Colorado’s legal pot industry offers lessons for Washington state

As Washington state’s first legal marijuana outlets get set to open, Colorado is taking stock of its first six months of legal recreational marijuana sales.

Some of the conclusions are based on hard numbers, while others are more anecdotal. Either way, a leading cannabis industry voice says there are plenty of lessons that can be gleaned for our state from Colorado’s experience.

“Overall, it’s been incredibly successful,” says Taylor West, Deputy Director of the National Cannabis Industry Association, a national trade association based in Denver. “We’ve seen benefits such as less crime and increased tax revenues. And more importantly, we haven’t seen any of the massive negative effects predicted by opponents.”

If consumers in Colorado are any indication, there should be plenty of people rushing to buy legal pot in Washington. Recreational sales in Colorado totaled $69,527,760 between Jan. 1 and April 30, according to state tax figures gleaned by The Denver Post.

It’s been a windfall for tax coffers, with the state collecting $10,896,143 in recreational marijuana taxes during the first six months.

Critics who warned of an increase in crime because of legalization seem to have been proven wrong, West says.

Although there isn’t enough data yet to draw any definitive conclusions, the Denver Police Department reports burglaries, robberies, violent and property crimes are all down from the same period in 2013. Police report 53 burglaries and one robbery at the city’s more than 700 licensed marijuana stores and cultivation facilities from Jan. 31 through May 31, according to the Denver Post.

“At the very least that proves that opening up legal adult use sales did not increase crime,” says West. “It has allowed law enforcement to focus on more violent crime.”

Another fear about legalizing marijuana is increased access for young people. West says it’s too soon to determine if more minors are consuming marijuana but she does say a recent series of stings by the Colorado Department of Revenue shows retailers are strictly prohibiting sales to those under 21.

Authorities in Denver and Pueblo conducted 20 undercover operations in an effort to get the stores to sell pot to someone under 21, but not a single one would, the Denver Post reports.

“What we are seeing here is that these regulatory structures actually incentivize businesses not to sell to underage customers,” says West. “That is a very different situation then when marijuana is being sold on the street. No street dealer is going to ask for ID.”

Some reports out of Colorado says doctors are seeing an increase in young people being admitted to emergency rooms because of adverse effects from consuming large quantities of edible marijuana. The state responded by tightening labeling and packaging rules.

The Washington State Liquor Control Board has just issued a set of “emergency rules” requiring specific labeling and limiting the types of edibles like marijuana-infused candies and other treats that could be more appealing to kids.

Legalizing marijuana has also seemingly helped boost the Colorado’s tourism industry. A study by Hotels.com earlier this year found Denver alone experienced a 25 percent increase in hotel searches in the first three months after legalization compared to 2013.

“Denver has seen record setting convention business this year and a record setting ski season in the mountains this winter,” West says.

While she acknowledges it’s unlikely a huge number of people are traveling to the state just because they can buy pot, it’s a factor for some in deciding where to visit.

“The fact that there is also this option to purchase and consume a Cannabis product legally while you’re there can be the tipping point for a lot of people.”

When Colorado’s recreational retail stores first opened this year, demand far outweighed supply. And with the taxes and fees, pot prices climbed noticeably higher than the black market. Prices have since stabilized as supply has caught up, but remain slightly higher than the black market.

The situation could be far worse here in Washington because unlike Colorado, which had an established medical marijuana system that made it easier to transition growers into the recreational market, Washington is starting completely from scratch.

Some predict the higher prices and lack of availability could keep frequent marijuana users from buying pot at legal retail outlets in Washington. But West says that hasn’t been the case for both occasional and frequent cannabis consumers.

“The reality is that as long as the legal market here in Colorado is providing a superior product with all of the consistency and safeguards that you expect in a regulated system, then they’re just going to be a more attractive option than an illegal seller.”

The biggest lesson Washington can learn from Colorado is patience. West says it’s a virtual certainty a number of unexpected issues will arise that will require changes, and involving all stakeholders from the state, law enforcement and the industry has been key to working through problems in Colorado.

“It’s just important that people remember that essentially this is building a whole new regulatory structure from scratch, and the odds that you get it all right on the first try are pretty much zero.”