Cannabis News
The Rise and Fall of Pioneer Pot Markets
Published
7 months agoon
By
admin
The Rise and Fall of Pioneer Pot Markets
When Colorado and Washington made history in 2012 as the first U.S. states to legalize recreational marijuana, they kicked off a green rush that rapidly transformed the cannabis industry. Colorado in particular saw a meteoric rise, with sales soaring to $2.2 billion in 2020 and the state raking in hundreds of millions in cannabis tax revenue. Some local entrepreneurs rode this wave to stunning success, building national brands from humble beginnings.
Fast forward to 2024 and the Rocky Mountain high has worn off. Colorado dispensaries that once couldn’t keep up with demand now sit shuttered. Statewide sales have plummeted over 30% from their peak. While still a sizable market, the trailblazing industry that put Colorado on the cannabis map is now a cautionary tale.
1,200 miles to the west, California – the country’s largest legal weed market – is facing its own reckoning. Despite the Golden State’s legendary cannabis culture and ideal growing climate, many legitimate operators are struggling to stay afloat. But while Colorado’s crash stems from market saturation and competition from newly legal neighbors, California’s decline has more to do with over-taxation enabling the tenacious black market to undercut legal businesses.
As more and more states jump on the legalization bandwagon, policymakers are looking to these early adopters to understand how to establish a stable and sustainable cannabis sector. In this article, we’ll unpack the factors behind the slumping sales in Colorado and California, and explore what lessons emerging marijuana markets can take away to avoid the same pitfalls. The great American pot experiment is far from over.
Colorado’s cannabis industry, once a roaring success story, has fallen on hard times. According to a recent Politico article, statewide marijuana sales have plunged from a high of $2.2 billion in 2020 to just $1.5 billion in 2023 – a jaw-dropping decline of over 30% in just three years. This has led to widespread layoffs, business closures, and a lot of nervous industry stakeholders.
So what’s behind this Rocky Mountain revenue recession? Industry insiders point to a perfect storm of factors. “It’s like the wind in our cannabis sails in Colorado has just been sucked all the way out,” laments Wanda James, founder of Denver dispensary Simply Pure.
A key culprit is the very success that Colorado pioneered – the spread of legalization to neighboring states like New Mexico and Arizona, which has siphoned off customers. “We’re a victim of our own success,” explains Jordan Wellington, a partner at Denver-based cannabis policy firm Strategies 64. “New markets drawing investment away, new markets drawing purchasing away — all of these different things combined into the soup of the challenges [facing] Colorado.”
Businesses have had to adapt to this new reality in different ways. Some, like Dank Dispensary in Denver, have had to cut back on employee perks and parties. Others, like Southern Colorado retailer Maggie’s Farm, have shuttered multiple locations.
Cannabis jobs in the state have plummeted 16% in the past year alone, according to a report from Vangst.
But while painful, this market contraction is a natural evolution for maturing cannabis markets, explains Beau Whitney of Whitney Economics. “Initially, supply is low and profits are high, which draws in new businesses. As supply and consumer access catch up, prices drop.”
As more states legalize, Whitney predicts this boom-and-bust pattern will ease and interstate prices will normalize.
In the meantime, Colorado businesses are adjusting to compete in a crowded and dynamic market. Denver dispensary Simply Pure saw sales spike 60% during the COVID-19 lockdowns, only to come crashing down when cultivators ramped up production.[1] “The only problem … for a long time was that there was never enough weed,” recalls Jon Spadafora, CEO of wholesale cultivator Veritas Fine Cannabis. “We all overestimated the market. We all believed a little bit too much of our own PR.”
Veritas has since downsized from 144 employees to just 21.
This thinning of the herd is inevitable as the industry matures and stabilizes. But those businesses that are able to adapt and ride out the turbulence could be well-positioned for the next chapter of Colorado’s cannabis story.
As more states enter the legal fray, Colorado’s hard-won experience and expertise could prove invaluable. The green rush may be over, but the Centennial State’s influence is sure to endure.
While Colorado’s cannabis market struggles are largely due to increased competition and market saturation, California’s industry woes stem from a different root cause: overtaxation. Despite high hopes that legalization would cripple the illicit market, California’s hefty tax rates have instead enabled illegal operators to continue undercutting legal businesses.
California imposes some of the steepest cannabis taxes in the country, with rates up to 40% in some jurisdictions when state and local levies are combined.[1]
This has kept prices for legal products artificially inflated compared to the illicit market. “The tax rate is way too high,” argues Javier Montes, owner of Wilmington dispensary Delta-9 THC. “People got used to the black market, and then they were supposed to transition to the legal market, but there’s no incentive to.”[2]
This over-taxation has effectively acted as “prohibition 2.0”, allowing illegal grow operations and unlicensed dispensaries to thrive. Ironically, this has attracted an unexpected player: Chinese organized crime.
While Mexican cartels have largely pivoted to more profitable hard drugs like fentanyl, Chinese drug trafficking organizations have moved in to exploit the lucrative California cannabis black market.[3] Authorities have busted numerous large-scale Chinese grow operations hidden in suburban homes in recent years.[4]
But taxation is far from the only issue plaguing California’s legal cannabis industry. The state’s onerous and costly regulations have created immense barriers to entry for legal businesses. Lengthy licensing processes, restrictive zoning laws, and expensive compliance requirements have kept many legacy operators from transitioning to the legal market.[5] This has perpetuated the illicit industry, as many longtime growers and sellers see little benefit in going legit.
Furthermore, California’s patchwork of local cannabis laws has created a confusing and inconsistent market landscape. While the state legalized recreational use in 2016, municipalities can still ban cannabis businesses outright. As of 2022, fewer than 40% of California cities and counties allowed any type of legal cannabis operation.[6] This has left large swaths of the state underserved by legal operators and ripe for illicit activity.
These factors have led to a California cannabis market that is far underperforming its potential. Despite having nearly twice the population of Colorado, California’s legal sales in 2022 were only moderately higher at around $5.3 billion.[7] For the state to fully realize the promise of cannabis legalization, policymakers will need to overhaul the current tax and regulatory scheme to support licensed businesses and motivate illicit operators to transition to the legal market. Until then, California’s cautionary tale will continue.
SOURCES:
[1] https://taxfoundation.org/state-cannabis-taxes-2022/
[2] https://www.latimes.com/california/story/2022-12-20/california-cannabis-industry-layoffs
[3] https://www.latimes.com/california/story/2022-07-19/california-marijuana-china-cartels
[7] https://www.politico.com/news/2021/10/23/california-legal-illicit-weed-market-516868
As more states consider cannabis legalization, policymakers would be wise to study the cautionary tales of Colorado and California. These pioneering markets offer valuable lessons on what works – and what doesn’t – when it comes to crafting a successful and sustainable cannabis industry.
First and foremost, states must resist the temptation to overtax the newly legal market. While cannabis may seem like a cash cow for revenue-hungry governments, excessive taxation can backfire by perpetuating the illicit market.
California’s punitive tax rates, reaching up to 40% in some areas[1], have kept illegal operators in business and undercut the very legal industry the state is trying to foster. Policymakers should instead aim for a tax sweet spot – high enough to generate meaningful revenue, but low enough to motivate illicit operators to transition to the legal market.
Secondly, regulations must be designed with an eye toward fairness and equity. Overly burdensome licensing requirements, zoning restrictions, and compliance costs can shut out smaller operators and communities disproportionately impacted by the War on Drugs.
Equity must be baked into the framework of the legal market from day one, with measures like expedited licensing for legacy operators, fee waivers for social equity applicants, and reinvestment of cannabis tax revenue into hardest-hit neighborhoods.
By lowering barriers to entry and providing support, states can create an inclusive industry that benefits a broad range of stakeholders.
Finally, policymakers should embrace the free market’s ability to self-correct. As Colorado’s story illustrates, the invisible hand is already at work balancing supply and demand in maturing cannabis markets.
While the industry’s growing pains have been undeniably painful, with layoffs and closures roiling the once-booming market, this contraction is a natural stage in the evolution of a new sector.
As Beau Whitney of Whitney Economics notes, “As more states legalize, Whitney predicts this boom-and-bust pattern will ease and interstate prices will normalize.”[2] By allowing market forces to weed out inefficiencies and reward innovation, states can cultivate a leaner, more resilient cannabis industry.
Of course, the cannabis industry is still in its infancy, and there will undoubtedly be more lessons to learn as legalization spreads.
But by heeding the hard-won wisdom of trailblazers like Colorado and California – keeping taxes reasonable, prioritizing equity, and letting the market work – states can lay the foundation for a cannabis industry that is built to last. The road may be rocky, but with smart, forward-thinking policy, the future of legal cannabis is bright.
SOURCES:
[1] https://taxfoundation.org/state-cannabis-taxes-2022/
[2] https://www.politico.com/news/2023/06/09/colorado-cannabis-market-crash-cautionary-tale-00101170
THE RACE TO THE BOTTOM, READ ON…
Cannabis News
America’s Constitutional Conundrum: Guns and Ganja
Published
1 day agoon
January 21, 2025By
admin
Of Guns and Ganja: America’s Constitutional Conundrum
If there’s one thing America is famous for, it’s guns – and lots of ’em! In the land of the free and home of the brave, firearms aren’t just a right, they’re practically a national pastime. With over 400 million firearms floating around a nation of 330 million people, it’s safe to say that guns are as American as apple pie and baseball.
But you know what else Americans love? Drugs. The US remains the world’s largest drug market, with an particularly passionate affair with cannabis. Mary Jane has come a long way since the “Just Say No” propaganda of the D.A.R.E. days. Now, millions of Americans legally light up in their home states, transforming from “criminals” to “consumers” faster than you can say “tax revenue.”
Here’s where things get sticky though. Despite the Biden administration’s vague promises of reform, cannabis remains stubbornly classified as a Schedule I substance at the federal level. This creates a peculiar predicament for freedom-loving Americans who appreciate both their Second Amendment rights and their evening toke.
You see, there’s this obscure interpretation of federal law that says if you consume cannabis – even legally in your state – you’re technically not allowed to own firearms. Let that sink in for a moment: in a country with more guns than people, where cannabis is legally sold in most states, you’re forced to choose between your constitutional right to bear arms and your state-sanctioned right to consume a plant.
As you might imagine, telling Americans they can’t have their guns AND their ganja isn’t exactly going over well. It’s a uniquely American saga that pits state rights against federal law, personal freedom against bureaucratic overreach, and common sense against, well… whatever you’d call this situation.
Let’s dive into this bizarre legal battleground where constitutional rights and cannabis collide.
As America’s cannabis landscape evolves, we’re witnessing a fascinating legal tug-of-war between state sovereignty and federal authority. The latest battleground? The constitutional rights of cannabis consumers to bear arms.
In a groundbreaking decision, the U.S. Court of Appeals for the Fifth Circuit recently reaffirmed that banning occasional marijuana users from owning firearms is unconstitutional. The case, known as U.S. v. Daniels, centers around a man who was sentenced to four years in prison after police found trace amounts of cannabis and firearms during a routine traffic stop. Talk about wrong place, wrong time!
The federal government, particularly under the Biden administration, has been performing some impressive mental gymnastics to justify their position. Their argument? Cannabis users with guns “endanger public safety,” “pose a greater risk of suicide,” and are more likely to commit crimes “to fund their drug habit.” They’ve even argued that cannabis consumers are “unlikely to store their weapons properly.” I guess they never met my ex-military uncle who meticulously organizes his gun safe while enjoying his evening edible.
But here’s where it gets really interesting. The Department of Justice claims the restriction is perfectly constitutional because it aligns with the nation’s history of disarming “dangerous” individuals. They’re essentially putting cannabis users in the same category as folks with domestic violence restraining orders. As someone who’s spent considerable time around both cannabis users and domestic abusers (professionally, of course), I can tell you there’s a slight difference in temperament.
The courts, however, aren’t buying it. As the Fifth Circuit pointed out, the government failed to prove that Daniels was “presently or even regularly intoxicated at the time of arrest.” They noted that even if the government had proven frequent intoxication, they offered “no Founding-era law or practice of disarming ordinary citizens ‘even if their intoxication was routine.'”
The ruling doesn’t completely invalidate the federal statute (known as § 922(g)(3)), but it does expose its shaky constitutional foundation. As the court stated, “This is not a windfall for defendants charged under § 922(g)(3),” but rather a recognition that the government’s enforcement approach is fundamentally flawed.
Meanwhile, the National Rifle Association (NRA) – not exactly known for their progressive stance on substances – acknowledges the absurdity of the situation. They point out that “marijuana use is no longer limited to the domain of indigenous religious customs or youth-oriented counterculture and now includes a wide variety of people who use it for medicinal or recreational reasons.” When even the NRA is suggesting your gun control measure might be a bit extreme, you know something’s amiss.
The result of all this legal wrangling? A patchwork of confusion where state-legal cannabis users must choose between their Second Amendment rights and their medicine or recreational preference. It’s a prime example of how federal prohibition creates more problems than it solves, forcing otherwise law-abiding citizens to become unwitting criminals simply for exercising multiple legal rights simultaneously.
Welcome to America, folks, where you can have your guns or your ganja, but apparently not both – at least until the courts finish sorting out this constitutional cannabis conundrum.
Let me be blunt – we’re caught in a classic American political pretzel. The Biden administration dangles the carrot of rescheduling cannabis to Schedule III, making vague promises that sound good on the campaign trail but do little to address the fundamental issues plaguing cannabis consumers, including their right to bear arms.
While some celebrate these baby steps toward reform, I’ve been around this block enough times to know that rescheduling is like putting a Band-Aid on a bullet wound. It might stop some bleeding, but it doesn’t address the underlying trauma. The gun rights issue is just one of many complications that arise from cannabis’s continued inclusion in the Controlled Substances Act (CSA).
Here’s the uncomfortable truth: there’s only one real solution, and it runs straight through the halls of Congress. The same body that created this mess with the CSA in 1971 is the only one with the power to truly fix it. Congress needs to completely remove cannabis from the CSA – not reschedule it, not modify its status, but fully deschedule it.
Think about it. Rescheduling to Schedule III would still leave cannabis in a weird legal limbo. Sure, it might make research easier and give Big Pharma more room to play, but what about the millions of Americans who use cannabis medicinally or recreationally in their state-legal markets? They’d still be federal criminals, still banned from purchasing firearms, still caught in the crossfire between state and federal law.
The only path forward is complete removal from the CSA, coupled with a federal framework that respects state markets while establishing basic national standards. This would resolve the gun rights issue overnight – no more choosing between your Second Amendment rights and your medicine or recreational preference.
Would I love to see Congress completely overhaul the CSA? Absolutely. The entire scheduling system is based on outdated science and political theater rather than actual harm reduction principles. But let’s be realistic – that’s about as likely as finding bipartisan agreement on… well, anything these days.
Instead, we need to focus on what’s achievable: complete cannabis descheduling. This isn’t just about guns and ganja – it’s about fixing a broken system that’s created countless legal paradoxes and unnecessary criminal penalties. It’s about acknowledging that the emperor has no clothes, that cannabis prohibition has failed, and that it’s time to move forward with a sensible federal policy.
Until Congress acts, we’ll continue to see these legal battles play out in courts across the country, watching judges try to reconcile constitutional rights with outdated federal drug laws. It’s a waste of judicial resources, taxpayer money, and most importantly, it’s a waste of Americans’ time and freedom.
The solution is clear. The only question is: how many more Americans need to get caught in this legal crossfire before Congress finally does its job?
Inspiration:
https://www.marijuanamoment.net/federal-court-reaffirms-that-ban-
on-gun-ownership-for-people-who-occasionally-use-marijuana-is-unconstitutional/
https://www.marijuanamoment.net/nra-says-federal-ban-on-
marijuana-amid-state-level-legalization-has-created-confusing-legal-landscape-for-gun-owners/
CANNABIS AND GUN RIGHTS, READ ON…
Cannabis News
MLK Day 2025: Cannabis and Civil Rights
Published
2 days agoon
January 20, 2025By
admin
It’s MLK Day once again.
I’ve been writing an MLK Day post on this blog for eight consecutive years. The theme of my posts is that cannabis is a civil rights issue, and that Dr. King would have advocated for ending prohibition based on that fact.
Each year, I have demonstrated with facts (upon facts upon facts) that the War on Drugs continues in insidious ways. In, 2023, which is the most recent year that FBI data is available, law enforcement officials made over 200,000 arrests for marijuana-related convictions. Those 200,000 arrests constitute roughly 25% of all drug-related arrests.
Sadly, arrests of black people constituted 29% of all drug arrests in 2023, although only 13.6% of Americans are black.
Heading into MLK Day weekend, President Biden announced that he is commuting the sentences of nearly 2,500 people convicted of non-violent drug offenses. The focus was predominantly on individuals “who received lengthy sentences based on discredited distinctions between crack and powder cocaine…”, as opposed to cannabis-related crimes. According to the Last Prisoner Project, “the total number of those incarcerated for cannabis who received commutations is not knows, but nine LPP constituents will be free.”
For all that Biden promised as to cannabis, it’s the least we could have asked. Under the new Trump administration, attention will quickly return to the frustrating marijuana rescheduling process. If cannabis ends up on Schedule III, criminal penalties for traffickers may soften, but make no mistake: possessing and distributing cannabis will still be a federal crime.
At the state level, where most arrest occur, progress has slowed in the last few years. Out here where I live in Oregon, with our 800 cannabis stores, it’s astonishing to think of 200,000 annual cannabis arrests– most for simple possession, no less.
There is a lot of work to do. Here are a short list of organizations if you’d like to get involved:
For prior posts in this series:
Cannabis News
No Smoking, No Vaping – What’s the Safest Way to Consume Cannabis Based on Your Genetics and Science?
Published
2 days agoon
January 20, 2025By
admin
The Safest Way To Consume Cannabis For Health, According To Science and Genetics
Marijuana legalization continues to help thousands of people.
Most especially those who need marijuana to treat conditions in a safer, more natural, and more cost-effective manner compared to pricey, addictive, and dangerous pharmaceutical medications. That said, not all weed is made the same: depending on where you get your weed, some of it may be grown using pesticides, which can be bad for your health especially when smoked. So yes, it does matter what kind of weed you’re smoking and where you got it from.
In addition, not all methods of consumption are also the same. Many consumers, particularly extremely health-conscious individuals, prefer not to smoke weed. Smoking weed that’s been grown with pesticides can also be dangerous for one’s health. It’s especially not recommended if you are immunocompromised,
That’s why a growing number of consumers prefer to explore the variety of other consumption methods available these days, such as edibles, tinctures, beverages, and cannabis oil to name a few.
Now, the results of a new study have just been published, suggesting that cannabis oil extracts may be the safest way to consume weed. Researchers studied MCT oils that contained high concentrations of CBD with some THC.
“Several studies have found damage to various chromosomal associated with cannabinoid use,” said the researchers. “Considering numerous studies demonstrating the genotoxicity of cannabis, it is noteworthy that many of these investigations have focused on individuals who consume cannabis through smoking or in cigarette form, normally rich in THC,” they said.
The researchers specifically found that extracts of cannabis sativa don’t exhibit genotoxic or mutagenic potential in doses that are commonly used by patients to manage anxiety, pain, epilepsy, and other conditions. “Although the current literature on cannabis sativa extract remains inconsistent, most evidence suggests that these extracts are safe for cells and DNA under both acute and chronic experimental conditions, even at high doses, in studies involving both male and female animals,” wrote the researchers.
Some consumers were alarmed recently when studies, albeit weak in nature, were published, which suggested that cannabis smoke had the potential to be genotoxic. That said, it still isn’t recommended for individuals who may be immunocompromised but there is no strong evidence that cannabis can indeed cause genetic mutations.
Since oral consumption of cannabis oil bypasses the respiratory system and allows patients a more accurate way to dose, it’s become the preferred method of consumption for many medical cannabis patients. Whether you’re young or old, the safety profile of cannabis oil has been proven; this is especially true if you wish to avoid respiratory harm.
The Role Of Quality Cannabis In Health
As cannabis consumers, there are many ways you can ensure that you’re medicating with clean, safe cannabis that’s free from dangerous contaminants. Pesticides aren’t the only contaminants to be aware of; street cannabis sold by dealers can be laced with toxic additives and even fatal ingredients, such as in the notorious case of the tainted THC vapes containing Vitamin E acetate. Other undesirable ingredients to take note of include residual solvents and heavy metals.
It’s also your role as a consumer to do research about the quality of cannabis you buy. Of course, it makes sense to only buy from licensed cannabis dispensaries since they can easily supply laboratory-tested cannabis products. From edibles to oils, flowers and more, licensed dispensaries can provide products that have a Certificate of Analysis or COA, which can either be printed on the packaging itself, accessed online, or via a QR code. A cannabis product with a COA can give you peace of mind that the product meets stringent testing and quality standards.
In addition, you can also seek out certified organic cannabis products. Of course, the fact that cannabis still isn’t federally legal means that there is nothing similar to a USDA Organic certification for weed, though some manufacturers make it easier for consumers these days to know if they are buying organic or not. For example, if you live in California, you can look for Clean Green Certified or OCal (weed that has been grown in standard that are comparable to organic).
Conclusion
If you are older or have pre-existing medical conditions, the best way to medicate with marijuana is by taking cannabis oil orally. It’s also extremely versatile, since it can be used to treat an array of conditions ranging from nausea to chronic pain, headaches, muscle pain, and so much more. While it may have reduced bioavailability compared to smoking, cannabis oil extracts do provide fairly quick relief for several conditions.
Smoking weed in any form, whether by flower, vape oil, or concentrates, should be avoided or limited altogether. There are also other potential consumption methods that are safer and more suitable for the immunocompromised, such as sprays, edibles, and topicals.
It also helps to carefully consider the type of cannabinoids you are consuming. For patients that need to medicate during the daytime, CBD or high-CBD products are always preferred. One must be careful with THC especially if you are older, operate machinery, or have no previous experience with psychoactive drugs. Always start with the lowest dose possible, and work your way to a higher dose slowly.
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