Recreational marijuana became legal in Colorado on January 1, and it will create enormous changes for its cities. And more legalization in other states is on the way.
As the first state in the country to implement legal recreational use of marijuana, Colorado's efforts are being scrutinized by states and cities across the country and, I assume, a fair number of countries, too. If Colorado's legalization is successful, there will be much more aggressive efforts to legalize marijuana in other states.
In fact, recreational use of pot has been legalized in Portland, Me., three cities in Michigan, Washington State, and Uruguay.
In Colorado, anyone who is at least 21 years old may use and grow marijuana. Colorado residents may purchase one ounce at a time, and non-residents may buy one quarter of an ounce for use in the state. It must be smoked (or eaten) on private property away from prying eyes, such as in homes and hotel rooms.
The state is issuing licenses for recreational use first to shops that are authorized to sell marijuana for medical purposes as well as to marijuana growers. The implications are enormous.
For example, Colorado city real estate markets started changing in 2000 when the state legalized marijuana for medical use. There are hundreds of stores licensed to dispense medical marijuana and hundreds of sites licensed to cultivate it.
Fortune magazine reports that 1.5 million to 3 million square feet of real estate has been leased for existing marijuana businesses. That number will undoubtedly increase with recreational marijuana, and could help revitalize cities' ailing real estate markets with clean, well-lighted places. Andy Williams told Associated Press he wants to create "a gleaming white Apple store of weed" that will include 40,000 square feet for growing marijuana.
On the subject of real estate, recreational marijuana could also affect hotel/motel businesses. I wouldn't be surprised if more smoking rooms were allocated. In fact, I also wouldn't be surprised if some hoteliers created special pot rooms complete with paraphernalia, such as rolling papers and bongs (no, not bells) as well as a supply of snack foods.
After all, tour companies are already developing marijuana tours to ferry tourists to various pot hot spots. Colorado Rocky Mountain High Tours has a "marijuana concierge" to drive tourists around in a limo to help them pick the best varieties of pot and foods laced with the weed. Pot shops are showing off dozens of different strains, just as tobacconists display tobacco in jars.
Pot education will be a big business. On January 1, The Denver Post launched a new website, The Cannabist (cannabis is the genus of plants that includes marijuana), and it looks very well done to me. (See a PBS video interview with The Cannabist's editor below.) In the short time it has been up, the site has been filled with all sorts of interesting articles, including recipes for pot-based food (sour cream coffee cake with marijuana, anyone?). I'd be surprised if the various business aspects of pot didn't generate a fair amount of new advertising revenues for publications.
With all the publicity about pot, cities will have their hands full enforcing regulations. Some cities are welcoming, or at least allowing, pot to be sold, while other cities hate the idea and are banning it.
To enforce pot laws, some police departments might subpoena records from smart meters to determine electricity usage patterns that could indicate pot cultivation.
Added to the confusion over Colorado laws versus city laws, the Federal government still considers marijuana illegal. Federal law enforcement agencies won't go after typical pot users in Colorado and Washington. However, Federal law typically trumps state law, so legal conflicts are bound to occur.
Despite all the potential problems, the legalization of pot has at least one thing that makes it very attractive to cities: money. First, cities might save money by not aggressively prosecuting pot users and growers, although the police will still have to enforce the marijuana laws.
Second, Colorado and certain cities will obtain millions of tax dollars from the sale of marijuana as well as licensing and permit fees. Colorado charges a sky-high 25% tax for recreational marijuana, and cities also add taxes. CNN says the state will use $27.5 million from taxes for schools. Third, Colorado and cities could obtain additional revenues from marijuana-related activities, such as increased real estate rentals.
If marijuana were legalized across the country, it could become an enormous business, just as alcohol and gambling already are, and perhaps reduce much of the crime associated with illegal pot sales. Significant challenges exist, but it's time for cities and states to seriously consider marijuana legalization.
ó Alan Reiter, President, Wireless Internet & Mobile Computing