A 3-Point Plan for Marijuana Distribution in the City of Pueblo

March 27, 2014

An Open Letter to the Pueblo City Council,

This is a unique moment in American history and Pueblo has a once-in-a-lifetime opportunity to make a huge difference in the lives of ordinary citizens. The question is will Pueblo City Council see this as a unique economic opportunity and behave like entrepreneurs?  Or will City Council allow the “Chicken Little” voices in our community to carry the day and do nothing?

More than 80 years after the prohibition of alcohol was repealed in 1933 we now have an opportunity to invent a market for marijuana. City Council has begun debating how a legal market might operate within the City of Pueblo.  So far, City Council has been reluctant to allow retail distribution of recreational marijuana within city limits. I agree that a cautious approach has been prudent but I’m now convinced that further delay will cost Pueblo an opportunity to control local distribution and participate in the market opportunity. I worry that business interests from Denver and elsewhere are likely to dominate the business landscape in this new market unless City Council proactively implements a system designed to maximize benefits for the local economy.

Before I layout some ideas let’s address those who continue paranoid hand-wringing over perceptions of marijuana as a poison that will infect and destroy society. It’s time to read the writing on the wall. First, marijuana is already here and it’s here to stay. Do you prefer that it remain a black market with criminals controlling distribution and the resulting cash cow generated by undeniably persistent demand? If you think marijuana prohibition is or was a good idea you’re clearly operating with your head buried in deep sand. Billions of US tax dollars spent over decades and marijuana use is no less prevalent. Only Mexican Cartels seem to be benefiting from prohibition. Second, marijuana is far less harmful than alcohol. Have you ever heard of a young person dying because they choked on their own vomit after smoking too much weed? No, because it doesn’t happen – but that’s what alcohol can do if consumed in excess. The CDC estimates that excessive alcohol use kills 88,000 people per year in the U.S. So stop being a hypocrite who enjoys a regular 3 martini pre-dinner routine but won’t allow neighbors to smoke a joint on their front porch. Third, marijuana prohibition is over. There may be a few speed bumps along the way but pot prohibition is ending. Not just in Pueblo, not just in Colorado, but all over North America. Get used to it. Your opposition is akin to the 1999 anarchist-led globalization protests in Seattle. You’re too late. That ship has sailed.

What we should focus on now is how to optimize marijuana distribution in Pueblo. The legal marijuana market in Pueblo should, first and foremost, benefit the citizens of Pueblo. Rather than ceding control of the market to “ganga-preneurs” from Denver or other big money corporate interests from outside our community, we should take this opportunity to build a distribution system that generates both tax revenue and opportunities for Puebloans to cash in on demand for cannabis. I’ve heard local politicians pay a lot of lip service to creating jobs and improving the economy. Well, here is a perfect job creation opportunity, served up on a platter. All you have to do is allow Puebloans to participate.

There are 3 key links in the marijuana (or any other material) supply chain: production, wholesale distribution and retail sales. There’s no good reason why Pueblo can’t control all three links within the local market and keep the lion’s share of pot profits within our own community.

Here are my suggestions for making that happen:

Production. Pueblo County licensing of grow operations has thus far focused on licensing larger scale production with a variety of interested parties (most from out of town as I understand it) applying to grow on rural acreage in the County. The licensing fees are ridiculously high. Add to that the costs to acquire appropriately zoned land and facilities, indoor growing equipment, seeds, soil, etc and 99.9% of would-be entrepreneurs in Pueblo are priced out of the market. Why must we limit production to a scale that requires so much up-front capital? I propose establishing an individual grower license program. Allow individuals to grow cannabis on their own property. Make the application simple and the license fee affordable – maybe $100 per year. This is happening anyway – lots of people growing illegally to supplement their income. Why not legitimize these small grow operations and collect taxes? Why not give citizens with a green thumb (yes, pun intended) an opportunity to produce and prosper? City Council, do you favor job creation? Boom. You just created 1000+ jobs.

Wholesale. Local growers need a centralized market where they can readily sell their crop. The best model for wholesale marketing is the agricultural cooperative structure like grain coops that exist throughout the American Midwest. If you drive through the corn belt in Iowa or Illinois or Indiana you’ll see large grain elevators in every community. These aren’t simply storage facilities, they also serve as the central market place where local farmers are able to sell their harvest at prevailing market prices. I propose creating a cannabis growers cooperative in Pueblo tasked with the responsibility of purchasing marijuana from properly licensed growers located in Pueblo County. The coop could also test, package and label marijuana for wholesale and retail distribution in Pueblo and throughout Colorado. There’s another 20+ jobs created to staff the coop.

Retail. To properly distribute marijuana we need a network of appropriately located stores within the city. Politicians who think that Pueblo West locations are satisfying demand are living in a fantasy world. No one wants to drive out to PW to pay a premium for low grade ganja so they are continuing to buy from their existing, illegal source. To successfully legalize you must also kill the black market. Store locations should be conveniently located but scrutinized to minimize exposure to young people. They should be owned by local residents and they should be closely monitored by a local control board to be sure they aren’t selling illegally to minors. Wait…we already have such a network already in place. These locations are licensed to sell products that only adults, age 21 and over, are allowed to purchase. I’m talking of course about liquor stores. I propose allowing retail liquor stores to sell packaged marijuana products.

Now, if you read my blog regularly you’ll know that I’m biased because I happen to own a liquor store in Pueblo. And, even though the store is currently for sale I recognize this as a clear conflict of interest as it would most likely increase the value of the business. But, I still think the arrangement makes sense. Many people don’t want to live next door to a liquor store or a pot shop. That’s why liquor stores aren’t located next door to parks, schools or single family homes. But, the distribution of substances that should not be in the hands of young people is exactly what liquor stores are set up to provide. Another benefit is that local liquor stores are not controlled by large companies. They are all small locally-owned businesses. Shouldn’t local small businesses and local small business owners be higher on the priority list than companies from outside of Pueblo? Wouldn’t it be better to trust marijuana distribution to people who are well known in the community? I think this makes more sense than having a long series of volatile public meetings where City Council approves zoning rules that lead to new pot shops opening in controversial locations. Do we really need to invite such dramatic conflict? Liquor license holders and their store locations have already been vetted. Why reinvent the wheel?

So there you have it. My 3-point plan for marijuana distribution in Pueblo.

City Council members: Puebloans have voted to legalize marijuana and they voted you into office to work for them. Please don’t pass up this economic opportunity just because you calculate that vocal opposition might score points with the Chicken Little wing of your political constituency. A local grower’s cooperative could really help a lot of people in Pueblo and it won’t hurt you or your constituents one bit.

Please give Pueblo permission to produce and prosper.