Jared Polis Still Believes Colorado Is a Cannabis Leader, Even If Numbers Say Otherwise

Colorado marijuana has seen better days. Even the staunchest supporters admit it.

"Face it: It's been a really rough couple of years for the industry," National Cannabis Industry Association executive director Aaron Smith told a crowd of business owners and pot industry players.

Although Smith is hopeful that a federal rescheduling of marijuana from Schedule I to Schedule III will provide a market boost, he admitted that Colorado, where the NCIA is located, is facing a "nadir" in commercial cannabis. Smith, and many of the other speakers at the NCIA's stakeholder meeting in downtown Denver on April 4, weren't sugarcoating the situation: Colorado's pot industry has been going downhill for the last three years.

After increasing for seven straight years, topping out at nearly $2.23 billion in 2021, marijuana prices and sales began dropping after the pandemic ended, with dispensary earnings decreasing about 20 percent from 2021 to 2022 and then another 14.5 percent from 2022 to 2023, according to the state Department of Revenue.

Although other regions experienced similar drops immediately following the pandemic, states in the Midwest and on the East Coast, such as Illinois, Michigan and New Jersey, have growing markets even as Colorado's continues to struggle.

Cannabis jobs fell around 30 percent from 2022 to 2023, according to an industry job report; DOR data shows that retail cultivation permits dropped about 21 percent during the same span. Multi-state cannabis giant Curaleaf exited the state last year, followed by longtime edibles brands that were founded in Colorado but left for states newer to legalization. Dispensary ownership groups have been closing and selling off stores, as well.

Despite all the gloomy statistics, Colorado dispensaries still sold over $1.5 billion in marijuana products last year. That's nothing to hold your nose at, even if the smell of Rotten Rozay or Garlic Cocktail offends you. To rile up the troops, the NCIA brought out the big gun: Governor Jared Polis.

A longtime supporter of cannabis legalization who pushed pro-marijuana proposals while he was in Congress, Polis still makes waves at hemp and marijuana events. Although he conceded that the state is going through "an awkward adolescence" with commercial pot during his talk, the governor said that Colorado "is still very much a leader that other states look to" in marijuana policy.
"You're not a leader just by passing one thing and sitting on your rear end," Polis said, then dove into recent laws and administration initiatives intended to spur marijuana entrepreneurship.

Earlier that day, Polis's office and the state's Cannabis Business Office announced a new pilot program for marijuana business owners who qualify for the state's social equity program, which was designed to support people and communities who were harmed by the drug war. Part of the state Office of Economic Development & International Trade, the Cannabis Business Office will connect social equity business owners with "subject matter experts" who will help new growers, edibles makers and other potrepreneurs with compliance audits, brand identity books, investor pitch decks and other technical aspects.

According to Polis, this will provide an easier start for small and rural businesses, and is the kind of help a business owner in a traditional field would receive from the federal Small Business Administration.

"We're trying to fill that void," Polis said, touting Colorado as the "first state in the country" to create this kind of program.

The governor pointed to past efforts, such as pardons for minor pot possession and letters to President Joe Biden and Congress advocating federal marijuana reform, and promised more things to come from his office. He told the crowd that he wants to "reduce" operating costs and taxes for marijuana businesses, and that his office will continue sending recommendations to lawmakers and the state Marijuana Enforcement Division.

"With innovation and collaboration, we will continue to lead the way," Polis said, praising Colorado's marijuana industry for being "not just the first but, in an ongoing basis, the best and most innovative in the entire country."

The governor was warmly received by the industry, but other conversations at the gathering weren't as optimistic. Right before Polis took the stage, a panel on Colorado marijuana hospitality, or lack thereof, discussed why the state has just five operating businesses allowing social pot consumption.

Colorado has allowed for lounges, party buses and dispensary tasting rooms since 2020, but local governments must opt in before they can get in gear. So far, only a few municipalities or counties have — and Denver and Adams County are the only two with active licensees. Even once business owners receive a hospitality license from the state, they must get approved locally, which is where the real obstacles occur, according to Cirrus Social Lounge founder Arend Richard.

"The tricky part has been the City of Denver," he said.

While Cirrus and several other venues in Denver are approved for hospitality licenses, actually obtaining a license to operate from the city has proven expensive and challenging. According to Richard and other venue owners, the city is forcing any indoor marijuana smoking lounge to have a ventilation system for indoor cigarette smoking, and that costs upwards of $500,000.

"I'm happy to do it," notes Richard, who says he is "almost at the finish line."

Cirrus has been paying rent for its property at 3200 East Colfax Avenue since 2022, however, and it's not the only potential pot lounge that's been paying rent or property taxes for well over a year without being able to legally operate. In fact, the only operating pot hospitality businesses in Denver are three mobile tour services and a vape-only lounge that was grandfathered in under previous city regulations.

Joshua Littlejohn, who co-owns THC-infused syrup brand Highgrade, said direct talks and collaboration between government officials and business owners is needed if all of Colorado's marijuana market — and not just big business — is going to thrive again.

"At what point do we admit that we don't know what the fuck we're doing?" he asked. "How do minority business owners become stakeholders?"

The crowd laughed during the first part of his question, but Littlejohn was serious about a need for more honest dialogue during marijuana rulemaking, adding that government and industry need to "come together and admit that both sides have made mistakes."

Colorado legislators are currently considering a bill that would streamline marijuana industry licensing rules, genetic sales, contaminant testing and more, while annual MED rulemaking is set to take place starting this summer.