World’s First Legal Recreational Weed Sales Begin in CO

Marijuana, News, Taxes

On January 1st 2014, Colorado made history by being the first place in the world to allow the legal, regulated sale of marijuana for recreational use. Approximately 30 stores, including 18 in the city of Denver, opened Wednesday and served hundreds of people who had lined up for hours to be among the first to buy pot legally for recreational use.

Legal, but Heavily Regulated

In November 2012, citizens of both Colorado and Washington State voted to legalize marijuana. This past Wednesday marked the first day of sale in Colorado; Washington State is expected to follow suit later this year. They are the only two states to have legalized marijuana for recreational use, though 20 states plus D.C. have legalized it for medical use.

The cultivation, distribution, possession, and consumption of marijuana are now legal in Colorado but are heavily restricted. The industry will be overseen by the Marijuana Enforcement Division of the Department of Revenue, which is responsible for issuing business licenses. Until July 1st of this year, only medical marijuana facilities “in Good Standing” may apply for a Retail Marijuana Business License. So far, 136 businesses have received such licenses, of which about 30 were operational on the 1st.

Like alcohol, the sale of marijuana will be restricted to adults over the age of 21 with ID. Residents of Colorado may purchase up to 1 ounce and non-residents may purchase up to a quarter of an ounce. The laws allow for limited unlicensed production: individuals may own up to three plants for personal use.

Retailers are selling multiple varieties of cannabis in bud form (average retail price is around $180 per ounce), and many also offer a selection of edible treats containing marijuana, including brownies, cookies, and candies. No matter what form it comes in, it may only be consumed on private property with the owner’s permission, and it must be consumed within the state of Colorado.

Potential Stumbling Blocks For Colorado

Because Colorado’s law is a first for the nation and a first for the world (even in the Netherlands, where it is readily available for purchase, cannabis is technically illegal), lawmakers and citizens alike are anxious to see if the new system works.

Federal law still outlaws cannabis, even if state laws legalize it. The Controlled Substances Act lists cannabis as a Schedule I drug, along with heroin, LSD, methaqualone, and peyote. Under federal law, cultivation and distribution of marijuana is a felony and possession is a misdemeanor. Despite its legal status, the federal government has said it will not challenge states that vote to legalize it or pursue individuals who purchase cannabis. However, as administrations change, that policy could change.

As with alcohol, law enforcement will have to deal with DUIs and public consumption of marijuana. Non-residents in particular must be careful not to be caught breaking the law, since they are not allowed to take cannabis out of state and must be careful where they consume it. The threshold for a DUI is currently 5 nanograms per milliliter of THC. Punishment for violating the law ranges from a fine to jail time.

Many opponents of the new law are concerned about the message it sends to young people. Founder of Project SAM (Smart Approaches to Marijuana) Kevin Sabet is concerned that the industry will “downplay the effects of addiction” and will advertise to kids. One response to this is heavy restrictions on marijuana advertising, akin to restrictions on cigarette advertising, in order to prevent minors from being targeted. Retailers may also not advertise outside the state to promote marijuana tourism.

Colorado Expected to Benefit From New Marijuana Laws

Proponents of the new law have higher expectations. The decriminalization means that otherwise law-abiding citizens will no longer be arrested and imprisoned for cannabis possession. Marijuana tourism is expected to bring money to the state, as are taxes. Taxes on cannabis  – which include a 15% excise tax and a 10% sales tax – are expected to bring in $67 million annually.

Many are hoping that the state will see such an influx of tax revenue (along with no increase in marijuana-related crime) that other states will follow Colorado’s lead. Alaska and Arizona are considered the states most likely to next legalize marijuana for recreational use.