As Cannabis Markets Evolve, CO Proves the Underground Market Can Be Eliminated

Creativan /
Creativan /

While traditional conservatives have been opposing legal cannabis as they claim the underground market would be unable to be controlled, Colorado is proving that this is a false narrative. With law enforcement processing a record-low number of illegal cannabis arrests in 2022, the city of Denver has submitted a paper showing that its legal framework is working properly.

Looking deeper than the surface, the paper outlines the number of medical and recreational dispensary licenses and discovered that the number of recreational facilities had grown in pace with the number of medical licenses that ended. With tax revenue for the city going into their social equity programs, they are trumpeting this as a win for everyone.

With legal recreation retailers first opening their doors back in 2014, the city has seen a 74% decline in illegal marijuana incidents.

Outgoing Democratic Mayor Michael Hancock penned an introduction to the report where he trumpeted their success. “As legalization continues across the country, Denver serves as a resource for guidance on how to effectively implement and manage a regulatory framework for legal marijuana. The city’s dedicated team of experts manages a complex and ever-changing regulatory and licensing process.”

As he continued, “This work includes legislation to create, improve, and clarify ordinances, management of education and health initiatives, social equity, coordination of enforcement efforts, and allocation of resources—all in concert with the industry and the community,” the outgoing mayor who leaves office later this month said. “I am proud of the foundation my Administration has built over the past decade and their dedicated efforts to ensure a bright future for this industry.”

This kind of shift is the result of good public policing and policymaking.  It is also the result of decreased cannabis use. With sales dropping 21% statewide and 28% locally in 2022, the one-year decline is big news. Yet Colorado still took in $54,841,877 in cannabis tax revenue in 2022, per the report. With most of this money going towards combating homelessness and affordable housing, the state is doing everything it can to keep CO affordable as California exiles continue to flock to the state.

Mayor Hancock, who was originally opposed to the idea of recreational marijuana in Colorado, is now proud of the example they have set for the rest of the nation. “Denver is the gold standard for cannabis regulation and a worldwide leader. Denver has brought unlicensed operators into compliance and created a collaborative model of marijuana management. We developed ordinances to regulate, license, and tax medical and retail marijuana. Denver has embraced a management model that is quick, responsive, and nimble in collaboration with a fast-developing and innovative industry.”

With much of the nation wondering where they can tax next to cover the costs of things we have neglected maintaining or replacing for ages, cannabis stands as the solution to the problem. With how easy it is to grow, many have long hypothesized that people would simply grow their own. However, as the Colorado market has shown, much like alcohol many prefer the reliability and consistency of walking into a store to get their favorite choice over making their own.

That consistent product is why legal recreation makes sense. While the race to the bottom will always be there, the majority who will want a quality product will be more than happy to purchase it on the legal market. Colorado was smart, and they didn’t overtax their customers, and they made certain the product came first. A consumer-forward marketplace is what places like NY and, to an extent, MA have made massive mistakes with and now are coming up incredibly short.

Eliminating the underground and the cartels will never happen. With a race to the bottom, those two will always be king.  However, with commonsense, some proactive communication, and a strong push, recreational cannabis can be the cash cow the nation needs.