Georgia Peaches, High Profits…and CNN
Georgia’s recent contribution to the cannabis legalization effort, aside from the HB1 bill, has been the myriad of specials and documentaries produced by Atlanta-based CNN. Their latest series, High Profits, premiered at this year’s cannabis cup in Denver during the 4/20 weekend. The story centers on the owners of the Breckenridge Cannabis Club, Brian Rogers and Caitlin McGuire, whom CNN calls “business-minded, dream-seeking, relentless visionaries with a plan…to franchise marijuana.”
The show seems to be a hit…as the hour long premiere triggered several outbursts of applause amongst the growling stomachs of a mostly inebriated audience, too baked to interact socially with anyone, so the premier event must have seemed like a safe place for shelter.
After the premier of the reality series, the Q&A after the show provided one rip-tide of a question that seemed to stump the panel, as well as the producer representing CNN.
The question:”did you ever consider the imagery you’re putting forth by this show…do you think it’s good to be rolling around in piles of money when so many medical dispensaries are unable to pay their bills?” It took a moment, tiptoeing into some kind of response into the question…but then again, that’s the point. Stump the bastards.
Brian responded first, “one thing that is trying to be emphasized is we waste a lot of money on prohibition…enforcing laws that are unjust…” But just then the producer jumped in, taking over the response, “we are covering this from an entertainment point of view, we chose to popularize it just to get the word out there. We want to be provocative…We have to do something to get people excited about it and to get people to be curious about it, but we are still a news service. We are not editing out the facts or the truth.”
The truth is that the story told by High Profits only applies to a tiny minority of the people involved with cannabis ventures.
Most cannabis businesses fail, especially those still tied down to “medical-only” regulations. The tax burden remains around 70% because 280E prohibits tax write-offs from federally criminalized enterprises, which includes all cannabis businesses operating within the United States regardless of state law.
Also the price of the commodity is dropping, threatening future earnings for existing dispensaries as more states start to legalize.
At the end of 2013, a few months before the state opened the doors for the recreational marketplace, Colorado saw a decline from 1,131 medical dispensaries in 2010 to 675 by the end of 2013.
The medical industry faces headwinds, not the least of which is still the DEA and President Obama’s confusing drug policy, which was hailed as revolutionary, but secretly allowing the Drug Enforcement Administration to wreak havoc on medical cannabis communities in California, Colorado, and Montana during the President’s first term.
In a June 2013 a report issued by Americans for Safe Access, the DEA carried out 270 medical marijuana raids under the current President – more than had been conducted in the previous twelve years combined. It also calculated that the Obama administration has spent $300 million overriding state cannabis laws in the last four years, which surpassed both terms of the Bush administration by $100 million.
That uncertainty, and the evolving regulations surrounding these initiatives, have put pressure on the available capital for these businesses…If you can’t finance the business at a loss until recreational cannabis becomes legal in your community – don’t quit your day job…Colorado’s medical cannabis industry has shrunk by more than 40 percent since 2010. High profits? Perhaps not – at least not for medical cannabis.
In a Rand Corp. panel discussion, the margin for the industry has fallen by 50% in the past 5 years. Where in 2010 an 1/8 of an ounce of medical cannabis would be around $50, today it is around half of that.
But that’s not the only number that has fallen – overall sentiment for legalization has fallen by 7% since last year.
Mason Tvert, the communications director for the Marijuana Policy Project. “Rarely, if ever, do you see public opinion on a controversial social issue change as much as seven points in the course of one year.”
The movement has fatigued. Russ Belville of the Russ Belville show on 420radio.buzz warns that as more and more headlines come out, like the one’s from Georgia, claiming full victory despite a myriad of questions and regulatory concerns, the American people will become more and more complacent about legalization, believing that it has already been achieved or that it is soon approaching, and will be handled properly through the government’s history of regulatory wisdom.