Colorado Springs 2011 MMJ Industry Overview

Sorry for missing a post in January. 2011 has been busy beyond belief so far and multiple movements are happening on multiple fronts. I am managing a new medical cannabis center known as NaturaLeaf and have been working hard to design patient oriented offerings and services. I am implementing our promotion along patient, not product lines and hope to help many sick people have access to medical cannabis.

In 2011, some major factors will shape the industry and define the medical cannabis market in the only state that allows for-profit MMJ centers. The biggest affecting factor is State legislative power in the Department of Revenue and Medical Marijuana Enforcement Division. These administrative powers allow the MMED to create and enforce any rule they deem necessary. The problem with these rules is they are based on Amendment 20 models originally intended to be small and residential in scale and do not take into effect commercial needs. They propose the State creates a $4 million dollar database meant to track every patient, sale, and plant in addition to strict production limitations.

To save tax payer money, protect patient privacy, and implement a more logical approach, I wrote the MMED a few letters. In them, I describe how tracking plants is illusionary to regulating finished weight. If one center yields 1oz from a plant and another 6oz, what is being regulated in a per plant limit? Only finished cannabis has any use or market value anyway so the number of plants becomes secondary to the weight of final yields. This is how other agricultural models are regulated.

The other concern from our CSMCC members at the first member breakfast meeting was that of patient privacy. Patients do not want to feel like parolees and should not have to have records on their number of purchases, video surveillance on every visit, and a statewide tracking database available to law enforcement. Pharmacy companies are not required to do so with their patients for every pill a patient is prescribed.

Finally, I argued for the delivery of medication to non-designated homebound patients. Many times chemotherapy, surgeries, and other health ailments may make it impossible for patients to commute to a medical cannabis center. It is imperative that centers be able to care for their temporarily homebound patients during the most difficult times of their lives.

In addition to these regulatory threats, the industry is also facing a change in political power in Colorado Springs. Many city council members are moving on and will be replaced by 5 of 15 candidates running for election. Additionally, the strong mayor form of government is coming into effect and the new mayor will have much more decision power in our local government. As soon as the new city council is elected, they will be making decisions on the licensing regulation we set into motion over a year ago. Already, we’ve begun educating these candidates through CSMCC sponsored tours. Many of them have asked for our help in gathering signatures for their campaign and we’ve been happy to help.

It is very important that the right candidate take office to ensure the positive MMJ business environment promised by the existing city leadership. Politically, this gives many council members the opportunity to wash their hands of any negative results should the new leadership decide a different direction for MMJ patients and business.

Another big concern is Medical Marijuana Criminal Enforcement Division, also known as the MMED. This regulatory enforcement agency has already looked at a few centers in town and some raids have occurred. For the majority, compliance will be a big concern as these enforcers will be holding businesses to 100 pages of emergency regulatory rules come March 1. This is the expected deadline of the state for center to begin full compliance.

Those not meeting the standard will be punished as outlined in the new rules with heavier penalties for multiple offenses. Additionally, owners and registered managers will be subject to criminal charges if out of compliance.

These measures are all moving Colorado toward the forefront of medical cannabis business in the US. These models may be repeated as additional states pass similar legislation and it is exciting to be a part of new market progression. Many patients are benefiting and many jobs are being created. By July, new market entrants will join and invest heavily in State compliance and new or expanding operations. Expect the market to change as businesses adapt to survive and thrive against these new forces. Already competition has driven the commodity price of cannabis down to around $2500 per pound and this should continue to drop as businesses go under and supply lines are efficiently optimized.

Overall, these forces will help mold the new MMJ industry into a functionable and complaint industry under full taxation and monitoring. As these steps are taken, expect the first round of market entrants to die off as larger, more adept players step in to acquire and expand MMJ business. The largest threat to current market participants lies, as always, in the government imposing regulation with limitless power to do so. Centers would do well to label, market, and image themselves in accordance with voter’s intent and focus on patient wellness, and not necessarily the product we sell for patients.

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About markandmmj

I belong to a new generation of market pioneers in the fastest growing industry in Colorado today. As a double business major in international business and finance I’ve studied the economic viability of medical marijuana centers in Colorado Springs. I’ve learned firsthand the in and outs of this industry and what it takes to progressively move brand new markets forward. As Membership Director for the Colorado Springs Medical Cannabis Council, I have seen the industry in Colorado blossom despite countless economic, political, legislative, and social barriers. I strive to deliver objective truth about medical cannabis issues and their economic, social, and medical implications for Colorado.
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