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Marijuana business failure rate of 40 percent not bad, says industry expert

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Cherry Top Farms closed in 2011.
In recent days, the Denver Post reported that the number of medical marijuana businesses in Colorado has dropped by more than 40 percent since its peak at the end of 2010 -- from 1,131 to 675 over the course of fewer than three years.

That may seem like a precipitous slide. But one industry expert says that after weighing the various factors and challenges unique to the medical marijuana business, the decline isn't calamitous as it might appear.

That's the view of Shawn Coleman, past head of the Cannabis Business Association and current boss of his own firm, 36 Solutions. These days, he's lobbying on behalf of Vicente Sederberg, a law firm whose principals are Brian Vicente, a primary proponent of Amendment 64, which allows Colorado adults 21 and over to use and possess small amounts of marijuana, and Christian Sederberg, who represented the A64 campaign on the governor-appointed task force that recently passed its implementation recommendations to the Colorado legislature.

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Shawn Coleman.
Coleman points out a factoid that appears in the Post story, albeit in a less-than-prominent place: 30 percent of all new businesses in any industry fail within the first two years.

"That parenthetical reference to the failure rate of new businesses -- you're talking about 30 percent of businesses entering an already mature and established market," Coleman says. "So you're not really comparing apples to apples when 100 percent of this industry is new.

"If you really want to start the clock at the passage of the first marijuana code in 2010" -- HB 1284, which established rules and regulations for the MMJ biz in Colorado -- "you're really talking about businesses that are just turning three. And then think about the completely out-of-the-ordinary things the industry faced with the drafting of that bill."

Amendment 20, the 2000 measure that legalized medical marijuana in Colorado, "was silent about whether there should be retail distribution of cannabis," Coleman points out. "So to get the bill passed, the general assembly was responding to an industry that was already in place. And while some members who voted for the bill thought the industry was a good idea and wanted to support it, plenty didn't feel the same way -- which is why some parts of that law were designed to create some contraction."

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Chris Romer.
Indeed, HB-1284 co-sponsor Chris Romer made no secret of his desire to reverse the growth rate of MMJ businesses with the legislation. In November 2009, he said, "I fully expect well over 50 percent of the dispensaries will go out of business."

By that standard, the industry as a whole is actually doing better than anticipated at this stage of its development. In Coleman's view, 30 percent of the business losses since 2010 "are related to market forces," with the additional 10 percent "by design."

Of course, the causes of death for assorted dispensaries vary widely.

Continue for more about the failure rate of medical marijuana businesses.



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41 comments
saul_meshach
saul_meshach

Donkey is right, I am a dispensary owner. and I is HELL, constant work constant hours  just to stay afloat. Not for the weak of heart.

11er
11er

It's jack420flash and that might be good for biz. My question is are people still gonna be classified as a med patient, or just shop at the norml shops when they open... 420 is fast approaching and I will be coming (as usual) from Il. Am i gonna have a problem toking. I also have HIGH TIMES TICKETS..  Hope you guys liked the DVD "COLORADO's UFO  WAR"

stuka1
stuka1

"Wanda James..."


IDHITIT.

DonkeyHotay
DonkeyHotay topcommenter

Stoners Never Fail to Fail ... it's what they do best.


DonkeyHotay
DonkeyHotay topcommenter

The MMJ Dispensary Clowns BEGGED for REGULATION -- naively thinking it would "legitimize" their criminal activity -- and the Drug Warriors gave them what they begged for -- HB1284 which was DESIGNED to ELIMINATE 70% of the existing businesses at the time by declaration of the authors of it.

Mission Accomplished!! ... you fools got EXACTLY what you begged for!

*** Regulation WORKS! *** ... for the regulators!

ryanjohnsmith1013
ryanjohnsmith1013

Re: denial of banking services

There are these swell adaptors to smart phones called " squares ". Right into your checking account.

CoreyDonahue
CoreyDonahue

How many microbrewres fail?  I mean your selling cannabis, just like beer, there is always a demand and it's the states fault if you can not bring your product to market.

anonymous
anonymous

DonkeyHotay's broken record "fist of regulation" comment coming right up...

DonkeyHotay
DonkeyHotay topcommenter

@2006KLID "Am i gonna have a problem toking"

Stupid stoners have problems with the simplest things in life.

DonkeyHotay
DonkeyHotay topcommenter

@Cognitive_Dissident ... business death is actually a welcome relief to those trapped in a non-profitable, constant torment, unstable industry.  As many of those dispensary owners who haven't yet been put out of their misery will attest.



stuka1
stuka1

@DonkeyHotay stoners like Obama, Louis Armstrong, etc etc etc

JackassHotay=blithering imbecile

MandyMountain
MandyMountain

@DonkeyHotay Then why haven't the drug warriors beaten them in the four decades since Nixon ushered in the so-called war on drugs? A bunch of stupid, lazy stoners are beating the government despite the taxpayer money pumped into repression. So screw you, dumbass.


DonkeyHotay
DonkeyHotay topcommenter

@ryanjohnsmith1013 

No checking account is legally available to those operating a Continuing Criminal Enterprise.

And the "swell adaptors [sic]" you refer to often come with their own User Agreements that preclude engaging in criminal activities -- like Money Laundering, etc.


stuka1
stuka1


@anonymous His fascination and obsession with gay sex, scat and fisting is a manifestation of Haggard-Touretts Syndrome. With a hefty dose of anacephaly.

11er
11er

@DonkeyHotay @2006KLID  Why don't we hit a bowl together? If your in denver 420. What is your definition of a stupid stoner? I bet you smoke more than CHEECH or CHONG.....

DonkeyHotay
DonkeyHotay topcommenter

@stuka1 ... only a stammering stoner like you would assert that Obama is a stoner,



DonkeyHotay
DonkeyHotay topcommenter

@MandyMountain ... REAL Smugglers / Dealer's -- the successful ones anyway -- adhere to the First Rule of Dope Dealing: Don't Get High on Your Own Supply!

The Drug Warriors have beaten the stoners -- one pathetic IMPRISONED loser at a time -- and the stoners continue to offer themselves as fodder for the Prison Industrial Complex with their puerile pot clown antics.

Only a clueless stoner -- or a crack-crazed Charlie Sheen -- would call the carnage, destruction and devastation that HUNDREDS of THOUSANDS of stoners have suffered these past 40+ years as "beating the government".

Winning! ... NOT!



stuka1
stuka1

@DonkeyHotay @stuka1 

DonkeyAssBreath= Epic Rebuttal FAIL

stuka1
stuka1

@DonkeyHotay @MandyMountain 

ENJOY ONLY 2 COSMETICS, enough sleep 4 Dr. Bronner's 'Magic Soap' to clean body-mind-soul-spirit instantly uniting One! All-One! Absolute cleanliness is Godliness! For facial packs, scalp & soothing body rub, add dash on bath towel in sink of hot water. Wring out. Lay over face & scalp. Massage with fingertips. Repeat 3 or 4 times 'til arms, legs and all are rubbed, always towards the heart. Rinse towel in plain hot water and massage again. Breathe deeply! Health is Wealth. Within 9 min. you feel fresh, and clean, saving 90% of your hot water & soap, ready to help teach the whole Human race the Moral ABC of All-One-God-Faith! For we're All-One or none! ALL-ONE! ALL-ONE! ALL-ONE! 

DonkeyHotay
DonkeyHotay topcommenter

@stuka1

" I enjoy [ having to wade throught [sic] all your pathetic, inane, obnoxious, puerile, mindless drivel ] "


stuka1
stuka1


@DonkeyHotay I enjoy beating you up and taking your lunch money every time you spout mindless drivel

DonkeyHotay
DonkeyHotay topcommenter

@stuka1 " I enjoy [ having to wade throught [sic] all your pathetic, inane, obnoxious, puerile, mindless drivel ] "

Noted.

DonkeyHotay
DonkeyHotay topcommenter

@stuka1 "having to wade throught [sic] all your pathetic, inane, obnoxious, puerile, mindless drivel"

So who's forcing you, eh numnuts?

stuka1
stuka1

@DonkeyHotay @ryanjohnsmith1013 More like having to wade throught all your pathetic, inane, obnoxious, puerile, mindless drivel to get to any relevant or useful comments.

Must suck to be so miserable as to have to troll near-vacant news blogs from your mommy's basement all day every day for 7 months.

DonkeyHotay
DonkeyHotay topcommenter

@ryanjohnsmith1013 ... yet here you are, loser, reading all of my snide, un-funny comments.

Sucks to be you, don't it?

LOL!

ryanjohnsmith1013
ryanjohnsmith1013

@DonkeyHotay 

You're about as sharp as a bowling ball.

Your retort is illogical and makes entirely no sense.

Are you even employed yourself ? Because it seems like all you do is make snide, un-funny comments on this platform everyfuckingday.

stuka1
stuka1

@DonkeyHotay  = insufferable bore with  nothing in its life but trolling WW.  Cya later, punk. Have your lunch money ready. 

stuka1
stuka1


@DonkeyHotay = idiot who will whine up to the day the pot shops open, then will be first in line. Loser.

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