is de-scheduled [and 280E no longer applies to us], entrepreneurs and big businesses will face the same challenge to turn a profit.
We have the same challenges as other retail establishments, which we’ve worked through over the years. Acute awareness of legal compliance and customer service has been a saving grace. We hire good employees, compensate them well and train them. We were able to secure a checking account, which makes it easier to pay employees and vendors. We worked through security issues to ensure the safety of our employees and customers. Hiring an outstanding, customer-oriented team is essential to a successful dispensary.
What about in the grow? How do you ensure a profitable, quality plant without mold, pests or pesticide use taking over?
I was a high school biology teacher for ten years before I started in this business as a grower. Science has always been a primary interest of mine. By studying, experimenting and applying the best production methods and clean growing practices, I knew we would never be tempted to use, let alone need, pesticides. I consulted with the Colorado Department of Agriculture and offered my expertise so that other growers could benefit from these methods. We measured energy and water use, and continuously strive to conserve.
What are some new trends you're excited to pursue in commercial cannabis?
I’m interested in the cannabis workforce. I believe that there is a business opportunity to help cannabis owners identify and manage the people necessary to sustain their businesses and help them thrive.
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