Marcelo Silva: Why Marijuana is the Truth in a Supply Model with Hundreds of Stores

Former Denver Mayor Michael Hancock broke the law by selling marijuana alongside lawful alcohol, he pled to past his own penalties and blamed past elected officials. By not only promising tax money but doing so in a few hours in the election year, he was elected with the backing of independent candidate Dan Maes.

Former Colorado Governor Bill Ritter broke the law during his gubernatorial election in 2006, lying to voters on a questionnaire about the effect of legalizing marijuana.

Denver is one of several different localities trying to make it safe for marijuana merchants to do business on a local level. The regulation is extremely complicated because of the law-making changed over the last decade. The reality is that local jurisdictions have allowed special events to proliferate while prohibiting cannabis sales and distribution. Some localities have permitted cannabis clubs at city council subcommittees. At least one county, open for four hours each weekday, is now preparing its own form of a pot shop.

So the industry is everywhere as local news reported this past week.

The chain store or even large wholesale sales firm would be a monster to overcome. The health and safety of consumers are responsible for the variety of packaged goods that we need in the retail cannabis industry. Decades ago the Internet gave us hundreds of shopping options for a host of favorite gifts. But when we enter a store, a person wants to take control of the shopping experience and don’t want to hear about directions on website content.

When I was governor of Vermont I visited the small shop in Colorado where I bought my first plastic mason jar of marijuana, more recently, I’ve been to a number of stores and can explain why the buyers love the places in which they buy. It all depends on the philosophy of the store owner.

Over the decades the marijuana culture has gotten drunk on its own popularity. It is not a large enough market size and the profit margins are not enough for most of the entries.

To keep in business there has to be the ability to play ball with local transportation regulators, environmentalists, union labor, etc. A large chain store would not have these required protections. With hundreds of outlets, they would be vulnerable to a market test of every store, which, by definition, would be anecdotal. This research could tip the scales of public opinion one way or the other.

Local business owners and advocates believe that cannabis is a great public health option. Marijuana fuels and strengthens communities and brings in hundreds of jobs to communities in western Colorado and the United States. Colorado ranks second only to Florida as the most productive state from economic spending on legalized cannabis. In 2015 Colorado had 875,000 citizens, and hosted an estimated 2,056 cannabis retailers. The average per capita spending was nearly $40 dollars.

The marijuana industry will determine the fate of local governments. The supply of marijuana is almost endless. The local market is mostly internet sales only, so local governments believe it is possible to control local markets. The limited amount of seed money does not allow for competition, but the rule for market funding is plentiful subsidies and few real competition. Most municipalities will fall into line because the demand is so great and needs one or more stores for regulation of local businesses.

Marcelo Silva is a graduate from Montana State University and adjunct teacher at Humboldt State University.

Leave a Comment