Big Red Car here. So The Boss was in Colorado, Steamboat Springs to be exact, just when the legalization of recreational marijuana took effect, locally known as Green Wednesday.
Does the idea of stoned snowboarders worry you? Uhhh, guess not since — as someone pointed out — it is likely this is NOT a changed condition.
In any event, I apologize for using the word “stoned” as that may be interpreted as a pejorative term and that is not fair given that the use of marijuana in Colorado is not only condoned, it is perfectly legal. Folks should not be ridiculed for engaging in perfectly legal behavior.
Handy facts
So The Boss has conducted some research, some first hand on the ground research. [No, The Boss has not actually been smoking weed in Colorado but remember, as I have already said, it is now perfectly legal so it would be no big thing if he did.]
So Colorado morphed from legal medical marijuana — camels’ nose under the tent some might say — to perfectly legal recreational marijuana. Above, you can see what it looks like up close. No stems, no seeds, just buds. Just a high quality agricultural product and nothing more.
A Colorado native can buy up to one ounce per day while a visitor can only buy a quarter ounce per day. There has been some discussion that a Coloradan could buy an ounce per day per location. But who really knows?
The packaging seems to have settled in at 1/8 ounce of marijuana which appears to be a handy size given the price constraints. This is about a $50-65/package (1/8 ounce packaging) and there is a bit of confusion as to whether that is before or after taxes.
The pricing algorithm got sorted out pretty damn quick — $400/ounce is the going rate as of day 3 of the experiment. This is a bit more pricey than the previously prevailing $200-250/ounce prevailing price for medical marijuana. Medical marijuana continues to trade at a bit of a discount to street legal weed.
Take all of this pricing information with a grain of salt because everyone is feeling their way through the demand side of the equation which appears to be fairly robust.
Taxes? Did you say something about taxes? Well, the State of Colorado is collecting a sales tax of 25% (well, technically, that is a 15% excise tax and a 10% sales tax) on each sale. Chaching, State of Colorado! Colorado expects to collect approximately $70MM in new taxes.
There are those who might meanly opine that $70MM of new revenue may be dwarfed by the actual cost of the growth of the social safety net in Colorado but let’s not dampen our short term enthusiasm.
Pricing equilibrium — a short term fleeting concept — will sort itself out shortly.
Considerations
You have to be 21 years old to legally buy marijuana in Colorado and you cannot smoke it in public. The notion that your older brother might just be willing to buy you a bit of marijuana or that a native might be willing to be a strawman for a tourist is not a foreign concept already. Coloradans are friendly folks, no?
One of the oddest things about marijuana is the notion that introducing a carcinogenic hot smoke into your lungs as a delivery mechanism may not completely healthy. One aging hippy was noted to have said — “Hell, marijuana smoking is worse than cigarette smoking.” Really? A health hazard? Nahhhh. Use sun screen?
There seems to be some considerable speculation that criminal elements may try to compete solely on price. This would be tantamount to bootlegged cigarettes which are justified on the basis of a bit of tax avoidance. The public is considered to be fairly flexible as to where they obtain their marijuana and to patronize an otherwise local business seems quite plausible.
In any event, the price of marijuana is going to have some considerable impact on demand and those economists who are willing to provide a superior price point may do well. We shall see.
From an operational perspective the term “one hit high” pertaining to the qualitative aspects of specific strains of marijuana seems to applaud the potency of modern marijuana and its THC content. This indicates that it only takes a single hit to get, well, high?
The banks will not handle deposits or give checking accounts to marijuana retail outlets because the recreational sale of marijuana is still a Federal offense. Yes, it is hard to believe but the Federal government does not really care what the citizens of Colorado want as it relates to marijuana. They are protecting those bank charters. As a result, speculation is already rampant that robbing marijuana stores may be a lucrative business for enterprising local criminals. We shall see.
Of course, there are those who will be tempted to point out that our President was a founding member of something called the Choom Gang while in high school and is apparently quite the devotee of marijuana — medical or recreational. Who knows how these type of things really work.
So there you have it, a report from the front lines of the marijuana wars.
