Marijuana retailers may not have to grow their own -- and that's great, attorney says

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Last month, the governor-appointed Amendment 64 task force recommended that retailers taking part in the recreational marijuana industry be required to grow 70 percent of their product under a business model known as vertical integration that's currently imposed on medical marijuana outlets. Yesterday, though, members of the legislature's A64 joint committee rejected that advice. Their word isn't final, but a longtime critic of vertical integration thinks consumers will be much better off if they get their way.

Under state law, MMJ dispensaries must obey the 70/30 rule, which means they are required to grow at least 70 percent of their own product, while acquiring no more than 30 percent from other sources. But marijuana attorney Warren Edson says "my focus is less on 70/30 and more on vertical integration -- because without that, you can't have 70/30."

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Photo by Sam Levin
The first task force meeting took place in mid-December.
And vertical integration makes no sense to Edson. For one thing, he maintains, "the skills needed to be a retailer aren't necessarily the skills needed to be a grower -- but they pretty much force you to have the same skills or find somebody to work with who has the skills you don't. That works sometimes, but it doesn't always.

"Medical marijuana is one of the few industries, if not the only industry, where retailers are forced to own the whole line of production," he goes on. "It's a huge pain in the ass to run a business like that -- and to force that model into retail is ludicrous, particularly given that Colorado voted to regulate marijuana like alcohol, and alcohol is just the opposite."

How so? Edson points out that "at a recent city council meeting, they did a nice job of talking about the history of prohibition, and how you're not allowed to be an alcohol distributor and a manufacturer. They thought it would be an easier way to regulate and control if they were separate -- yet some members of the medical marijuana industry and some of the legislators act like vertical integration is easier."

The latter theory got a whupping thanks to a state auditor report blasting the Medical Marijuana Enforcement Division, the agency in charge of enforcing regs on the MMJ industry. The title of the auditor's release about the document -- "State Oversight of Colorado's Medical Marijuana Industry Ineffective" -- neatly encapsulates the analysis, which faulted the MMED for failing to develop seed-to-sale tracking, ineffectively managing its money and taking nearly two years, on average, to process license applications.

The A64 task force "said over and over that vertical integration was safer because we already have this in place and we allegedly know how to manage this," Edson says. But the auditor's report "was the kicker. If we'd had an audit that said we have bulletproof seed-to-sale and there's no problems, that would have justified the idea that we had a system in place that was safe and totally controlled, so why rock the boat? But the auditor's report said just the opposite.

"Consumers deserve better, and it's not the government's role to shove something down an industry's throat."

Continue for more about marijuana retailers and growers.



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25 comments
Isaac Loya
Isaac Loya

Liquor stores don't make their own alcohol!

Aaron LeForce
Aaron LeForce

anyone that knows anything about this industry knows that if stores do not grow their own, things will get fucked up REAL quick! how will they make money if they do not grow? easy...undercut the growers and charge out the ass to the customers.

Russ Hollar
Russ Hollar

I think they should otherwise big business will take over. Coors, Philip morris, Mexican cartels.

Dan Spencer
Dan Spencer

No. A thriving wholesale market would create jobs.

stuka1
stuka1

Looking forward to seeing how many more of the Governor's Prohibition Task Farce's bullshit "recommendations" get shot down over time.

Heh.

Monkey
Monkey

I thought with alcohol there is wholesalers, distributers and retailers, and you can only be one. There are also limits on how many retail stores you can own, to avoid monopolies. MMJ is the opposite in every way, you have to be all trades and can own many retail stores in the same town, insuring monopolies. Everyone who grows or buys good weed would rather have a model where small scale craft gardeners could supply retailers instead of forcing warehouse weed down everyones throat.....Except the lobbying  "industry", they want you to believe their mildew, bug and pesticide laced products, grown by employees, should be the future of weed world. No one cares about good weed, they care about controlling weed, so the best weed will always come from individuals with skill who ignore the "regulations" and do the right thing, while the "industry" spends their money on propaganda against their "black market", superior competition. I see no difference between the police and the commercial weed industry, they both want to snuff out good weed and make money by creating the illusion of control. 

DonkeyHotay
DonkeyHotay topcommenter

The "vertical integration" idiocy only benefits LAW ENFORCEMENT by making the jobs of lazy REGULATORS easier -- it is an unnatural expensive market restriction that is NOT in the BEST INTERESTS of either the Dispensary Businesses or the PATIENTS who in the end must bear the financial burden of increased costs of production.

Good thing that the lying liars who wrote A64, and the fools who promoted and supported it, surrendered total control of marijuana over to the same Bureaucratic Buttfucks who came up with the total retardation that is HB1284.

Funny that the same Dept. of Revenue fools force the OPPOSITE model -- albeit equally fucked up -- on the Automotive Industry they REGULATE ... completely disallowing and prohibiting vertical integration, mandating that Manufacturers cannot be Distributors, and Distributors cannot be Wholesalers, and Wholesalers cannot be Retailers -- forcing in that case $1000s in unnecessary middle-man fees on the purchae of each and every motor vehicle, motorcycle, snowmachine, ATV or scooter sold in Colorado.

FORCING market structures by law = Epic Fail.


DonkeyHotay
DonkeyHotay topcommenter

@Isaac Loya ... nor are they limited to selling only 1 (one) case of beer per customer.

Perhaps the Stupid Stoners and Lying Liars who wrote, promoted and voted for A64 realized that marijuana is more dangerous than alcohol, and needed stricter regulations.


DonkeyHotay
DonkeyHotay topcommenter

@Aaron LeForce = know-nothing idiot

stuka1
stuka1

@Aaron LeForce  

Really, Aaron? "Anyone who knows anything about this industry"?

Shit you make up =/= "facts" 

hth

DonkeyHotay
DonkeyHotay topcommenter

@Dan Spencer ... so would legalizing prostitution.


DonkeyHotay
DonkeyHotay topcommenter

@Monkey "I thought with alcohol there is wholesalers, distributers and retailers, and you can only be one."

... Manufacturers, Distributors and Retailers, and no person or entity can be more than one of the above.

@Monkey "There are also limits on how many retail stores you can own"

No more than 1 (one) liquor license per person/entity statewide!

Perhaps they SHOULD regulate it LIKE alcohol! ... that would shut those greedy MMIG dispensary pigs down ... via the REGULATION THEY Begged For!

                             *** REGULATION WORKS! ***


D0NKEYH0TAY
D0NKEYH0TAY

@DonkeyHotay You are such a fucking douche.  Pretty much everyone is tired of hearing your spooge hit the floor.

stuka1
stuka1

@DonkeyHotay I didn't say anything about A64.

hth moron.

Why do you hate legalizing cannabis?

DonkeyHotay
DonkeyHotay topcommenter

@stuka1

A64 did NOT legalize marijuana, not even close.

hth.

El_Derpo
El_Derpo

@D0NKEYH0TAY <<<<<<~~~~ derp double

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