Wednesday, January 8, 2014

Pot Prices Double as Colorado Begins Recreational Sales

At Medicine Man Denver, a shop that began selling marijuana for recreational use last week, people waited in line to get their first taste of legal weed. Some shouted “Freedom!” to the cheering crowd as they walked out with bags of dope. They also paid about double the cost of medical marijuana.

Customers were charged $45 for an eighth of an ounce of recreational pot, compared with $25 for an identical amount that he sells for medical purposes, said Andy Williams, the president and chief executive officer.

“They’re not used to coming into a facility and paying $25 an eighth, so when they come in, it’s just whatever the price is,” Williams, 45, said by telephone. “Having the ability to buy safe, reliable, quality marijuana in an environment that’s fun and exciting sure beats going in a back alley and saying, ‘Hey buddy, you got a bag?’”

The retail price of marijuana in Colorado has doubled since Jan. 1, when the state became the first to legalize sales to anyone 21 and older. Pot for recreational use sells for an average of $400 an ounce, compared with $200 an ounce that Colorado retailers collect for medical marijuana, said Aaron Smith, executive director of the National Cannabis Industry Association, a Washington-based trade group.

“That’s just supply and demand,” Smith said. “As more businesses open and the businesses get a sense of what the demand is and are able to meet it, the prices will go back down.”

Taxes Charged

About 21 percent in state and local taxes is charged on the sale of recreational dope, said Amber Miller, a spokeswoman for the City and County of Denver.

Colorado voters approved a ballot measure in November 2012 to decriminalize the drug in defiance of federal law, which still classifies marijuana as an illegal substance. A similar measure was approved in Washington state, where shops are set to open later this year.

The changes come as marijuana use is being redefined in the U.S. Twenty states and the District of Columbia have legalized medical marijuana use, and New York Governor Andrew Cuomo is planning to revive a 1980 law to allow some hospitals to make use of the drug for patients with cancer, glaucoma and other illnesses.

Shop owners in the Denver area say they’ve raised prices in response to the high demand as consumers formed lines around the block to buy the drug legally.

Bud Med, a shop in the Denver suburb of Edgewater, rolled out a green carpet for consumers waiting in the snow on the first day of sales, said Brooke Gehring, 33, owner of Patients Choice of Colorado, which has four shops including Bud Med. Customers asked for their receipts with the Jan. 1, 2014, date to keep as a memento, she said.  Continue Reading...