Reader: Cannabis in Colorado Is Still a Pay-to-Play Model

The Colorado Legislature passed groundbreaking bills concerning cannabis this session, including one that expands opportunities for publicly traded companies and outside investors to get involved in the state's marijuana industry. And less than a week after Governor Jared Polis signed that bill, one of the state's largest pot corporations announced plans to scoop up two commercial marijuana operations, including the largest legal outdoor cultivation in North America.

On June 5, Medicine Man Technologies announced that it had reached binding agreements with Los Sueños Farms, an outdoor marijuana farm on 36 acres outside Pueblo, as well as Mesa Organics Ltd, which owns a commercial cultivation, dispensary and extraction facility in Pueblo.

Readers were quick to comment on the deals. Says Davisson: 

Largest licensed outdoor grow? The black market outdoors out west dwarfs this.

Responds Scott: 

Farms like this should be common. We could be a world supplier.

Jacob replies:  

But people can't grow one plant in their back yard legally. Cannabis isn't legal...it's a pay-to-play model.

Notes Marcus: 

This isn’t a good buy, in my opinion... grows are dead-end investments unless you own a flourishing dispensary/dispensary chain with it. Medicine Man isn't a very good dispensary, either. What a waste.

Concludes Josh:

 Here comes shit weed flooding the market. Stick to your local craft growers if you want quality.

Although the deal has been struck, the sales can't be finalized until the language of House Bill 1090 goes into effect, because Medicine Man Technologies is a publicly held company; it was one of the first cannabis businesses in Colorado to file with the SEC. After the new law takes hold on November 1, Medicine Man plans to finish purchasing both companies by February 1, 2020, according to Medicine Man Technologies CEO Andy Williams.

"The new law repealed the prohibition against public companies from owning cannabis licenses in the state," he explains. "It also made provisions to allow out-of-state ownership of cannabis licenses without the restrictive provisions that were in place before. Now, outside investment can come from a public company or private money, like investment funds, banks or private equity capital."

Adds Williams: "Not everybody is going to do this, but I do know other companies that I have a lot of respect for that will be going down similar paths. That is going to be great for Colorado, ending up with two or three headquarters of the country's largest cannabis companies."

What do you think of the new law? Will it be great for Colorado? Post a comment or email your thoughts to [email protected].