Denver Gears Up For Legal Pot Sales Beginning January 1

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Denver Gears Up For Legal Pot Sales Beginning January 1
Image credit: Wendy McCormick

Come January 1, anybody older than 21 can legally purchase marijuana from licensed dispensaries and outlets across Colorado for recreational purposes. Colorado will become the first state in the U.S. to permit sales of recreational marijuana.

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Denver awards licenses

In Denver, the city’s Department of Excise and Licenses awarded only 14 licenses for retail shops, 17 licenses for pot growers and three licenses for makers of cannabis-infused items, and there are concerns that demand may outstrip supply causing long lines.

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Red ropes for line management, security guards to manage order and even cookies and coffee for people in the queues – these are some of the arrangements being made for the big day by one of the fortunate outlets which secured a license to sell recreational marijuana. Only those businesses currently engaged in medical marijuana have been authorized to sell it for recreational purposes from 8 am on January 1.

One entrepreneur has converted empty warehouse space into 40,000 square feet of pot-growing rooms inside a brand-new marijuana dispensary. Owner Andy Williams says it’s going to be like a gleaming white Apple store of weed.

Will demand outstrip supply?

But the million-dollar question remains: will there be enough of the weed to meet the demand? Every Colorado resident is entitled to buy an ounce of marijuana, while persons from out-of-state are limited to a quarter-ounce. Patients certified for medical use can buy up to two ounces. According to estimates, the number of users could jump overnight by six times after the regulatory relaxation, and there are fears that the black market could open up to meet the demand.

Note that anybody caught with more than the legally permissible quantity could face hefty fines, even imprisonment. Though marijuana remains illegal under federal law, states have been permitted to take their own decisions regarding legalization, subject to overall federal priorities.

The Denver International Airport plans to ban the possession of all marijuana on its property by early January. Its goal is to combat inter-state trafficking of pot and it chose to bar all possession and display of pot to eliminate confusion and make the same rules apply to all, according to Stacey Stegman, spokeswoman for the Airport.

Sales of the weed could generate as much as $67M in additional annual revenue for Colorado State. Aside the regular sales tax of 2.9%, recreational marijuana sales will attract an additional sales tax of 25%. Colorado’s experiment is being closely watched by other states, especially Washington, which plans to legalize by spring 2014. Recently, though it condemned Uruguay’s move to legalize pot, the US refrained from taking any further steps.

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Saul Griffith is an investor in stocks, commodities and forex, writing under a pen name. Saul has top accounting qualifications and extensive experience in industry and the financial markets. He also has an abiding interest in breaking news that could be a harbinger of new trends and give insight into an instrument’s potential for providing value, growth or yield.
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