Medical marijuana costs, fees, competition means few are getting rich, MMC staffer says

Categories: Marijuana

new ownership sign.jpg
Given the ongoing medical marijuana green rush in Colorado, plenty of folks are under the impression that most members of the industry are getting rich.

Not so, says Denver Relief creative director Christopher Meyer, who sees a big disconnect between perception and reality.

In "Medical Marijuana Doesn't Grow on Trees: The Myth of Making it Big in Colorado," a post on the Denver Relief blog, Meyer describes the situation like so: "While many have been successful, stiff competition for patients among dispensaries has driven prices lower and lower, while the cost of being compliant with Colorado's new regulations is reaching its peak."

The impact is being felt at Denver Relief -- and while Meyer isn't one of the company's owners, he's witnessed the short-term sacrifices they've made in order to guarantee they'll be around for the long haul.

"Every bit of revenue we generate is going right back into the company," he says. "And as far as I know, no one is going to be earning record profits in the first couple of years because of the investments that are required."

For instance, he notes, "the warehouses that needed to be built to be compliant with the new regulations are very expensive," and so are many of the other accoutrements required by the state.

denver relief interior.jpg
An image from Denver Relief's website.
Example? Meyer says that prior to the passage of HB 1284, the measure that regulated medical marijuana in Colorado, "we put fifteen cameras into our retail space, along with a security system we thought would be sufficient to meet the regulations. But now we have to replace our DVR with one that costs several thousand dollars, because the MMED" -- that's the Medical Marijuana Enforcement Division -- "has to hook into it, and you've got to have the right software."

In addition, Meyer says the scale with which the center weighs its products must be approved by the USDA, a federal agency -- ironic, since the feds see all marijuana as illegal. The cost of the device, and the calibration and certification required, is in the $1,000 range, he estimates.

Obviously, these costs keep adding up even as increased competition from other centers has caused retail prices to fall. That's been especially true lately, Meyer notes, thanks to outlets that may not meet the July 1 licensing deadline selling products at going-out-of-business level prices.

Presumably, this situation will stabilize in a couple of weeks -- but that doesn't mean the challenges are over.

"A lot of medical marijuana centers that exist now aren't necessarily as successful as they look," Meyer points out. "There are a lot of people who might be upside-down on them or are heavily in debt." After all, he adds, "the transition from marijuana being a black-market drug, where the overhead is the cost of producing it, to owning a retail space and a warehouse and having employees and licensing and taxes and all that really eats into the profit margin pretty quickly."

As such, Meyer believes businesses operating the right way -- like, in his view, Denver Relief -- will last, while those more focused on making fast money won't.

"I imagine some dispensary owners have taken money out of the business and spent it on themselves," he says. "And I don't think they're the ones who'll be around in the coming years."

More from our Marijuana archive: "Medical marijuana: Board of Health passes new driving rules, caregiver language (PHOTOS)."


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23 comments
Dispensary Biz News
Dispensary Biz News

We covered this same issue a few weeks ago (http://is.gd/62ltkn). Dispensaries certainly aren't getting rich. In fact, many of them are losing money, hoping to somehow hang on for another 6-12 months until the weaker players are forced to close after the new regulations go into effect.

Bstarr
Bstarr

The MMED, unfortunately, does not give a darn about patient's rights and really are in bed with law enforcement which will be evident after July 1st. Why is there no standard dose amounts? Why are MMCs and MIPS not required to test for active THC content? Why are there no approved testing labs?I was in Telluride for the Bluegrass Festival and visited Telluride Bud Co. No wonder MMJ has a bad rap. The owners were not only clueless about what they were selling they also didn't know what strength their products contain. When I asked about their opinion of compliance they replied they were not going to bother until the dust from law suits clears. No worries in Telluride...at that altitude I guess they think they are above the law

AncientMedicine
AncientMedicine

Well said, Corey!

I think most patients and physicians do not follow what's happening with medical cannabis in Colorado, and they just assume they are completely protected, while too many of our elected reps (constitution haters and constitution saboteurs) are dismantling everything we voted into place. And many other patients are simply too sick to follow CO's reps' perpetual efforts to undermine patients' physician-recommended care.

If a patients is too sick to advocate for themselves, maybe they have a friend reading this who could advocate for the suffering patient by donating to CannabisLawsuits.com or by helping the patient to donate (if they have any money, that is).

When I mentioned to a medical-cannabis-supportive physician that current regulations could destroy patient access and options, he had no idea that there were even new regulations - not voted on by the people -- and he straight-out didn't believe me when I said that former Governor Ritter tried to destroy the caregiver model, by secretly and illegally meeting to limit the number of patients a caregiver can serve.

The physician also said that I was "definitely wrong" about the fact that the medical cannabis raids under Obama -- who vowed not to waste DOJ resources raiding Medical Cannabis dispensaries, collectives, or patients, provided they were in clear compliance with the law -- have been "more frequent" than under Bush's administration. Take a look at the following Reason article, "False Forbearance - Obama breaks his promise to respect medical marijuana laws," by Jacob Sullum, if you want to know how this has been calculated (frequency -- not total number -- because Bush was around for a long 8 years and Obama has been around for approx 2.5 years):

http://reason.com/archives/201...

The Nanny Dems with all their disingenuous "patient protections" (outrageous and unconstitutional attacks on patient access and on Medicine) are just as hypocritical as the Repugs who constantly preach about states' rights, but continue to undermine the states when it comes to Medicine, an area that has been historically left for the people (the states) to decide, thanks to the 10th Amendment of the U.S. Constitution.

Corey Donahue
Corey Donahue

I'm pleading with you all to PLEASE CONTRIBUTE to saving Coloradan's constitutional rights to access, use and provide mmj. The people of Colorado need a declaratory judgment regarding the unconstitutional medical marijuana language that will go into effect July 1, 2011 and more on July 31, 2011. We need an additional $10,000 by close of business Monday, June 20 to file an urgent and necessary lawsuit. I have paid $30,000 out of pocket, and been able to raise all but the $10,000 in cash or check we need immediately. We are here in this 11th hour because many who have promised help have not come through. SO NOW I'M BEGGING!

And, no, I am not, exaggerating the need or the urgency. We cannot let LAW ENFORCEMENT or politicians circumvent the constitution. The rest of the world is watching Colorado and (many) following our troubling path. Colorado is the only place in the world where it is legal to make a profit off of mmj and the only place in the world where residents have a constitutional right to mmj. This is the battleground and we will not sit here while our constitution gets stomped out without a vote of the people.

Patients all over the state are not renewing or registering with the (optional) state registry, due to the fact that they will be recorded live via video/internet by the Dept of Revenue Medical Marijauna Enforcement Division and it will be shared with the DEA. The protected state registry with the CDPHE is now turning into a non protected DoR registry that is also shared with the DEA.

Patients are devastated they signed up at all. Only state registered patients will be permitted to shop in medical marijuana centers beginning July 1. So with the patients unwilling to incriminate themselves or give up their privacy (of which I agree), there will be very few patients qualified to even shop in centers. Centers are already feeling the loss of business and many are closing or being closed down.

This week, the CDPHE, passed (unconstitutional language) that says "mmj patients cannot operate a motor vehicle while under the influence of mmj." It also says "patients cannot undertake ANY "task" while under the influence of mmj that would cause negligence or professional malpractice." "Under the influence" currently is any amount of THC over zero. 120,000 patients are now questionable criminal suspects when it comes to parenting, working and driving. It would seem the only people who might qualify next month are hospice patients who have no kids and no job or task ahead except to die. This is devastating patients and voters alike, eleven years after A20!

I AM BEGGING! Contribute something at CannabisLawsuits.com (everything counts!!)

Kathleen Chippi

Patient and Caregiver Rights Litigation Project

720-565-0265

If you want to make a donation directly to Springer and Steinberg, call me and I will set it up

AncientMedicine
AncientMedicine

Sure, the goal of legitimizing dispensaries was an appropriate goal because Amendment 20 definitely mentions dispensing. I advocated strongly for the right of dispensaries to exist, but I also continued to advocate for the caregivers, as they have been the target of the most outrageous, constitutional subversion (including non-stop, secret efforts to marginalize the caregivers by limiting the number of patients they can help, which is clearly unconstitutional).

And the caregiver role was a lot more clearly defined in Amend. 20 than the existence of dispensaries. There were enough patients to keep the caregivers employed while also growing the dispensary model; but the dispensary owners went along with Romer's sabotage, because most of them apparently believed that getting rid of the caregivers and many other dispensaries (their perceived competition) would increase their profit.

But when Romer started ranting about "auditors with guns" closing most of the dispensaries down, the dispensary owners should've snapped out of their trance. I guess all the smiling, hand-shaking, name-dropping, and trying to get along eclipsed the listening.

There's still a chance to fight this thing, but the owners need to accept that the DOR and MMED (or whatever they're called) are not their allies, at all; and they never will be.

Never.

And those attorneys helping you through all these hoops paid you a great disservice by not fighting the regs from the beginning; but they don't care because they're raking it in by helping you to navigate through a maze that has no end or exit. The dispensary owners real allies were -- and still are -- the advocates who had the brains to believe Romer's threats and fought these regulations from Day 1 (thanks Kathleen, Laura and Robert).

When the dispensary owners chose to lay down with the dogs, they chose profit over patients; and unfortunately, they are now coming to realize that they've been hoodwinked by opportunistic politicians looking for some way to get more press.

Denver Relief Needs A Tampon
Denver Relief Needs A Tampon

Denver Relief is full of little whiney bitches. Kayvan, Ian, all you guys: SUCK IT THE FUCK UP. Every week you guys are bitching about something new. The cannabis cup. Full spectrum. The color of the sky. Thats why I dont shop at Denver Relief anymore. Real potheads chill the fuck out.

Guest
Guest

Perhaps these centers should have fought the regulations rather than embrace them.  Remember all those pot "advocates" saying, with the idea that mmj would be legitimized and mainstreamed, "we want regulations, we want to pay taxes".  Well, now they have their regulations, and their taxes, but they you still don't have the respect they were seeking.  And many of them eventually won't have a business either.  Chris Romer and Tom Massey were gunning for eliminating eighty percent of these businesses, and that just may be the case once all the dust settles after July 1.

SxPxDxCx
SxPxDxCx

Does the state want a piece of the pie or not?   If the state thinks that the only people smoking are people that have cards they are fooling themselves.  I'm sure the black market is happy to keep all that tax free money for themselves. 

Get Real Brother
Get Real Brother

Get your memory banks reorganized, Brother.

Your 'job' has become collecting private/personal detrimental (mmj) data on patients (Americans) and turning it over to cops.   Isn't there a 4 letter word for that that starts with a n and ends with a c?  hmmm. 

Lookie Loo
Lookie Loo

This is really good to see becasue the last time i looked they weren't to be in it for the "money" but to "help people"

guest
guest

"As such, Meyer believes businesses operating the right way -- like, in his view, Denver Relief "-- will last, while those more focused on making fast money won't."

Since when is the "right way" giving up your constitutional rights and then giving up your patients constitutional rights for them, so you can stay in business?? 

Keep talking.......the patients are hearing......and running. 

To all patients:  signing up for a state registry card is not required under the constitution.  You have an affirmative defense with a docors rec.  Anyone with elevated plant counts is automatically an affirmative defense, so registering does not change that.  Rob Corry has even won in court that a diagnoses of a qualifying condition and a verbal rec from a doctor is sufficient, under the constitution. 

Guest
Guest

I guess the business owners just don't get it---patients are NOT willing to be video taped buying a federally illegal substance knowing the video will be live feed to law enforcement and the DEA.  Wake up.  Business will not improve.  Stop living in a fantasy world.  Sen Romer (D) promised to close down 80% of the businesses with hb1284.  He is accomplishing his promise.  And it appears the Board of Health is right there helping him along.

Corey Donahue
Corey Donahue

I think there is a word for all these MMED regulations, I think the word is extortion.  I can think of no better word for something that has produced 50 fines, 9 denials 1 raid and no licenses but keep believing that these MMED rules are there to help, it's one of the few things I can laugh at in this tragedy.

Pothead
Pothead

No kidding. I went there too. What aholes. They advertised the it products all over town but when I went there they said they didn't even have dropits

Thugzngunzgvmnt
Thugzngunzgvmnt

'Zactly right. Chris Romer is an old school shyster con-artist, and the number one rule of any con is that you always choose a mark greedy for quick profit. Romer played each and every one of these poor suckers to the hilt:, attorneys, physicians, MMCs and edible manufacturers.

Guest
Guest

Hmmm, maybe they're not POTHEADS...this is medical, right?  Apparently potheads go on message boards and talk shit as opposed to relaying their thoughts in person like a real man/woman. 

Matt in Boulder
Matt in Boulder

I don't understand why people have fallen for the propaganda that says marijuana-based medical centers are supposed to be altruistic when every other aspect of healthcare in this country is very much "in it for the money".  I believe all health care should be non-profit, to minimize the greed factor we currently endure, but this double standard applied to marijuana is very frustrating.

Dov
Dov

I agree, however for those of us that don't have a mmj green-thumb dispensaries are a necessity as it's getting harder and harder to find good medicine otherwise. Take it from one who decided not to renew because of the new rules but after several months finally gave in and renewed after having to go without my medicine due to not being able to find any.

I still don't understand how these new rules can be constitutional when they are clearly in violation of Amendment 20.

Cowgirl
Cowgirl

It was all a hype so they would get people into their center. They had dropits but told patients their tincture which was more pricey and weak as it gets was all they had left

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