It's no longer an unfamiliar scene: A patient carrying a Colorado medical marijuana card goes to a local center to buy medicine. Maybe the patient purchases some edibles or creams; perhaps she purchases a particular strain for her ailment. Either way, money changes hands, and a profit has been made for the center.
Like many medicines, marijuana products are expensive, and the impact of the profits gained extends far beyond the centers' own pockets.
Harvard economist Jeffrey Miron estimates that, nationally, the medical marijuana market is bringing in roughly $14 billion a year. Those who benefit range from center owners to real-estate agents, from attorneys to insurance salesmen.
To help gauge the impact, let's look at what a caregiver needs to start a center.
First, a location.
"It's good to have any kind of absorption in the market right now," says Kent Mau, broker for Sierra Commercial Real Estate. "It's good news for landlords who couldn't otherwise lease the space."
"The kind of space that they're taking tends to be small office buildings," adds Mau. He estimates that dispensaries take up 180,000 square feet of the 27 million square feet that Sierra oversees.
"If [centers] close down, they are going to create economic injury to both landlords and dispensary people who have put money in," says the broker. "Will the impact be significant? On a global scale, no. But on a local investor level, they're going to hurt the investors."
The second thing businesses need is insurance.
"When we started writing insurance policies, we were expecting to see maybe $5,000 to $10,000 premiums, because of the high risk associated with them," says Israel Valdovinos, insurance specialist at Acruxis Agency. Instead, actual premiums average between $1,400 and $1,800 annually, thanks to the security systems installed by most centers.
Insurance for a grow operation, which supplies plants to many centers, runs closer to $10,000 annually, though original estimates were around $15,000.
"We want to help professionalize this business, so we're coming out with these premiums that are going to help protect the plants and protect the business property, and we're going to do it at a fair rate," says Valdovinos.
Insurance agents make commission off the policies they sell, but if a center cancels its policy, the commission has to be paid back. This loss isn't devastating to the company. In fact, Valdovinos sees it as just the opposite.
"With all the regulations that are coming out, we're able to weed out the bad business that's out there. Let's say there's 50 dispensaries that we represent, but half of them go away. We're going to be better in the long run because we're going to have them as clients for the next 20 or 30 years," says Valdovinos.
Another step on the road to becoming an MMJ center is checking to make sure your business is operating within the law.
"You definitely are seeing more [clients] with the new laws that are coming out. Everybody wants to make sure what they're doing is on the up and up," says Richard Bednarski, attorney at Tegtmeier Bednarski.
Bednarski assists people who have legal questions about the cultivation of medical marijuana, dispensary ownership, individuals on probation who also have medicinal marijuana licenses, and more.
And the money doesn't stop flowing there — centers also have to pay taxes. According to the city's website, 26 new sales tax licenses have been issued to medical marijuana centers since Jan. 1.
Dispensaries are also providing many with jobs, including chefs who make edibles, massage therapists, aestheticians, chiropractors and acupuncture specialists.
The Wellness Source, which has been open for just a few weeks, employs five people whose primary concern is patient care. Generally extrapolated over roughly 110 centers, Colorado Springs is looking at 550 or more additional jobs inside centers alone.
"It's important to dwell on the individual and their particular malady, so oftentimes we will do specific research in order to determine what is best-suited for their problem," says Wellness Source co-manager Patrick Scott.
Economics aside, each center exists for its patients. Scott — and Scott Estep, the other Wellness Source co-manager — don't support recreational users seeking medical marijuana cards, which they believe makes it harder for those truly in need to get medicine.
"We certainly want to see this function truly as a source of wellness for folks, for all different aspects of health," Estep says. "All the different aspects of medical marijuana are proven, and growing, and that's the side of it that we're focused on as a company."
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