Sorting out legal marijuana

Like it or not, Durango poised to join Colorado’s exclusive club status when recreational pot goes on sale in the fall

Keywords: Marijuana,
Several types of marijuana are available from retail dispensaries elsewhere in Colorado. The city’s moratorium on applications expired July 1. So far, it has received four applications for recreational marijuana shops in Durango. Enlargephoto

JERRY McBRIDE/Durango Herald

Several types of marijuana are available from retail dispensaries elsewhere in Colorado. The city’s moratorium on applications expired July 1. So far, it has received four applications for recreational marijuana shops in Durango.

After a long, slow public debate, Durango is poised to join other Colorado cities in a first-in-the-nation public policy experiment with legal retail marijuana.

Retail marijuana is expected to go on sale in Durango sometime this fall. The city of Durango ended its moratorium on accepting applications July 1.

With that, Durango will join much of the rest of Colorado in legalizing it, as marijuana advocates have urged for years. The verdict will be felt nationwide.

The city of Durango has received four land-use applications for retail marijuana shops. Three propose to “co-locate” with existing dispensaries. However, one dispensary, The Acceptus Group, has applied to open a retail shop in a downtown second-floor location at 965½ Main Ave.

Local dispensaries are not selling retail pot right away – it will take an estimated three to four months to obtain the necessary state and local licenses and begin selling the product.

The advent of legal marijuana for all adults has been a long time coming for Durango. While local elected officials favored a deliberate approach as they carefully crafted regulations, retailers in Denver, Telluride and other Colorado cities have been selling retail marijuana for months.

Durango’s relatively slow response came despite strong local support for Amendment 64, the 2012 constitutional amendment that led to legal recreational marijuana. La Plata County voters backed it with 62 percent approval, higher than the 55 percent of voters statewide.

The go-slow approach has not gone unnoticed.

“They’re about a year behind Carbondale and other places that have been doing it successfully,” said Jackson Clark, owner of Toh-Atin Gallery in Durango.

Clark and other local business leaders don’t expect much to change once recreational marijuana becomes available.

“It’s legal, and I don’t think it’s caused any major problems,” Clark said.

Some local residents have voiced concern that legal marijuana could harm Durango’s image and hurt two of the city’s most lucrative businesses: tourism and real estate. But Clark is among those who think the worries are overblown.

“We have plenty of alcohol-related problems that I think are much more severe than you’ll see with this,” he said. “I don’t really see a downside.”

Durango could receive more pot-related tourism than other Colorado cities because of its proximity to three states – New Mexico, Utah and Arizona – that have stricter marijuana laws.

A report released last week by the Colorado Department of Revenue found that tourism is driving retail marijuana purchases throughout the state, but especially so in mountain towns.

Out-of-state visitors account for about 44 percent of retail marijuana demand in the Denver metro area, and 90 percent in heavily visited mountain communities, according to the report. But some tourism operations don’t expect much impact.

Rod Barker, owner of The Strater Hotel, said he “can’t imagine it’s a topic of too much interest” to guests of his historic Main Avenue hotel. Guests are more interested in Durango’s natural setting, he said.

“We have a beautiful town to visit, and the tourists that I see here coming through the Strater are coming for the reasons we’ve had all of these years,” he said.

Barker, sharing a popular sentiment, isn’t eager for the city to become known for marijuana.

“So far, we’ve done a pretty good job of de-emphasizing it,” he said.

Some communities, including Bayfield, Ignacio and Montezuma County, have banned retail marijuana operations.

The state report estimated total marijuana demand at 130 metric tons this year, much higher than initial estimates.

The report attributed the higher-than-expected demand to heavy use by daily marijuana smokers. Heavy users account for 70 percent of all marijuana demand in the state, the report said.

The report was produced by the Marijuana Policy Group, a collaboration between the University of Colorado, Boulder, Business Research Division and BBC Research & Consulting in Denver.

Overall, medical marijuana continues to outsell retail marijuana. Many heavy users have medical marijuana cards, while the retail shops are attracting tourists, the report said.

Retail marijuana carries an additional 10 percent sales tax. The hefty additional tax makes it cheaper for regular marijuana users to continue buying medical pot rather than shifting to retail. The report found “conversions from medical to retail consumption is relatively low.”

Local governments may also see an impact in the form of a boost in tax revenue.

The city of Durango did not forecast any marijuana-related revenue for its current 2014 fiscal year budget.

City Manager Ron LeBlanc said he did not feel comfortable forecasting marijuana revenues without an established track record.

“The interaction between revenues generated by medical marijuana and recreational marijuana has not been documented. We simply do not know if the customer will shift from one to the other,” LeBlanc said in an email response to questions. “We also do not know how the free market will react to the availability of these products.”

Marijuana operators are maintaining a public silence as the process moves forward. Messages for local dispensary owners seeking comment for this story were not returned.

The city’s revenue from medical marijuana so far has been modest.

For the first five months of the year, the city brought in just over $75,000 in medical marijuana tax revenue, accounting for only 1 percent of Durango’s sales-tax revenue. That was less than sporting goods, for example. Liquor stores brought in almost triple the revenue of medical marijuana.

Colorado’s first-in-the-nation experience with legal recreational marijuana has brought a bright glare of media attention typified by New York Times columnist Maureen Dowd’s instantly Internet-famous “panting and paranoid” trip with a marijuana edible in a Denver hotel room.

Some local residents just want to get through the initial phase and into a new normal. Call it green fatigue.

“We’re all tired of hearing about it,” said Roger Zalneraitis, executive director of the La Plata Economic Development Alliance. “We’d all rather talk about something else.”

cslothower@durangoherald.com