(Denver Post file)

Lakewood medical marijuana shops see bleak future after retail ban

Owners of medical marijuana dispensaries in Lakewood say the vote to ban recreational sales could be the death knell for their businesses.

And some marijuana opponents flush with excitement over the ballot victory say the fight isn’t over.

“I was elated, just thrilled,” said Dan Cohrs, chief financial officer for Colorado Christian University, one of two groups against retail sales. “We had a targeted push, a grassroots campaign focused on educating the public, and to win by a landslide is exhilarating.”

Lakewood voters in 2012 approved Amendment 64, which legalized marijuana statewide, by a margin of almost 3-2, but voters rejected retail operations 54 to 46 percent.

Shaun Gindi, owner of Compassionate Pain Management at 11950 W. Colfax Ave., viewed the vote as a “heartbreaking” loss that may put Lakewood medical marijuana shops out of business. He said many have struggled to stay open hoping the more profitable retail operations would be allowed. Twelve medical marijuana dispensaries now operate in the city.

“What Lakewood did is vote for an illegal drug trade — they voted for an unregulated black market, against tax revenue and against their city,” Gindi said.

The stores aren’t the cash cows of public perception, Gindi said, and as retail prices continue to drop, the already thin or non-existent profit margins of the smaller industry players are falling into the red.

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The problems are exacerbated by 280E, he added, a 1980s federal tax code that says businesses selling a Schedule I drug cannot deduct certain expenses like advertising, rent and even employee salaries. He estimated the tax chews up almost 90 percent of potential profits.

He said he’s still going to fight to keep his six-employee business open, which in part is kept afloat by a dual retail/medical shop he owns in Louisville.

Earlier this summer, the city council in Colorado’s fifth largest city voted to ban retail marijuana cultivation, testing, manufacturing, hash-oil and smoking clubs. Retail operations were put to a public vote.

People on both sides of the issue expressed dismay at the wording of the ballot question — voting “yes” on 2A actually meant saying “no” to retail stores — and said they heard from people who accidentally voted the wrong way.

Mayor Bob Murphy said the “very prescriptive language” of Amendment 64 means municipalities can only ask the question of banning in the negative.

“You’re only allowed to ask to prohibit,” Murphy said. “We followed the language of the state constitution, and that’s all we could do.”

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Like Gindi, Cristine Romarine owns one medical shop in Lakewood — Infinite Wellness at 1701 Kipling St. — and a dual shop elsewhere. She agreed the passage of 2A is a big hit but remains optimistic her Lakewood store will remain open — for now.

“Not being able to expand hurts us a lot,” Romarine said. “In the long run, I honestly would not be surprised if the state winds up scrapping the medical model altogether. If retail prices keep dropping, it makes you wonder, why bother dealing with it at all?”

In the meantime, Murphy said the city will not be addressing any marijuana issues in the foreseeable future.

Parents for Healthy Colorado member Lisa Young said her group will continue education efforts to keep marijuana away from youth.

“This victory is just a baby step,” Young said. “If anything, it’s a reminder there’s still so much education left to be done.”

Austin Briggs: 303-954-1729, abriggs@denverpost.com or twitter.com/abriggs

This story was first published on DenverPost.com