(4 of 4)
The industry has mulled several stopgap solutions for its surfeit of cash, from the digital currency Bitcoin to state-licensed banks. "I question whether we're being set up for failure," says Michael Elliott, executive director of the Medical Marijuana Industry Group. "The feds have always said this industry is going to cause crime. It's almost like they're trying to make that come true."
What's happening in Colorado may soon be repeated elsewhere. Washington State is preparing to launch its own recreational-pot market later this year, and pot reformers plan to mount legalization campaigns in a handful of other states by 2016. Within five years, legal weed will be a $10 billion industry.
Twilight was falling on the first Friday in January as a few dozen marijuana moguls and lobbyists gathered for a political fundraiser in Denver. At a Mexican restaurant in the Capitol Hill neighborhood, they sipped margaritas and mingled with state legislators, giving off the giddy vibe of a group sitting on a gold mine. "We're on the ground floor of a movement that's much larger," says Brooke Gehring, a former commercial banker who is now a partner in four Denver-area dispensaries.
But if the cash conundrum isn't fixed, many of the popular reasons for legalizing dope will evaporate. Pot purveyors have eagerly accepted high taxes and burdensome regulation as the price of political legitimacy. The state is projected to take in $67 million in marijuana taxes in 2014, which it will deposit in accounts at national banks. The first $40 million raised from an excise tax on pot sales is earmarked for school construction. "We want to be transparent, legit and recognized as an industry that pays millions of dollars in taxes a year," says Gehring.
Gehring, 33, recently wrote her will at the behest of her mother, who feared for her daughter's safety because of the thick stacks of bills she sometimes carries. Those fears are a reminder that marijuana's big moment could still go up in smoke.