Pot providers test business models
Medical marijuana dispensaries seek distribution methods in light of city law
January 15, 2010
Medical marijuana cards
County: As of June 30 — As of Sept. 30
Eagle: 69 — 266
Garfield: 81 — 251
Grand: 40 — 83
Jackson: 3 — NA
Moffat: 12 — 18
Rio Blanc: 7 — 13
Routt: 34 — 80
■ There were 17,356 current medical marijuana cards in Colorado as of Sept. 30.
■ Fifty-seven percent of those patients reside in the Denver metro area (Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties).
■ Of the ailments reported, 90 percent of patients report severe pain, 30 percent report muscle spasms and 21 percent report severe nausea (patients can report more than one symptom).
Source: Colorado Department of Public Health and Environment
Steamboat Springs — The number of licensed medical marijuana users in Routt County doubled during the course of three months in 2009, and local dispensaries and caregivers are moving in to fill the demand — including in ways the city deems illegal.
The city of Steamboat Springs on Jan. 5 adopted a resolution to limit the number of dispensaries to two for-profit businesses and one cooperative. Although the city hasn't approved applications for any dispensaries yet, two were operating when the ruling passed, essentially barring any other for-profit dispensaries if the existing businesses are approved.
With those restrictions in place, Steamboat resident Chris Ward thinks he's found a way around the rule.
Ward has started to advertise Aloha Mobile Caregivers by business cards around town and in the Steamboat Today.
He said his business is based in Denver, with 60 patients in Summit, Moffat and Routt counties. He said 20 of the patients are in Routt, including some in Steamboat Springs. Because the business is not based in Steamboat, Ward said, the Steamboat ordinance doesn't apply to him. Ward said he is a caregiver, not a dispensary. People with licenses to use medical marijuana can designate one person as a caregiver who can grow and maintain their allocation of marijuana plants for them and provide them with marijuana.
There is no state definition of what constitutes a dispensary, and the state statute does not address dispensaries. But city attorney Dan Foote said the city ordinance was written as broadly as possible to include business variations like Ward's.
The statute states that "Medical Marijuana Dispensary means any use of any property, structure, or vehicle to dispense marijuana in any form and in any manner to patients or primary care givers, or to grow or otherwise manufacture marijuana for such purpose …"
"If he's delivering marijuana to patients in a vehicle in Steamboat, he needs to get a license, and if he doesn't have a license, what he is doing is illegal," Foote said.
Foote said no licenses have been issued and that he has not seen an application from Ward.
Within Routt County, outside of Steamboat, Ward's method would not run afoul of laws because he has a business license from the state, County Manager Tom Sullivan said.
"If he's delivering it to somebody's home here, then I don't think there's an issue," he said.
Sullivan said a storefront could be operated only in a commercial zone. In the county, only areas of Clark, Phippsburg and Milner are zoned to allow businesses. Permits are required in Hayden, Oak Creek and Steamboat from the town governments.
Ward said he isn't a dispensary because he isn't a retail store and that he is only a caregiver. He said the benefit of a mobile dispensary is that it is more discreet for customers who don't want to go to a storefront dispensary and more convenient for patients who cannot physically travel to the dispensary.
Co-op business model
Another group of locals, under the name "Natural Choice Co-op," is working to open a dispensary in Steamboat. Under the city's law, one cooperative business is allowed in addition to the two for-profit dispensaries.
One of the organizers, Bill French, said he and two other people are working on opening a store on Hilltop Parkway. Three directors will oversee the business, and members of the cooperative will have a chance each year to vote to retain the directors or install new directors.
"We came up with the idea just as a way to get more than the one grower in there, basically giving them a showcase to showcase all their stuff, for one thing," French said. "We thought it would help ease some of the worries people have about shady business practices and overcharging people."
Foote said organizers have filed an application and that it's the only one that has been filed for a cooperative dispensary. The city must approve the permit, and the review for that application has not been scheduled, Foote said.
French said the cooperative model also will be helpful because it will sell some marijuana on consignment for caregivers or patients, reducing up front costs for the business.