January 7, 2013

Weekly Wrapup: Cannabis Businesses Springing Up in Colorado + Another Challenge For AZ MMJ

Image for wrapup of medical marijuana news

And they’re off! Just weeks after Colorado officially legalized marijuana, entrepreneurs are already scrambling to start clubs, groups and businesses focused on the recreational use of cannabis.

Some examples:

– A resident of Del Norte, located about 200 miles south of Denver, opened a marijuana club on New Year’s Eve. The business model: sell coffee and merchandise in one area and offer free samples of marijuana – and the ability to smoke it on-site – in another. (Unfortunately, the owner closed the marijuana portion of his business within hours because he rushed the opening and his landlord became spooked)

– A noted Denver MMJ attorney and the owner of a local medical cannabis consultancy have formed a group called Club 64 to essentially organize indoor smokeouts at different locations. The first gathering took place on New Year’s Eve in a store that sells hemp-based clothing. The business model: provide a venue for locals to smoke their own stash/share with others – and buy food and alcohol – in a social setting for a $30 admission fee.

– A former dispensary owner has started the Hive Co-Op, a “cannabis-friendly” coffee and tea shop in the town of Lafayette. The business model: allow patrons to smoke their own cannabis – as well as trade and share with other visitors – for a $5 cover charge while they sip coffee or tea (for an additional charge, of course).

– Two entrepreneurs in Colorado Springs are planning to open a cannabis club in or near the downtown area in the next few months. The business model: let visitors smoke their own cannabis in a controlled environment and offer everything from juices and organic products to cooking classes.

These entrepreneurs are all wading up to their necks into the unknown – and taking on some significant risks in the process.

None of these clubs/businesses are actually selling marijuana. But they’re all unregulated, as the state has not yet set up rules governing the recreational cannabis industry. In other words, it’s unclear if these operations are even allowed under state law. Marijuana also is still illegal federally, and no one is quite sure how the government is going to respond. So there’s a chance these clubs and businesses could essentially be shut down overnight.

At the same time, it’s unclear how marijuana fits with the state’s indoor smoking law, which bans lighting up at workplaces and public spots. There are some exemptions – including private residences and businesses with only a handful of employees. But the state has not yet weighed in on whether these marijuana-focused operations violate the smoking law.

The aggressive entrepreneurship is causing a rift in the cannabis community. While some laud the efforts, others say these entrepreneurs are violating the spirit of the new law, which was crafted to give the state time to effectively and responsibly regulate cannabis.

Either way, expect more people to test the waters in the months to come.

Also last week, we saw yet another political official attempt to dismantle Arizona’s medical marijuana law. Rep. John Kavanagh submitted a bill that would put the state’s medical marijuana law back on the ballot for another public vote, saying he thinks many locals were misled the first time around and now might want the law repealed. In an attempt to tarnish the MMJ program, Kavanagh also pointed to a recent report that found some high school students obtained marijuana from registered cardholders.

MMJ advocates say cannabis use in the state is actually down and point out that this study and others show a large percentage of teens get alcohol and prescription pills through those who can legally buy it. They also suggest that some lawmakers are more interested in personal and professional gains than what voters want.

“John Kavanagh wants to continue fighting Arizona voters by using one data point out of context while ignoring the high abuse rates of prescription drugs in the same report,” said Moe Asnani, a partner at the MMJ consultancy Arizona Dispensary Solutions. “The business community is united in preventing the diversion of medical marijuana but we are adapting to the fact that politicians turn to this issue as a springboard when they find themselves at a career plateau.”

It’s a desperate, last-ditch attempt to sink a law that has proved resilient in the face of many challenges. Several other officials – including the state’s governor – have tried unsuccessfully to block the law. So far, they’ve lost every major court battle, and they’re beginning to look quite foolish, especially when you consider that there’s a lack of public outcry on the issue.

Other top stories in MMJ Business Daily last week:

Illinois Medical Cannabis Measure Sputters Out

Changes Ahead for LA Dispensaries?

5 Medical Marijuana Advertising Strategies


  1. This blog post has a good twist about the Arizona MMJ situation: http://www.theweedblog.com/arizona-rep-john-kavanagh-wants-more-teens-to-use-marijuana/

  2. This Rep John Kavanagh is just another ‘no talent’ politician collecting a salary for ‘no meaningful agenda”. He is the major reason we have to revamp Congress. Can anyone tell me WHY people like him exist?

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