Colorado marijuana prices have soared since Colorado's landmark law made it legal on the first day of this year to buy recreational marijuana. Along with Colorado’s marijuana prices, it appears that marijuana uses are rising; not just in Colorado, but in neighboring states. According to a Jan. 3, 2014, U.S. News report, officials in neighboring states “have already seen an uptick in marijuana possession after medical marijuana became legalized in Colorado.”
One Wyoming sheriff has found out that the rising Colorado marijuana prices are not holding people back from buying marijuana and that pot is increasingly on its way from Colorado.
"It's one of those things where, we know it's going to be coming across the border into Wyoming," said Jeremy Huston with the Albany County Sheriff's Office in Wyoming. "We figured we'd see some kind of increase in the possession or use of marijuana, and we were right," Albany County sheriff Dave O'Malley said.
Sheriff Dave O'Malley commented that “incident reports reveal how people are unabashedly getting blitzed in his county — which borders Colorado.”
It’s “almost like looking at a scene in a Cheech and Chong movie,” Sheriff Dave O’Malley said, “where they would pull over a car for speeding and the windows would all come down and the smoke would come billowing out of the cars.”
Albany County, which is next to Larimer County in Colorado, where purchasing and using recreational marijuana became legal for those 21 or older, might have as many “unabashedly blitzed” marijuana users as Colorado has state officials.
As Colorado marijuana prices are soaring, so is the state’s income.
Since 2010, medical marijuana was available from Colorado dispensaries for a price of around $250 per ounce plus taxes. Now, recreational marijuana is selling at prices close to $400 per ounce at some retailers with a 10 percent tax.
“In all, about $1 million in business was done at about 35 pot shops on the first day of marijuana's legalization in Colorado. Such commerce translates into a bonanza for state tax collectors, who are expected to receive up to $67 million a year initially,” reports CNN.
“The taxes on recreational pot are considerable: a state excise, or wholesale, tax of 15%, a special state sales tax of 10%, a special Denver sales tax of 3.5% -- plus the usual state and city taxes of more than 7%, said spokesman Mason Tvert of the Marijuana Policy Project.”
Colorado marijuana prices are not regulated.
At the moment, Colorado does not impose any pricing structure for pot suppliers but is leaving the market open to supply and demand. “All plants are grown indoors, and state law limits to six the number of plants grown under each light fixture.”
The regulation that Colorado does impose includes that sellers have to obtain a license for which a seller has to include a fingerprint-based background check and financial check. The businesses must also receive approval from the local authorities before they may operate. According to a CNN report on Dec. 24, “the state sent out 348 retail marijuana licenses to prospective retail marijuana establishments on Monday, including 136 marijuana stores, 178 marijuana cultivation facilities, 31 products manufacturing facilities and three marijuana testing facilities.”
What factors will affect Colorado’s marijuana prices in the coming weeks.
On Wednesday, one marijuana dispensary sold high-quality recreational marijuana for $70 for one-eighth of an ounce, a markup from $25 for the same amount the day before. A Colorado State University report forecasts that retail prices will settle at around $185 per ounce, instead of close to $400 per ounce, in the future.
One of the major contributing factors to whether people will get “unabashedly blitzed” from legal marijuana or illegal marijuana is how the black market will react to Colorado’s marijuana soaring prices.
“If marijuana continues to funnel into the black market, I am happy to look at shocking the black market out of the legitimate industry by slashing taxes, but this is way too early in the game,” said Colorado State Rep. Jonathan Singer, who sponsored the House bill on legal marijuana sales. “And judging by the thousands of marijuana consumers lined up around the block yesterday, Coloradans appear comfortable with taxes as they are.”
Another player in the game of Colorado’s soaring marijuana prices is, of course, the federal government. For now, the Obama administration says it won't prosecute buyers and sellers under Colorado’s state law. Under federal law, however, recreational marijuana is illegal – but for how long?
“With so much cash flowing at dispensaries, advocates hope the U.S. Treasury and Justice Departments will work out an arrangement with banks to allow accounts with the marijuana merchants, freed from potential federal prosecution.”
As evident in Colorado’s soaring marijuana prices, are other states letting an opportunity go “Up in Smoke”?
Deputy director of the National Cannabis Industry Association Betty Aldworth is projecting that marijuana will be a $208 million industry in Colorado this year -- on top of the $250 million projected to be spent on medical marijuana. Nationwide, government-regulated marijuana is projected to double this year, to $2.3 billion from about $1 billion last year and besides Colorado, Washington will be the second state to have legalized recreational marijuana later this year. Illinois, Massachusetts, Nevada, and Oregon will allow medical cannabis shops to open in 2014. “Pot promises to be such big business that advocates are planning voter initiatives for legalizing recreational use in several other states by 2016,” reports CNN.
So, as Albany County sheriff Dave O'Malley is looking at those reports of Colorado marijuana prices soaring and of people getting “unabashedly blitzed,” he must be wondering if Wyoming isn’t missing a part of the pot of the gold. Or as Betty Aldworth described it, “this is unquestionably a tremendous growth industry. There hasn't been an opportunity like this in American history in quite some time. The tech boom had an impact on the American economy, but I think this could rival it. We're not creating a market out of nothing. We are just shifting it from the underground market."