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A full five months after Coloradans voted to treat marijuana like alcohol, it looks as if legislators might consider following through with it.
On April 8, the House-Senate Joint Select Committee on Amendment 64 voted to abolish the current, state-enforced "vertical integration" business model. While Colorado pot distributors now have to grow at least 70 percent of their own product, the joint committee will propose a bill allowing those in the recreational marijuana industry to focus on one side of the industry or the other, as they choose.
This new proposal comes after a long push from Colorado voters to do just that. The Amendment 64 campaign hinged on the idea that recreational marijuana should be taxed and regulated like alcohol, and voters approved it. It was even called the "Regulate Marijuana Like Alcohol Act." Yet the state-enforced recreational marijuana industry policy shares little current similarity with the liquor industry.
According to Warren Edson, an attorney who consults for marijuana businesses, alcohol and marijuana have opposite business policies.
"Alcohol is forced non-integration," he said. "That's what the voters approved."
So far, it is not what they have been given.
Vertical integration has always been controversial. First conceived when only medical marijuana was legal in Colorado, the policy was part of the envisioned "seed-to-sale" model. Supposedly, making marijuana dispensaries grow most of their own plants would lead to fewer drugs leaking onto the black market.
But as Colorado Watchdog has already reported, the Department of Revenue released a scathing audit that showed the "seed-to-sale" model is terribly enforced, in many ways a relic of former drug prohibition. Now that recreational marijuana is legal in Colorado, critics like Edson say the forced vertical integration policy is a bad idea.
Edson is a proponent of the vertical integration business model when it is chosen, not required. He said it eliminates the middle man and allows businesses that can afford it to profit more from their dealings. But just because it is a smart move for some does not mean it should be the law of the land.
"We have no indication it is safer," Edson said. "It screwed over a ton of people."
Under state-enforced vertical integration, businesses interested in getting into the recreational marijuana industry need quite a lot of money. A vertically integrated business must deal with the retail and agricultural side of marijuana, which, Edson said, keeps many "mom-and-pop" style small businesses from embracing the industry.
"It hamstrings a lot of folks because of the money issue," he said.
While of obvious economic detriment to small businesses, vertical integration has been allowed to proceed with the support of big businesses, and because it has been seen as a way to keep the federal government from interfering with the industry.
But now that the Joint Committee is proposing to get rid of forced vertical integration policy, it looks as though the conventional wisdom might be changing. The proposal flies in the face of the previous recommendations of the Amendment 64 Task Force, created to advise the Joint Committee on marijuana policy.
The Task Force actually suggested many policies that critics have claimed give an unfair advantage to big businesses. Besides vertical integration, the Task Force also recommended allowing only medical marijuana dispensaries to get recreational licenses for an entire year, allowing established companies to do business without the threat of competition from newcomers. The Task Force even recommended putting a limit on the number of marijuana businesses in Colorado.
While the Joint Committee seems to have sided with small businesses against the Amendment 64 Task Force's restrictive ideas, the anti-vertical integration movement is not yet victorious. In spite of suggestive headlines from other news outlets, recreational marijuana growers and distributors will only be free to abandon vertical integration if the Joint Committee's proposals survive the House and Senate.
"The vertical integration people are counting their chickens before they hatch," Edson said.
Attorney Robert Corry Jr. wrote to the General Assembly last week that it's over-regulation and vertical integration policies that drive marijuana into the black market.
"The Legislature should give freedom a chance, and resist the temptation to stifle this new industry and kill jobs with crushing regulation and un-American barriers to entry," he wrote.
Whatever the outcome, marijuana business owners are sure to see a change.
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: watchdog.org
Author: Calvin Thompson
Contact: Contact « Watchdog.org
Website: High drama: Small businesses face uphill battle in marijuana debate « Watchdog.org
On April 8, the House-Senate Joint Select Committee on Amendment 64 voted to abolish the current, state-enforced "vertical integration" business model. While Colorado pot distributors now have to grow at least 70 percent of their own product, the joint committee will propose a bill allowing those in the recreational marijuana industry to focus on one side of the industry or the other, as they choose.
This new proposal comes after a long push from Colorado voters to do just that. The Amendment 64 campaign hinged on the idea that recreational marijuana should be taxed and regulated like alcohol, and voters approved it. It was even called the "Regulate Marijuana Like Alcohol Act." Yet the state-enforced recreational marijuana industry policy shares little current similarity with the liquor industry.
According to Warren Edson, an attorney who consults for marijuana businesses, alcohol and marijuana have opposite business policies.
"Alcohol is forced non-integration," he said. "That's what the voters approved."
So far, it is not what they have been given.
Vertical integration has always been controversial. First conceived when only medical marijuana was legal in Colorado, the policy was part of the envisioned "seed-to-sale" model. Supposedly, making marijuana dispensaries grow most of their own plants would lead to fewer drugs leaking onto the black market.
But as Colorado Watchdog has already reported, the Department of Revenue released a scathing audit that showed the "seed-to-sale" model is terribly enforced, in many ways a relic of former drug prohibition. Now that recreational marijuana is legal in Colorado, critics like Edson say the forced vertical integration policy is a bad idea.
Edson is a proponent of the vertical integration business model when it is chosen, not required. He said it eliminates the middle man and allows businesses that can afford it to profit more from their dealings. But just because it is a smart move for some does not mean it should be the law of the land.
"We have no indication it is safer," Edson said. "It screwed over a ton of people."
Under state-enforced vertical integration, businesses interested in getting into the recreational marijuana industry need quite a lot of money. A vertically integrated business must deal with the retail and agricultural side of marijuana, which, Edson said, keeps many "mom-and-pop" style small businesses from embracing the industry.
"It hamstrings a lot of folks because of the money issue," he said.
While of obvious economic detriment to small businesses, vertical integration has been allowed to proceed with the support of big businesses, and because it has been seen as a way to keep the federal government from interfering with the industry.
But now that the Joint Committee is proposing to get rid of forced vertical integration policy, it looks as though the conventional wisdom might be changing. The proposal flies in the face of the previous recommendations of the Amendment 64 Task Force, created to advise the Joint Committee on marijuana policy.
The Task Force actually suggested many policies that critics have claimed give an unfair advantage to big businesses. Besides vertical integration, the Task Force also recommended allowing only medical marijuana dispensaries to get recreational licenses for an entire year, allowing established companies to do business without the threat of competition from newcomers. The Task Force even recommended putting a limit on the number of marijuana businesses in Colorado.
While the Joint Committee seems to have sided with small businesses against the Amendment 64 Task Force's restrictive ideas, the anti-vertical integration movement is not yet victorious. In spite of suggestive headlines from other news outlets, recreational marijuana growers and distributors will only be free to abandon vertical integration if the Joint Committee's proposals survive the House and Senate.
"The vertical integration people are counting their chickens before they hatch," Edson said.
Attorney Robert Corry Jr. wrote to the General Assembly last week that it's over-regulation and vertical integration policies that drive marijuana into the black market.
"The Legislature should give freedom a chance, and resist the temptation to stifle this new industry and kill jobs with crushing regulation and un-American barriers to entry," he wrote.
Whatever the outcome, marijuana business owners are sure to see a change.
News Hawk- Truth Seeker 420 MAGAZINE ®
Source: watchdog.org
Author: Calvin Thompson
Contact: Contact « Watchdog.org
Website: High drama: Small businesses face uphill battle in marijuana debate « Watchdog.org
