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RODIpure


Registered: 05/28/10
Posts: 274
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Where are all the marijuana millionaires? - CNN
#14228340 - 04/02/11 09:12 PM (12 years, 9 months ago) |
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Where are all the marijuana millionaires?
FORT COLLINS, Colo. -- When Drew Brown first opened Abundant Healing, a medical marijuana dispensary that serves nearly 300 patients, he dreamed of early retirement to Costa Rica, where he would spend his days as a beach bum renting surfboards to tourists.
Then came a regulatory crackdown. Fifteen months later, Brown's business -- mired in red tape and compliance costs -- isn't the moneyspinner he imagined it would be.
"I made more money doing concrete," says Brown. A former construction worker and oil rig roughneck, he and his business partner Dave Schwaab are among the thousands of Coloradans who jumped into the legal pot business in late 2009.
That's when the U.S. Department of Justice ordered federal prosecutors to lay off busting such businesses where they're legal under state laws -- sparking a Renaissance/gold rush.
Marijuana's use by qualifying patients had been quasi-legal in Colorado for almost a decade, since voters amended the state constitution in 2000 to allow it. But there were no statewide regulations governing its sale and distribution. The federal ban still trumps Colorado's state law, but enforcement was light. The rapidly expanding market seemed to promise piles of easy money.
Then in 2010 Colorado tightened the screws. New laws imposed tough and often expensive standards on how business could run. Suddenly owning a pot dispensary -- officially called a Medical Marijuana Center, or MMC -- became no more profitable than owning a liquor store.
The new rules include minimum distance requirements between MMCs and sensitive community areas like schools and churches; a minimum two-year residency requirement for MMC owners; restrictions on felons working at or owning MMCs; and detailed control measures for every seed grown and every ounce of bud sold throughout the state.
Regulations adopted just this month include detailed surveillance requirements at dispensaries and meticulous inventory tracking. A bill introduced in the state legislature threatened to ban the sale of edible marijuana products like pot brownies -- bestsellers that shop owners rely on -- before patient outcry convinced the sponsor to drop the measure.
Perhaps worst of all for business owners is a provision that allows local communities to adopt even stricter standards than the state, including outright bans. With each new election, dispensary owners must worry about whether they will be voted out of business.
March 1, for example, was the deadline for pot shops in the city of Loveland to close down, following November's vote to ban them from within city limits. A handful of MMCs sued the city, setting up the possibility of a trial to determine if such measures are compatible with the state constitution.
Such an unpredictable business environment makes it tricky to plan for the future. Minting millions is no longer many pot-shop owners' immediate goal. They're simply struggling to survive.
"The uncertainty is killing us," Schwaab says.
Abundant Healing is one of 23 MMCs in Fort Collins, a college town of 145,000. Brown and Schwaab have yet to earn back their $150,000 investment in the business. Depending on how sales go, they each take home between $2,000 and $4,000 per month.
Their situation isn't unique. Dispensary owners in Denver, which has the highest concentration of marijuana operations, laugh at the perception that they're raking in dough. Erik Santus, who owns two Lotus Medical locations in Denver and Boulder, said that when he opened the doors in October 2009, his businesses experienced 50% to 100% revenue growth month-over-month for the first several months of operation. Now, he says, 6% to 8% growth is considered healthy, with many shops "just making enough to survive."
It's a transition not every operator was prepared for.
"A year and a half ago, you just had to have a door and be open for business in order to have a business," says Elizabeth Robinson, the CEO of a medical marijuana-focused public relations company, Grow Room Communications. "But any time something goes from being a movement to being an industry, there are growing pains. All these regulations are par for the course, for any business."
Many medical marijuana advocates applaud Colorado for seeking to manage an industry that other states have tried to quash. Of the 15 states that allow the medical use of marijuana, Colorado is the only one with a government-sanctioned, for-profit distribution model up and running.
But some of the field's entrepreneurs complain that the state has over-reached.
Regulators have an eye on every step of the growing, manufacturing and sales process, and the state has imposed a rigorous and expensive licensure system. Depending on the number of patients MMCs serve, initial licensing fees run from $7,500 to $18,000. New rules call for centers to grow at least 70% of the pot they sell. That requires an additional one-time $1,250 cultivation license -- plus a capital investment for warehouse rental, growing equipment and security expenses.
The requirement was adopted so that regulators can account for the pot being sold and ensure it's not being diverted to the black market. But for dispensary owners, the so-called 70% rule carries the risk of a catastrophic crop failure wiping out a shop's supply, which would doom many businesses.
Background checks are another bottleneck. The state is currently conducting more than 4,000 investigations on 2,376 business applications, according to Julie Postlethwait, spokeswoman for the Medical Marijuana Enforcement Division of the state Department of Revenue. Applicants must be vetted through some 20 databases to check everything from their criminal records to whether they're current on their taxes and child support payments. Each must be individually interviewed. The department has until July 1 to work through its backlog -- and until then, no more applications are being accepted. The moratorium on new businesses may also be extended.
"Our industry is regulated more than any other industry in Colorado, by far," says Rob Corry Jr., a lawyer specializing in medical marijuana who is representing the MMCs suing Loveland. "It's much easier to become a lawyer than a dispensary owner, in terms of barriers to entry. We've got these tight, tight regulations and it threatens to crush us, at least on the legitimate side."
Still, Brown and Schwaab see the contraction as a natural shaking-out period for a nascent industry -- one unique in U.S. history, since its primary commodity remains illegal under federal law.
They just hope they can survive it.
"We're in this for the long haul," Schwaab said. "I think a lot of people who got into the business calculated the pounds of marijuana they could grow and didn't anticipate normal business costs. Our margins are no different than any other retail business.
"If we're able to continue as we have been, we'll make a reasonable living," he added. "We won't be making the huge dollars that everyone thinks we're making."
http://money.cnn.com/2011/03/29/smallbusiness/marijuana_millionaires/index.htm?hpt=T2
Mod edit: Added missing text (Please include text in addition the link when posting a story.)
Edited by veggie (04/02/11 09:45 PM)
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MidRange
Stranger
Registered: 01/10/11
Posts: 296
Last seen: 9 years, 3 days
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Re: Where are all the marijuana millionaires? - CNN [Re: RODIpure]
#14228471 - 04/02/11 09:37 PM (12 years, 9 months ago) |
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Serious, are they expecting people to get in the black so soon? Its a old business changing models and they need time to streamline and organize. Plus its not free market, so its even worse for them. They have so many laws to follow, and such a little customer base. We need to play some medical cannabis ads on the TV. Fucking Ad Council get your ass to work, start telling kids that cannabis is bad, and then next ad break tell them that it can help with a hundred different things which their parents or family suffer from.
-------------------- "Sacrifice is the Christian way of life. Theft is the Socialist way of achieving all ends. Together they represent an awesome evil for this nation to confront." Marc Emery. People who receive medical cannabis trough the federal government.
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Clamence
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Registered: 09/26/10
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Re: Where are all the marijuana millionaires? - CNN [Re: RODIpure]
#14228765 - 04/02/11 10:41 PM (12 years, 9 months ago) |
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Quote:
Regulations adopted just this month include detailed surveillance requirements at dispensaries and meticulous inventory tracking. A bill introduced in the state legislature threatened to ban the sale of edible marijuana products like pot brownies -- bestsellers that shop owners rely on -- before patient outcry convinced the sponsor to drop the measure.
How bizarre? I thought one of the main arguments against medical was that medicine CANNOT be something you smoke, and since cultural norms seem to reflect that cannabis is consumed through smoking it therefore cannot be medicine. It really is hard to take people seriously if they say this with one breath and then want to ban medical facilities from providing an alternative preparation with the next. Absurdity: something everyone should attempt to understand and accept to survive in the twenty first century.
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adamantasaurus
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Registered: 04/22/10
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Re: Where are all the marijuana millionaires? - CNN [Re: Clamence]
#14230004 - 04/03/11 06:19 AM (12 years, 9 months ago) |
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Quote:
Clamence said:
How bizarre? I thought one of the main arguments against medical was that medicine CANNOT be something you smoke, and since cultural norms seem to reflect that cannabis is consumed through smoking it therefore cannot be medicine. It really is hard to take people seriously if they say this with one breath and then want to ban medical facilities from providing an alternative preparation with the next. Absurdity: something everyone should attempt to understand and accept to survive in the twenty first century.
Medicine should not be smoked the cons outweigh the pros. Lowered immune system, rotting teeth, bad breath, tar lungs, etc. I think if a person is going to use cannabis as medicine they should set an example for everyone else and stop smoking it show them that it is medicine and that argument will be thrown out the window.
That's my opinion/idea
But about them banning the edibles?!?!?! That is really retarded I really wish people would just wake the hell up already and realize how far the stick is really shoved up their ass!!!!
Edited by adamantasaurus (04/03/11 06:22 AM)
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shroom_boom
boomer


Registered: 03/28/11
Posts: 61
Loc: michigan
Last seen: 10 years, 10 months
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Re: Where are all the marijuana millionaires? - CNN [Re: RODIpure]
#14230012 - 04/03/11 06:26 AM (12 years, 9 months ago) |
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why is it that every state is trying to cut its own penis off here medical marijuana is the only growing industry in most states bringing in tax dollars for everyone and here in Michigan where everyday on the news you hear about something else getting cut from the budget like schools not the most logical first choice but in Detroit more and more schools are closing year along with unemployment and the state of our states infrastructure Michigan isn't much more than a third world country and oh yeah there cutting our states unemployment as well but yeah lets keep trying to stomp out the only growing industry bringing jobs and tax dollars in really nice government really nice
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MidRange
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Registered: 01/10/11
Posts: 296
Last seen: 9 years, 3 days
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Re: Where are all the marijuana millionaires? - CNN [Re: shroom_boom]
#14231257 - 04/03/11 01:53 PM (12 years, 9 months ago) |
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Quote:
shroom_boom said: why is it that every state is trying to cut its own penis off here medical marijuana is the only growing industry in most states bringing in tax dollars for everyone and here in Michigan where everyday on the news you hear about something else getting cut from the budget like schools not the most logical first choice but in Detroit more and more schools are closing year along with unemployment and the state of our states infrastructure Michigan isn't much more than a third world country and oh yeah there cutting our states unemployment as well but yeah lets keep trying to stomp out the only growing industry bringing jobs and tax dollars in really nice government really nice
The beast has become too big. It can no longer consume enough to stay a live.
-------------------- "Sacrifice is the Christian way of life. Theft is the Socialist way of achieving all ends. Together they represent an awesome evil for this nation to confront." Marc Emery. People who receive medical cannabis trough the federal government.
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