Amendment 64: Will pot discourage companies abroad from expanding to Colorado?
As a senior partner with a Colorado law firm, Dick Clark works with international companies looking to expand their operations here. But since the passage of Amendment 64, which legalizes small amounts of recreational marijuana, some companies are reconsidering doing business with Colorado,he says, and he expects that problem will only get worse.
With A64, Colorado's Regulate Marijuana Like Alcohol measure, now officially law, business groups and others who opposed the amendment have expressed a wide range of concerns about potential negative consequences. Some of these questions are being discussed in Governor John Hickenlooper's recently formed task force, which is charged with coming up with policy recommendations for implementation.
Supporters of A64 celebrating its passage on Election Day.
Photo by Brandon Marshall
While the backers of legalization in Colorado have long argued that the measure will be a boost to the economy, some say they are worried that legalized pot can only hurt the state financially, and for a variety of reasons.
Supporters of the new law argue that legalized pot could be a huge help for tourism, attracting visitors to the state. But Clark, a senior partner with Rothgerber Johnson & Lyons LLP, says he fears that legalization will have the opposite effect -- and suggests that he's already seen clear signs of that.
We connected with Clark after we spoke with aDenver CEO whose major gripe with legalization was that he would still have to drug test his employees and job candidates, even though it's now legal for adults to smoke marijuana in the state.
Clark, whose company is based in Denver, Colorado Springs and Casper, says that he has helped bring more than a hundred companies to Colorado from overseas, and that some of the ones he is working with now are not happy about A64.
"Our firm has been working with two companies to expand their operations and buy land and set up...North American headquarters here and hire local workers and bring in people from their countries," he says. "And I was frankly surprised -- within the week following the vote, I had phone calls from both of them saying, 'What is going on there? Are you crazy?'"
Negotiating these business expansions into Colorado is typically a long, arduous process, he explains, and the global companies take a lot of different factors into consideration. "We are talking about huge investments by them -- millions upon millions of dollars. They don't want to come in and set up a business operation and have to close it in a year," Clark says.
The two companies he is currently working with are based in Asia; one is in the biotech field and the other in health care. He says that both of them consider Amendment 64 a negative for Colorado as they try to decide where they want to set up shop in the United States.
"The best way I can explain it -- let's say I was considering Utah or Colorado. Both have highly educated workforces. Both have nice standards of living," Clark says. "With respect to the legalization of marijuana....the foreign companies see that as a strike against Colorado and thus on the plus side for Utah."
For one thing, a lot of companies abroad are drawn to Colorado because they think the state has a strong work ethic -- and pot doesn't fit in with that picture, he says. (Miss Universe recently weighed in on the matter, saying she's worried recreational pot will unnecessarily slow people down).
"Our folks work extremely hard and are good employees," he says of Colorado. "At least in the eyes of several companies that have talked to me, the vote on Amendment 64 is inconsistent with that selling pitch we've been trying to make."
Clark doesn't think that companies will automatically say no to Colorado because of legalization, but, he says, "It will be a much tougher sell."
Some foreign countries that he works with just have different perspectives on marijuana and drug laws, he explains, and ultimately they believe "drug users are not productive employees."
Supporters and opponents alike in Colorado are all waiting to see how the federal government is going to treat the new state law that contradicts federal policy prohibiting marijuana, and this uncertainty is another deterrent to foreign business, Clark says.
With respect to drug testing and other unknowns around legalization, he notes, companies are already asking him, "What can we ask of employees what can we not ask employees?"
Clark says he regularly competes with other states for businesses, and he is sure those states will take advantage of the situation. "All of a sudden, we have an issue that other states don't," he says. "There's no question in mind...that other states will use this against us in terms of trying to attract foreign business."
Get the Marijuana Newsletter
Stay informed of the latest marijuana news and views with updates about dispensaries, strains, products, changes to the law, and special offers in your area.