Marijuana saleswoman Marissa Dodd at the Dr. Reefer dispensary in Boulder, Colo.Colorado is no stranger to the debate over legalizing marijuana. Medical marijuana has been legal there for a decade now, and storefront medical marijuana dispensaries have popped up like, well, weeds along the state's Front Range -- the majority in Denver and Colorado Springs.

Demand for the product has soared. More than 100,000 people have reportedly registered in Colorado as medical marijuana users -- a pretty large number in a state of 5 million. And, of course, many budding entrepreneurs and avid weed fans have sniffed out a business opportunity. But as the market has grown so have concerns that some not-so-savory characters are profiting from the boom.

As a result, Colorado has enacted new laws aimed at regulating the state's estimated 1,100 medical marijuana dispensaries. Convicted felons, for example, won't be allowed to operate a dispensary -- a rule that the Drug Enforcement Agency estimates will force some 18% of the state's dispensaries to close, according to the Associated Press. Dispensary owners also must apply for a license by Aug. 1 and fork over thousands of dollars in fees to secure that license.

A medical marijuana dispensary is open for business in ColoradoPush-Back in Aurora

For some municipalities, especially in this time of economic downturn and strained budgets, the idea of new tax revenue from medical marijuana can be very tempting. Marijuana is, of course, still illegal at the federal level, and this current boom has been compared to the days of Prohibition -- when some cities and towns turned a blind eye to the illegal consumption, and often profitable production, of alcohol.

"You have to balance social objectives with economic objectives," says Robert McGowan, a professor of management at the University of Denver's Daniels College of Business. "This is a classic case study in the pull-and-tug between the social issues about whether it should be available -- the medical aspects and the like -- and then the economic ones in terms of the amount of revenue, taxes, etc."

But not every community has embraced Colorado's acceptance of medical marijuana. Voters in Aurora, just outside of Denver, will consider whether to ban dispensaries in their city in a November referendum. Aurora City Attorney Charlie Richardson is skeptical that medical marijuana is the goldmine some people claim it to be. He points to the time a decade ago when gambling was legalized in some Colorado mountain towns.

"Right after you had the authorization. . .in Colorado for casino gambling, you had a lot of casinos open, and over the first couple of years you saw the thinning out of financially unsuccessful casinos, to the point where the situation has stabilized," he says. "I believe it's too early to tell whether the current medical marijuana model will prove to be financially viable on a wide basis."

A medical marijuana dispensary is open for business in ColoradoSome Opening With No Business Acumen

McGowan sees a parallel to the dot-com bubble of the 1990s -- when it seemed like everyone was trying to set up an Internet-based business. In this case, however, you have a legion of pot aficionados trying to cash in on their favorite buzz.

"Frankly, some of these people who have opened these dispensaries have no business acumen," McGowan says. "[They] have simply thrown open the doors -- 'If you build it they will come.' They are getting into it from the product standpoint, but from the actual business aspect, these are pretty much neophytes when it comes to the issue of running a small business."

In fact, some students in McGowan's MBA program are developing a consulting practice to help dispensary owners with the day-to-day aspects of keeping their businesses puffing along. "They said we have business savvy, and these people have to know how to run a business," he notes. "They're fleshing out the business plan, they're looking at the market, they're looking at how to price it, that sort of thing."

McGowan expects that the medical marijuana industry will shake itself out and will probably end up like the sale of fireworks -- where consumers cross state lines to get what remains illegal at home -- while having little to no effect on the trafficking and sale of illegal marijuana. Medical marijuana, he says, is "emotionally charged, it's risen to an issue, it's polarizing; you find very few [people] neutral on the issue. I think the horse is out of the barn, now the issue is how strict are we going to be in allowing this to take place."

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Kleestard

Why do we have to keep feeding this violent drug cartel monster? Legalize and let the chips fall. NO MORE PROHIBITION!

August 04 2010 at 7:18 PM Report abuse rate up rate down Reply
jim

A law should be passed that would prohibit government from banning any substance that they cannot keep out of our federal,state and local prison systems.
Since we all know they have been unable to do even that, maybe they can see how affective these drug laws have been in a FREE SOCIETY

August 03 2010 at 12:06 PM Report abuse +1 rate up rate down Reply
jim

A law should be passed that would prohibit government from banning any substance that they cannot keep out of our federal,state and local prison systems.
Since we all know they have been unable to do even that, maybe they can see how affective these drug laws have been in a

August 03 2010 at 12:05 PM Report abuse rate up rate down Reply
Henning

Medical Cannibis is a Godsend. It lessens my seizures. There are some of us who really need it. To some of us it's no joke.

August 03 2010 at 11:32 AM Report abuse +3 rate up rate down Reply
jr0315

Do any of these "Independent Growers" actually believe that if medical MJ is legalized, that drug companies and all other members of the medical supply industry are just going to sit on their hands and watch it all go down?? No; if it's lucrative, they're going to lobby for "safety measures" and the like, and the private growers with be worse off than they are now. How well do you think you'd do trying to come up with your own brand of aspirin? Even if you could, you'd never afford all the safety & regulations that go with it. And before you chant the alcohol vs. MJ cheer again, how much alcohol can you distill privately and get away with, and how much of that could you sell legally? It all gets regulated, and MJ will be no different, and it will cost a ton of money to do it.

Be careful what you ask for - you may get it...

August 03 2010 at 10:45 AM Report abuse +1 rate up rate down Reply
staysha200

I AM A 49 YR OLD WOMAN. I WAS JUST TOLD THAT I HAVE 6 TUMORS ON MY RIBS AND 3 ON LUNGS. I HAVE SMOKED MARIJUANA FOR 20 YEARS FOR MY ANIXETY DISORDERED AND MY ACHES AND PAINS FROM OTHER MEDICAL PROBLEMS. I THINK IT WAS PUT HERE FOR A LOT OF DIFFERENT REASONS. TO THE LADY WHO SAID TO STICK IT, SOUNDS TO ME LIKE YOUR FAMILY SHOULD HAVE KNOWN THE LAWS ABOUT IT IN COLORDO AND RUN CHECKS ON WHO YOU RENT TO. I HAVE 2 DAUGHTERS AND 8 GRANDCHILDREN THAT I MAY BE LEAVING BEHIND. WHILE I AM HERE, I WANT TO BE ABLE TO HAVE ENERGY FROM BEING ABLE TO EAT, REST AND NOT THROWING UP. I LIVE IN THE BEAUTIFUL STATE OF TN. WHERE THANK GOD ITS NOT LEGAL! BUT GOD DID PUT IT HERE FOR SOMETHING. (POT SMOKER FOR MEDICAL REASONS AND MOTHER AND NANA AGAINST DRUNK DRIVING.) BUT ITS LEGAL, DAHHHHHHHHHHHHHH

August 03 2010 at 8:48 AM Report abuse +1 rate up rate down Reply
staysha200

I AM A 49 YR OLD WOMAN. I WAS JUST TOLD THAT I HAVE 6 TUMORS ON MY RIBS AND 3 ON LUNGS. I HAVE SMOKED MARIJUANA FOR 20 YEARS FOR MY ANIXETY DISORDERED AND MY ACHES AND PAINS FROM OTHER MEDICAL PROBLEMS. I THINK IT WAS PUT HERE FOR A LOT OF DIFFERENT REASONS. TO THE LADY WHO SAID TO STICK IT, SOUNDS TO ME LIKE YOUR FAMILY SHOULD HAVE KNOWN THE LAWS ABOUT IT IN COLORDO AND RUN CHECKS ON WHO YOU RENT TO. I HAVE 2 DAUGHTERS AND 8 GRANDCHILDREN THAT I MAY BE LEAVING BEHIND. WHILE I AM HERE, I WANT TO BE ABLE TO HAVE ENERGY FROM BEING ABLE TO EAT, REST AND NOT THROWING UP. I LIVE IN THE BEAUTIFUL STATE OF TN. WHERE THANK GOD ITS NOT LEGAL! BUT GOD DID PUT IT HERE FOR SOMETHING. (POT SMOKER FOR MEDICAL REASONS AND MOTHER AND NANA AGAINST DRUNK DRIVING.) BUT ITS LEGAL, DAHHHHHHHHHHHHHH

August 03 2010 at 8:48 AM Report abuse rate up rate down Reply
knute9

Our federal government prefers the marijuana industry is completely unregulated (sold to minors), not taxed, and supplied from Mexico. At the same time, for the last 70 years, they poured money into law enforcement, courts, and prison systems (many which are private) that yielded backward results. Less people smoked marijuana in 1937 than today.

August 03 2010 at 8:42 AM Report abuse +2 rate up rate down Reply
slicric13

So if a Federal judge struck down AZ.'s immigration law because it superceded Federal law, what about this? Is not weed still illegal in the eyes of the Feds?

August 03 2010 at 8:35 AM Report abuse -2 rate up rate down Reply
1 reply to slicric13's comment
betty

Why, why, why is alcohol legal and not marijuana. I just do not get it. And think of the tax money the government could get by just legaling the weed. But them again the government, they would definitely screw it up. What am I saying. Just let people smoke pot and the rest of you freaks get on with you life.

August 03 2010 at 8:29 AM Report abuse +2 rate up rate down Reply
1 reply to betty's comment
staysha200

AMEN BETTY! AMEN!

August 03 2010 at 8:51 AM Report abuse +2 rate up rate down Reply