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by Eric Vengroff, Senior Financial Analyst, Cannabisdaily.today
The exposé that the CBC aired a few days ago (embedded in this article) illustrates the sad state of affairs in certain areas of Colorado, the first state in the U.S. to pass legalization laws for the recreational consumption of Cannabis. With this bold and pioneering move Colorado made in 2014, came a new sense of optimism that other states would follow suit and eventually the U.S. Federal government would eventually ease up on the ‘War on Drugs’ as it applied to this segment of consumers. As we know so far, with an Attorney General who has vowed to increase the pressure on regulation, enforcement and criminal sentencing, this hasn’t happened, although 58% of the U.S. states have laws in place regarding recreational or medical use.
The patchwork of regulations and implementation has given rise to the opportunists and criminal elements already engaged at some level in the illicit weed business to ramp up efforts, an in one county featured in the story, an estimated 1 in 10 homes contains an illegal grow-op in a state where consumption is legal. Go figure. Actually, you don’t need to be a mathematician, sociologist or economist to figure this one out. The bulk of the illicit production is going to other states, where legalization rules are either nebulous, not well-implemented or completely non-existent. Whereas export of cannabis across state lines is illegal for licensed growers, unregulated production isn’t bound by the same moral, ethical, or legal guidelines.
In speaking with some U.S. industry insiders at yesterday’s Lift & Co. Expo in Toronto, a couple of people said to me that Colorado doesn’t have it as bad as some other states such as Washington and Oregon, where reports of $0 spot prices for the commodity and burning of cannabis crops has been documented. In fact legal recreational consumption in Colorado reported a 23% increase in March, according to Marijuana Business Daily, topping $105 million, the highest monthly sales since the program’s inception. The reason cited by these experts was that Colorado, unlike the other two states, is a heavily tourism-based economy, so it attracts a lot of visitors from outside the state and country looking for that ‘rocky mountain high’ – interesting.
No doubt the CBC is documenting some of these developments in advance of the coming legalization juggernaut that has now beset Canada. With its own set of patchwork regulations, and each province examining their own legislation through the lenses of black market elimination, increasing provincial revenues, or strengthening enforcement and road safety, are there any nasty developments in store for Canadians?
The information and opinions presented here are that of the analyst and do not represent the thoughts and opinions of this website. The analyst does not own or represent any of the companies listed in this article and receives no compensation from any party mentioned in this article. Readers are urged to do their own research and due diligence and should seek advice from an independent financial advisor before making any financial investment.