NEW YORK (MainStreet) Colorado's new open market for marijuana for anyone of legal age, has decidedly changed the balance of a previously hypothetical question: what would happen to the economy, crime statistics, tax base and even employment if the plant were regulated, legally sold and taxed?
Sales figures from Colorado in the first month of legal sales alone, show that financial impact will probably make the marijuana market compete if not dwarf the amount spent on alcohol by Colorado consumers in its first year out of the gate. Approximately 37 marijuana stores across the state of Colorado estimated close to $5 million in sales during their first week in business. The 30 day figures saw a whopping $14 million in profit from the same and generated $2 million in tax revenue. Sales have been so brisk, they are now on track to reach as much as $1 billion by the end of this year just in Colorado alone.
What this will mean for bank regulation is an issue now of concern if not ongoing discussions by the federal Justice Department with financial establishments in both Colorado and Washington state, expected to follow Colorado's lead in legalizing recreational marijuana sales later in the summer of 2014.
The business climate, although flying high at the moment, still has much ground to cover even as the marijuana space gains strength in motion and organizes itself along the lines of a traditional business lobby and presence.
The uncertain legal environment, if not novelty of legal sales, however, has predictably had an impact on the first joyous days of the green rush, although prices are also widely expected to drop, if not potentially the high sales tax levy on the same. The tax structure will remain in place, however, according to state legislators instrumental in crafting them, until there is a better understanding of the market.
Other legal and financial hurdles remain, including the requirement that all sales occur in cash. It is still not legal to buy pot on a credit card and business owners cannot deduct expenses as other legal businesses can.
Other indicators, however, that this may in fact be a new green rush include a new interest in marijuana penny stocks, marijuana grow technology and just about any other vertical historically applied to crop based commodities with the exception perhaps of derivatives in the form of crop insurance. For now.
This is perhaps the first time that the legal marijuana movement has gotten such a legal if not nationally hailed boost in most people's memory and certainly since President Franklin D. Roosevelt's historically famous hemp growth farming initiative, often dubbed the "National Hemp For Victory" campaigns leading up to WWII.
That said, with all the excitement, from legislatures who are not yet counting marijuana revenue in state budget projections for next year, to those who showed up in force to the nation's first pot job fair, it is clear that this is a new vertical facing unusual headwinds if not an uneven regulatory outlook.
Not to mention the fact that despite all the excitement about legalized selling in the state, there has apparently been a backlash in other businesses who have apparently not only left employer-based testing programs untouched, but seem equally unnerved about the prospect of employees using the substance at all, even off hours. In a recent survey sent out to Colorado businesses, only 2% have relaxed drug testing policies, although the vast majority of the same (71%) have not actually increased testing.
--Written by Marguerite Arnold for MainStreet