Kabbooooom$$$ Marijuana sales means green for non-pot businesses, too
Dennis Huspeni Tuesday, December 24, 2013,
Colorado businesses directly selling recreational marijuana for the first time come Jan. 1 aren't the only ones looking to profit from Colorado's newest retail industry. Industry experts and business owners see a lot of green on the horizon.
Businesspeople who could benefit include lawyers, accountants, construction workers, landlords, advertisers, consultants and indoor growing-supply equipment providers.
“Ultimately, this industry is going to help a lot of small businesses and create thousands of jobs,” said Mike Elliott, executive director of the Medical Marijuana Industry Group.
> COVER STORY: Marijuana a budding industry for Colo.
> Behind the cover story: Dennis Huspeni on Colorado's budding pot industry (Video)
New businesses are already springing up to capitalize on the wave of legal weed sellers. Examples are CannaVacation LLC — which bills itself as “the nation’s first legal cannabis vacation guide” — and Rodawg Holdings LLC, which manufactures child-resistant packaging for cannabis products.
“This is a way of venturing into the cannabis industry, without physically handling cannabis,” said William White, owner and founder of CannaVacation, based in Manitou Springs. “I wanted to remain 100 percent federally legal.”
He was referring to the fact that, despite a voter-approved measure legalizing recreational pot sales in Colorado under state law, selling marijuana is still illegal under federal law.
It's the reason banks won't do businesses with dispensaries: Under FDIC rules, banks are not allowed to do business with operations dealing with what the federal government still considers an illegal drug.
“I think we’re going to have a lot of tourists here,” said Chloe Villano, CEO of Clover Leaf LLC, a Denver-based marijuana business consulting company. “We think it’s going to be really good for the economy overall.”
Villano has been having cannabis business symposiums and created what she calls the first “approved, regulated, and licensed by the Colorado Department of Education’s Private Occupational School Board” marijuana business classes through Clover Leaf University.
> Colorado approves 348 marijuana sales licenses
> More DBJ coverage of marijuana in Colorado
“You know during the gold rush, it was good to be making picks and shovels,” Villano said.
The Denver Business Journal has reported on how the state's existing medical marijuana industry has benefited metro Denver industrial space owners.
Commercial real estate experts predicted that more industrial space will be leased, aging industrial buildings will be improved and owners will be collecting rents — often in cash — 30 percent higher than asking rates.
Several sources said there’s already at least 1 million square feet of industrial space, if not more, being used for cannabis growing operations in metro Denver.
While the jokes abound for new retail marijuana users getting the munchies, food service companies here said they stand to benefit.
James Samara, co-owner of Lucky Pie Pizza off 16th and Wazeee on the Mall, testified recently in favor of a local dispensary’s application to add a retail sales store and growing operation, saying it would be “great” for the neighborhood.
“This will drive energy to an area that’s been relatively slow the last couple of years,” Samara said of LoDo Wellness Center’s retail application.
Lucky Pie has had no problems with the center’s existing clients, he said.
While potential advertising outlets like Westword, Denver’s weekly alternative newspaper, has been accepting marijuana business advertising and dedicated a full-time reporter to the beat for years, the decidedly more-mainstream Denver Post recently created a marijuana-beat editor position and has devoted part of its website to marijuana coverage.
“We’re happy to have almost any kind of advertising to pay for journalism,” said Westword’s Patty Calhoun, editor.
Joshua Gordon, CEO of Florida-based Rodawg Holdings LLC, revamped the company’s packaging products to gear up for retail sales and landed at least two Colorado clients. The company got a $500,000 investment to expand its product line after Amendment 64 passed, he said.
“This is a totally new market, and a new product line, so it will be interesting to see how it goes,” Gordon said.
As far as the money to be made by retail stores, the only baseline to make estimates is how much medical marijuana has been sold here.
In 2012, there was about $185 million worth of marijuana (and other products like T-shirts) sold at dispensaries, according to the Colorado Department of Revenue’s Marijuana Enforcement Division.
That revenue is based of $5.4 million of sales tax revenue collected by the state in 2012, at the rate of 2.9 percent. Sales tax on retail marijuana will be much higher, up to 30 percent depending on municipal taxes added to state sales and excise taxes. Sales tax revenues for 2013 were not available. http://m.bizjournals.com/denver/news/2013/12/24/more-on-the-cover-story-dennis-sidebar.html?ana=twt&r=full