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Colorado's Marijuana Dispensary Boom, Leads to Explosion of Patients Seeking Licenses

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Richard Collins doesn’t fit the profile of your typical stoner.

He’s 67 years old, a Marine Corps veteran, and he said he’s never had a brush with the law.

But you would be hard-pressed to find anyone who smokes more marijuana than this Montana native. He tokes “all day, every day,” to ease a host of ailments including depression, back pain, headaches and arthritis. For the better part of 50 years, Collins, an artist, bought his dope on the street, often from unsavory characters he calls “crooks.”

Last year, he joined about 125,000 Colorado residents in the state’s booming medical marijuana program. Once a week, he drives 12 miles to Denver from his home in suburban Lakewood to buy his marijuana at Cannabis Medical Technology, housed in a brown stucco building near the Colorado Democratic Party headquarters in the city’s bustling Arts District.

“I never thought I’d see the day I’d be doing this,” said Collins, who bought one quarter ounce of marijuana and three blunts for $120 with a credit card. “I’m not going to apologize for smoking marijuana. I think it’s wonderful. I’m a good citizen. In the end, I’m legal.”

Colorado is one of 15 states, including Rhode Island, that have legalized the use of marijuana to treat certain medical conditions.

So far, just two of those states, Colorado and New Mexico, have state-regulated dispensaries that are legally selling marijuana. Maine is about to become the third — the first on the East Coast — and Rhode Island will soon join in.

On Tuesday, the Rhode Island Health Department is scheduled to select up to three applicants to open Rhode Island’s first marijuana dispensaries. The decision was delayed a week, after the department’s interim director sought additional time to review the applications. The dispensaries may open for business sometime this spring. Rhode Island has more than 3,000 residents licensed to use medical marijuana.

Folks in Colorado snicker when they hear that Rhode Island is allowing only three dispensaries, and they predict that their owners will become millionaires. Denver alone, the state’s capital and largest city with a population of more than 600,000, has 251 dispensaries and there are about 700 more scattered across this vast state of 5 million people.

The city is so saturated with marijuana shops that their owners are struggling to make ends meet. They also complain about high regulatory fees and taxes — on the state and local levels — that have dramatically increased the cost of doing business after the dispensary industry got off to a freewheeling start in the last year and a half. Meanwhile, new laws and ordinances have been passed that restrict where the dispensaries and cultivation sites can operate.

The new laws also require more security, including a camera over the sales counter of the businesses to record each transaction, and a requirement that each store grow at least 70 percent of its marijuana.

“There’s a lack of privacy. Too much scrutiny,” said Lori Cookston, co-owner of Cannabis Medical Technology. “Basically, everybody is just going to go back underground.”

What’s most striking about Denver, a sprawling city known as a railway hub with connections to the West Coast, is how normal the medical marijuana industry seems. Most of the dispensaries are small storefronts that could easily pass as yoga centers or walk-in medical clinics. Many have benign names such as Nature’s Cure, MMP of Colorado, Pure Medical Dispensary and Ballpark Holistic Dispensary. It’s common to see on the business a green insignia with a medical cross similar to the one used by the Red Cross.

Some dispensaries are more aggressive in their advertising. On a recent afternoon, a young man in shorts and sunglasses stood at the busy corner of 44th and Tejon streets holding a 5-foot sign that cried out, “Now Open: Cannabis Co.” The sign included a green marijuana leaf and a large arrow directing motorists to the dispensary.

Westward, a glossy alternative weekly publication based in Denver, boasts 16 pages of advertisements for marijuana dispensaries, hydroponic grow systems and law firms specializing in compliance review.

Lori and Andy Cookston were trailblazers in Colorado’s medical marijuana world. In June 2006, they opened the first marijuana dispensary in Denver. They reviewed a ballot amendment approved by voters in 2000 that removed state criminal penalties on “the use, possession and cultivation” of marijuana by patients who have written recommendations from physicians that they might benefit from the drug.

The Cookstons had been caregivers, privately growing marijuana for about 10 patients. They determined that there was nothing in the law that said they couldn’t open their own marijuana dispensary. They went to City Hall and ran everything by the zoning, excise, licensing and treasury departments.

“There was no mention that it was illegal,” said Andy Cookston.

The Cookstons, who describe themselves as conservative Christian Republicans, got a Colorado sales tax license and opened for business in the same building where they run a successful graphics and lithograph business. They are serious about the medicinal values of marijuana.

Store manager Juan Diaz spends plenty of time with each customer. He wants to make sure that they are smoking or ingesting marijuana to address certain ailments, not simply pursuing a high for the sake of getting stoned. “Our focus is to provide a consistent product for our customers,” he said. “We put a lot of effort into that consistent product.

Andy Cookston has six 20-by-20-foot grow rooms in the building that houses the dispensary and graphics business. He said that smaller cultivation sites like his grow a better quality of drug, which he sells for anywhere from $250 to $400 an ounce. They grow 25 to 40 different strains of marijuana.

In the main showroom, the marijuana buds are kept in canning jars under a glass counter. The various strains have names such as Blueberry, Space Bomb and Pandora’s Box. Diaz, the manager, uses chopsticks to remove the buds from the jars for customers.

The Cookstons have about 200 regular patients, or customers, but it hasn’t been easy making a go of it. They said that they paid about $15,000 in regulatory fees to the city last year, and they anticipate that recently passed legislation will bump those fees up to $25,000 this year. They estimated that their net profit last year was about $15,000.

The proliferation of dispensaries has also cut into the Cookstons’ business. The explosion in centers happened almost overnight when the Obama administration announced in October 2009 that federal prosecutors would no longer prosecute dispensaries or marijuana patients in states where the drug had been legalized.

The marijuana centers began sprouting up in Denver and across Colorado, like ... well, weeds. The state had no regulatory authority over the dispensaries then, so officials did not have records as to how many had opened for business.

With the surge in dispensaries came the aftershocks of thousands of new patients.

According to figures from the Colorado Department of Public Health and Environment, about 1,000 patients a week are seeking licenses to participate in the medical marijuana program. The number of patients has ballooned from about 4,300 statewide in 2008 to about 125,000 today. Health department officials said there are about 1,000 physicians who have recommended patients for the program.

The patients pay the state an annual $90 registration fee, meaning that the state collects more than $11.2 million from those fees. Most of the new patients have come in the past three years. Last June, Gov. Bill Ritter signed into law two bills designed to slow down the dispensary boom and impose new regulations.

One of the new laws provides a regulatory framework for new and existing dispensaries. They must grow 70 percent of their marijuana, operate at least 1,000 feet from a school and owners must be state residents for at least two years. It also includes a provision that gives local communities the authority to ban or place “sensible and much needed controls” on the operation of the centers.

The second law requires physicians prescribing medical marijuana to perform physical exams on their patients and bars doctors from having “a financial relationship with a dispensary.”

The state also pounced on an opportunity to bring in much-needed revenue. The July 2010 fee structure to open a center is $7,500 for those with 1 to 300 patients; $12,500 for 301 to 500 patients; and $18,000 for 501 or more patients. Separate fees for cultivation and infused product sites — mostly baked goods that contain marijuana — are $1,250.

The state is in the process of setting annual renewal fees.

Department of Revenue figures show that the state collected $8.2 million in licensing fees for the fiscal year that ended June 30 and another $2.2 million in sales tax revenues from “the centers the department’s tax-collections staff knew about.” That’s a total of $10.4 million.

The new laws are designed to keep better track of the dispensaries and the potential tax revenue. They have required existing dispensary operators to apply to stay in business.

Last July 1, the Department of Revenue opened an application process for anyone interested in running a dispensary. There were 818 applications for centers, 321 for operating marijuana infused product businesses and 1,237 to establish marijuana cultivation sites. The window for submitting an application closed Aug. 1.

The state allowed the existing dispensaries to continue to operate without medical marijuana business licenses through June 30, 2011. After that, they must be authorized by the state or close. Dispensary owners, like the Cookstons, estimated that the new laws immediately shut down about 50 marijuana centers in Denver alone. Meanwhile, they predict, the new regulations will drive scores of other dispensaries out of business. Communities across the state are putting the brakes on the dispensary boom.

Last fall, voters in Loveland, a city of nearly 60,000 about 50 miles north of Denver, decided that the marijuana industry was not welcome in their community. On March 1, the city shut down all 21 of its dispensaries, in response to the ballot question.

Head south from downtown Denver and eventually you will end up on the city’s South Broadway, a busy four-lane commercial district dotted with antique shops, delis and hundreds of storefront businesses. This area is also known as Broadsterdam, ground zero for the competitive world of marijuana dispensaries.

Here, the centers unabashedly advertise marijuana and weekly specials. In a concentrated one-mile area stands THC, The Herbal Center; Little Green Pharmacy; Broadway Wellness; Wellspring Collective and Back to the Garden.

Amid all the dispensaries, which had few customers when a reporter visited, was Ganja Gourmet, with the logo above the door: “Our food is so good you need a license to eat it.” Inside, things were quiet on a recent afternoon.

Back in December 2009, business was thriving. Customers sat at the “Bud Bar,” smoked weed and ingested marijuana-infused delights such as Panama Red Pizza, $59; Vegan Potato Killer, $20; and Pot-Pot-Pie, $14. The dining area, complete with multiple framed photographs of Bob Marley and Mona Lisa smoking pot, had two high-powered ceiling fans going nonstop to suck the clouds of marijuana smoke outside.

A year ago, the state barred customers from smoking and eating marijuana products in the centers. That has been a huge blow to Ganja Gourmet, which bills itself as “America’s First Medical Marijuana Restaurant.”

“It was probably more fun when we were a full-service restaurant,” said owner Steve Horowitz. “It was really busy. It was really a trip.”

Horowitz, who grew up on Long Island, started smoking pot at age 17. He said it helped him cope with attention deficit disorder. Horowitz estimated that he sells about 5 to 6 pounds of marijuana a month, but he sees his business heading in another direction: He is expanding the sale of infused products, otherwise known as marijuana edibles. He wants dispensaries across the state to buy his brownies, almond horns, cookies and cheesecakes.

Dan and Clarice Hamme drove about 2½ hours from Buena Vista, Colo., to fill a cooler with $225 worth of Ganja Gourmet’s edible goodies to bring back to their dispensary, Natural Mystic Wellness Center. They make the 125-mile drive down to Ganja Gourmet twice a month to stock up on edibles for their customers.

“We are people who are trying to make this a legitimate business,” said Dan Hamme.

Still, there are other potential roadblocks. Two weeks ago, a Republican legislator introduced a bill to ban all edible marijuana products in the state. Her proposal came under immediate attack at the state capital, and she quickly pulled back, calling instead for better labeling on baked goods and other foods that contain the drug.

The law enforcement community also expressed its concerns. Sgt. Jim Gerhardt, who testified for the bill on behalf of the state Association of Chiefs of Police and Colorado Drug Investigators Association, said that students bring the drug-laced food and drinks into school and it’s impossible to know what they are ingesting.

The dispensaries are not the only legal source of medical marijuana. Patients or primary caregivers who have been issued medical marijuana cards may grow up to six marijuana plants and have up to two ounces in their possession. A spokesman for the Colorado Health Department said that the state does not track caregivers, but those in the marijuana industry estimate that the state has about 12,000 licensed growers.

Near downtown Denver, Jake Browne is the operations manager at The Releaf Center on 32nd Street, in the hip Highlands neighborhood that is dotted with colorful bungalows and eco-friendly townhouses. The shop has gleaming wood floors and a bulletproof-glass customer window surrounded by steel-reinforced walls.

About 40 plants are growing in a small room within the two-story building and another 72 plants in an off-site warehouse. Browne said the shop sells a high grade of marijuana for about $325 an ounce and business has been good. The business has about 260 customers and sells 16 to 18 pounds of marijuana a month.

He said that a lot of money was spent to renovate the building and no shortcuts were taken when it comes to security.

“We knew we had to go above and beyond being compliant,” Browne said. “If you get into this industry and you’re going to play by half the rules, you’re not going to be playing.”

The police have not had major problems with the dispensaries. Statistics from the Denver police show that reported criminal offenses decreased by 3.7 percent in 1,000-foot areas surrounding medical marijuana centers. The figures compared reported crimes in December 2009 to December 2008.

The police warn that the world of marijuana dispensaries is so new that it’s difficult to study any trends or draw conclusions about their impact on crime.

It’s another world in Nederland, a tiny mountain town about 50 miles northwest of Denver. The majestic burg sits at more than 8,200 feet at the foothills of Indian Peaks Wilderness and Rocky Mountain National Park. In recent years, it has become a commuter home for folks who work at the University of Colorado in Boulder or in the thriving tech industry between Denver and Boulder. Others telecommute through their home computers and enjoy the spectacular backdrop of the snowcapped peaks.

Nederland also has a long history of being accepting of marijuana.

Last April, the town became the first in Colorado to legalize the sale, purchase, possession, consumption, transportation, cultivation, manufacturing and dispensing of marijuana to anyone at least 21 years old. Voters approved the ballot initiative by 41 votes — 259 to 218.

On a recent Tuesday morning, Mayor Sumaya Abu-Haidar hosted her weekly meeting with the locals at New Moon Bakery Café & Espresso Bar, next to the barn-like town hall. She talked about the town’s five marijuana dispensaries.

“It has generated a lot of lively debate in our community,” she said. “There has always been a lot of marijuana here on an illegal basis.”

Abu-Haidar, a Dartmouth grad who earned a doctorate in education from the University of Colorado, said there are concerns among some residents about children having access to medicinal marijuana that their parents may be using. But, for the most part, there has been little opposition to the fledgling industry.

At last month’s town board of trustees meeting, resident Randy Lee said that he didn’t have a problem with the legalization of medical marijuana, but he “doesn’t want to smell it,” and he wondered whether shoppers may feel the same way and avoid the Nederland business district.

Koby Malone grew up in Nederland and she runs Nedicate, a small dispensary just around the corner from town hall. The store opened in January 2010 and now has about 65 regular patients who stop in for various strains of marijuana, edibles and oil-based marijuana products. She said that the store sells about 3½ to 4 pounds of marijuana a month.

She said that she and the others who run the business keep close tabs on the legislation and regulations coming out of the state capital in Denver.

“We are worried about everything,” she said. “We just keep truckin’ until we get the flash.”

Mayor Abu-Haidar said that the dispensaries have been good for the town coffers. She estimated that 10 percent of last year’s revenues came from marijuana sales. The town also charges the dispensaries an initial licensing fee of $5,000 and an annual renewal fee of $1,500.

“Medical marijuana is part of our economic development at this point,” she said.

Town tax records show that medical marijuana generated $75,811 in sales taxes for the town last year, a significant jump from the $19,990 in taxes in 2009. The jump is significant, considering the total tax revenues for the town last year were $760,516.

Police Chief Ken Robinson said that the dispensaries and marijuana use are not major concerns in Nederland. In terms of priorities, he said that the use of marijuana is a distant third behind response to calls and traffic safety. Sure, if someone files a complaint about illegal marijuana trafficking or growing, his three-member police force will investigate, but they are not in the business of launching undercover marijuana investigations.

Robinson, who was a police officer in Tempe, Ariz., for more than 30 years before coming to Nederland, said that alcohol abuse is a much bigger problem.

“I don’t ever remember going to a house where people are beating each other up because they just smoked marijuana,” he said. “Marijuana should have been decriminalized a long time ago.”

BY THE NUMBERSMedical marijuana in Colorado


6 million

State population


Licensed marijuana patients. About 1,000 a week are applying for licenses


Participating physicians





Applications for running cultivation sites


Applications for running marijuana-infused bakeries


$20 million

Taxes, regulatory fees, licensing fees collected by the state

News Hawk- Jacob Husky 420 MAGAZINE
Source: projo.com
Author: W. Zachary Malinowski
Contact: Contact Us
Copyright: The Providence Journal Co
Website: Colorado’s marijuana dispensary boom, now undergoing regulation, leads to explosion of patients seeking licenses
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