States go to pot as 'green rush' of business flood coffers
On Election Day, three U.S. states, the District of Columbia and Guam are set to vote on recreational and medical marijuana legalization measures. As more Americans have access to legalized pot, entrepreneurs are lining up to offer cannabis-based products and services.
Colorado, one of the states that pioneered the legalization movement, has been a big beneficiary of this trend.
"So many people have come to Colorado, specifically, to take part in this," said Ricardo Baca, marijuana editor at The Denver Post in Colorado. Baca thinks a "green rush" in business and migration is coming to the first state to legalize recreational marijuana.
Entrepreneurs in Colorado are scrambling to develop marijuana-related consumer products, cannabis-infused food and technology platforms designed for marijuana from seed to sale. "I really do believe that the [best] is yet to come, " Baca said. "It's never happened before in the modern world and they want a piece of it."
Since legalizing pot more than a year ago, Colorado has seen a green rush of its own—in more ways than one. The state's Department of Revenue reported collecting nearly $8 million in total marijuana taxes, licenses and fees in August. For the same month, consumers purchased more than $33 million in recreational cannabis.
The state claims a 2.9 percent retail and medical sales tax, a 10 percent retail marijuana sales tax and a 15 percent marijuana excise tax.
One barrier to the growth of the industry is the dearth of financial services options available to marijuana businesses. Due to a federal prohibition on banks participating in the sale of what the U.S. classifies as a controlled substance, many entrepreneurs struggle to obtain basic banking services or business loans. They are forced to operate mostly in cash, until banks agree to provide services.
"This is starting to happen," Baca said. "But it's really the infant stages and many banks are still way too afraid to touch this business and touch this money."
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