Today marks one week since the launch of recreational marijuana sales in Colorado, and despite the concerns voiced by pot-legalization critics, the state appears to be surviving just fine.
Meanwhile, the expansion of the recreational cannabis biz continues apace. According to one industry representative, more than fifty are now open statewide, with more expected to start operating in the coming days.
"Everybody's just done a really good job of doing their job," says Betty Aldworth, deputy director of the National Cannabis Industry Association. "When it comes to consumers, regulators, officials, businesses, it's hard to imagine this roll out going better."
Indeed, Aldworth estimates that shops statewide registered sales of at least $1 million on January 1, when 37 of them began serving customers, with more than $5 million being collected by day five. She adds that "well over fifty" recreational stores were thought to have been operational as of yesterday, "and more will open this week. We've had stores opening every weekday, and that's continuing."
Aldworth acknowledges "issues with shortages and some concern about pricing," but she believes "that's going to work itself out in the next weeks and months. I'm not concerned about those things long-term."
"Having more stores opening and more places where folks can go will only help," she believes. "And we're also getting past that first handful of days, where the novelty was really important to people. We did some casual surveys of people in line, and about half of them had cannabis at home, so they didn't have to run to the store. But they wanted to participate in making history.
"I think there were a fair number of people who went out in the last week just because they were so excited about celebrating the end of marijuana prohibition in this one, specific way."
As for pricing, Aldworth says she's visited assorted shop websites in recent days, "and it does look like prices have gone up to some degree -- but that's to be expected. The demand has been incredibly strong, and that's part of balancing the supply and demand -- making sure that the supplies can be stretched to meet the remarkably strong demand in the market right now. But we expect the prices to come down to some degree -- not to where medical prices are, probably, but the market tends to work itself out when it comes to this sort of thing." Continue for more of our interview with Betty Aldworth about the first week of recreational marijuana sales in Colorado.
In addition, she goes on, "it's been quite expensive for these stores to go through the conversion process" from medical sales to either a combination of medical and recreational sales or recreational alone. There are licensing fees and often tremendous construction expenses and a variety of other hard expenses that's making it cost more to produce the marijuana, at least in the short term."
As Aldworth implies, medical prices are likely to remain lower than those affixed to recreational marijuana due to the taxes placed on the latter -- and some critics continue to believe the rates are so high that they'll encourage people to keep using the black market instead of the regulated one.
She sees no evidence of that happening, though.
"This is why the state legislature wrote in the ability to adjust the tax rate," Aldworth says, "and this is why markets respond to supply and demand. Prices are elastic, and there is absolutely a sweet spot both for taxes and retail prices. But people are willing to pay somewhere above black market rates for the sake of convenience, variety, product safety and security. All you have to do is go to a store once to understand the value of the regulated market."
Challenges remain, Aldworth admits -- especially when it comes to the lack of banking resources for marijuana business -- a state of affairs that prompted a proclamation by Denver City Council earlier this week asking the federal government to take action.
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
But overall, Aldworth believes that "what we did on January 1 and the days following was demonstrate to the world what a regulated market looks like -- and in doing so, we've demonstrated that a regulated market is stronger than an unregulated market. And the fact that it all went so smoothly fortifies the images and stories coming out of Colorado."
Send your story tips to the author, Michael Roberts.