Challenges Of Pot Smoking In Colorado

Though Marijuana has been legalized in 29 states of the US including the Washington DC, the industry faces a lot of challenges and problems. Colorado legalized the cultivation and use of recreational marijuana in 2014. The dispensaries that sell the weed face a lot of problems and challenges. This article will describe key challenges that face the industry in Colorado after legalizing it.

Federal Laws

The federal laws regard marijuana as an illegal drug. Though people have exercised their state rights to pass the marijuana laws, the risk of prosecution looms large for those who might flout the laws set by each jurisdiction. Furthermore, federal laws regard cannabis as schedule 1drug which is dangerous and has no basis to be used for medicinal purposes.


The industry is massively taxed. In some states, the selling marijuana are taxed 70%. Although IRS does not allow tax deductions for businesses that deal with illicit substances, states are reaping a lot from tax revenues generated from Cannabis. In Colorado, the revenue from taxation of Marijuana hit $70 million. The heavy taxation of this industry is a big challenge to the dispensary owners because it appears like they are only generating income for states.

Banking challenges

Due to the classification of marijuana federally as an illegal drug, banks do not accept deposits from marijuana proceeds. The banks are also concerned about certain negative activities associated with cannabis particularly sale of the drugs to children and increased incidents of driving while being impaired. Legislative efforts to enable banks accept deposits from cannabis related money have hit a snag.

Black Markets

Due to the heavy taxation imposed on dispensaries selling marijuana, there has emerged a significant number of businesses offering cannabis products in the black market. Statistically, 59% of cannabis buyers purchase marijuana at the dispensaries. This means that the remaining 41% buy the marijuana products at the black markets. The buying of cannabis products at the black markets means that legally existing dispensaries miss the opportunities to do business with the clients who frequent the black markets.

Cash, crime and security

As cannabis business is federally considered illegal, the stakeholders in this industry do not have banking relationships. The cannabis industry is very lucrative. This means that there is a lot of money on the hands of businesspeople.  Keeping such big amounts of money is very risky as you are likely to attract criminals. Crimes in Denver and Seattle have increased since the legalization of marijuana.

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