As the Denver City Council grapples with whether to further extend an expanded 120-day moratorium barring new players from Denver’s legal marijuana markets, a new special committee on Wednesday heard presentations on a central contention from Mayor Michael Hancock’s administration.
City officials’ appraisal is that the markets — both medical and recreational — are saturated, with supply nearly meeting or threatening to exceed demand. The fear is that oversupply would result in legally produced marijuana being sold in the black market. The administration will be pressing the council in coming months to extend the moratorium another two years or more.
Amid discussion of pending license applications, the economic impact of the clustering of marijuana growing and production in certain neighborhoods, and whether more pot businesses might pose a threat to some areas of the city, one exchange illustrated an ongoing tension point between some legalization supporters and regulators.
“We were asked by the voters to legalize it like we do alcohol,” Councilwoman Mary Beth Susman said. Then she expanded into several questions:
I’m wondering why we are singling out the demand-supply question for marijuana, and what do we do about alcohol? Because there’s a black market for alcohol, there’s a black market for cigarettes. Do we have any regulatory (policies) that if they produce more alcohol then we start clamping down on liquor stores? And why would we just single out one of the “sin” industries, when it’s a legal product?
Ashley Kilroy, Hancock’s marijuana policy adviser, replied:
Because marijuana’s still illegal at the federal level, and we are still operating today under the Cole memorandum. Under the Cole memorandum, the Department of Justice has told us that we have to have robust regulations and strict enforcement around these businesses. And so Mr. Romine told us that he believes we have plenty enough licenses that access to marijuana is not an issue (for those seeking it).
She was referring to Jeff Romine, the city’s chief economist, who had just presented various data. One slide showed that Denver, while having 29 percent of the population among four metro counties (along with Adams, Arapahoe and Jefferson), has 83 percent of the pot stores and 96 percent of marijuana grow houses.
Addressing Susman’s question about regulation of the alcohol industry, Romine said: “They are similar, but they are different because of the national level.”
The special committee, which was attended by 12 of 13 Denver council members Wednesday, punted until the next meeting (set for 3 p.m. Monday) a presentation by Denver police on how an over-saturated legal marijuana marketplace could pose various risks. City officials said that presentation also will help answer Susman’s question about why legal marijuana, for the time being, cannot be treated strictly the same as alcohol.
Kilroy also is preparing city research on the many remaining locations that new marijuana stores could open in the city, within the tight restrictions on where they can go. But industry activists say they also have researched that question.
Attorney and activist Christian Sederberg says some within the industry believe that in any realistic scenario, only a handful of locations remain for new pot shops within Denver city limits.