Month: June 2021

A new study found that legal cannabis sales have generated billions of dollars in revenues for state and local governments. This won’t come as a surprise to proponents of cannabis legalization, many of whom have long argued that legalizing marijuana for recreational use would benefit state economies. As more people come to recognize the economic advantages of legalization, more states may look to legalize marijuana as a way to increase tax revenues. What effect could this have on the U.S. cannabis industry? Keep reading to find out.

Recreational Marijuana Sales Boost State Economies

The Marijuana Policy Project (MPP), the nation’s top organization dedicated to legalizing cannabis in the United States, recently published the research results of a study of the economic impact of legal marijuana sales. That study found that state governments in Colorado, Washington, and other states where recreational marijuana use is allowed have officially reported around $8 billion in tax revenues coming directly from legal cannabis sales.

In addition to the $7.9 billion in state tax revenues coming from legal marijuana sales, the MPP study also found that local city and town governments have generated several hundred million dollars in tax revenues from recreational cannabis sales at dispensaries.

These figures are remarkable, especially considering that adult-use cannabis is not yet legal in most states. Moreover, many of the states where adult-use cannabis is legal only recently created their cannabis markets.

The Colorado Cannabis Economy

The creation of a viable cannabis economy, including the infrastructure necessary to sustain that economy, can take time. For example, in Colorado, adult-use cannabis was legalized in 2012, but sales at dispensaries did not start to occur until 2014. Since then, Colorado has generated more than $1.5 billion in tax revenues from legal cannabis sales. The sales tax rate on adult-use cannabis is 15 percent, which applies to both wholesale and retail. Since this does not include any local taxes on cannabis sales, some municipalities have generated additional revenues from retail cannabis sales: the MPP study found that Denver has collected more than $210 million.

The high tax rate for recreational marijuana sales, coupled with booming business for Colorado dispensaries, has had a profound effect on several important areas of state and local government. For instance, the MPP study shows that $404.5 million of the Colorado cannabis tax revenues have gone toward funding improvements of the state’s public school system.

Washington, Oregon, and Alaska Among States Generating Cannabis Sales Tax Revenues

Colorado is not the only state that has been financing major public policy programs and other parts of state and local government with revenues from the legal sale of adult-use cannabis. States like Washington, Oregon, and Alaska have also been setting records for recreational marijuana sales, which has led to record tax revenues. In Washington, where the retail sales tax rate on cannabis is incredibly high, more than $2.5 billion in tax revenues have come from dispensary sales since 2014. In Oregon, where legal recreational marijuana sales did not start to happen until 2016, more than $540 million in tax revenues have been generated. And in Alaska, annual cannabis sales tax revenues set a record of $27 million in 2020.

Since the November 2020 election, several states have passed new laws legalizing the recreational use of marijuana. More states could soon join them, as state legislatures across the country debate marijuana legalization measures. This would likely have a significant effect on the economies in those states by creating a lot of jobs, in addition to providing the states with a boost to tax revenues.

Contact Scythian Cannabis Real Estate Today

Scythian Real Estate is a privately held cannabis real estate fund that has established relationships with the top cannabis operators in the country, including The Green Solution (Columbia Care), Grassroots Cannabis (Curaleaf), and LivWell Enlightened Health. If you are a cannabis operator looking to add capital, Scythian may be able to assist you. For more information, send us an email.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

The push to legalize cannabis for adult use in Minnesota gained a great deal of momentum when the Minnesota House of Representatives voted in favor of legalization. Now the marijuana legalization effort will head to the Minnesota State Senate, where it will probably face an uphill battle. Could recreational marijuana soon be legal in Minnesota? And what would this mean for large cannabis operators who are looking to expand their operations into new states? Keep reading this blog to find out.

New Law Would Make It Legal to Possess Cannabis in Minnesota

In May, a cannabis legalization measure came up for vote in the Minnesota House. Since that part of the state legislature is divided almost evenly along party lines – with a slight majority of Democrats over Republicans – the vote was expectedly close. Ultimately, the House voted 72-61 to pass the measure, representing a major step forward for legalization efforts in the state.

The proposed law would allow Minnesota residents over the age of 21 to possess as much as two (2) ounces of cannabis outside their homes. This would effectively eliminate the prosecution of most misdemeanor marijuana possession cases since the vast majority of these cases tend to involve the possession of a small amount of cannabis. Additionally, the proposed legislation would allow Minnesotans to have as much as 10 pounds of marijuana inside their homes. Importantly, however, the law would still not make it legal to grow, cultivate, or manufacture large amounts of cannabis without a state-issued license to do so.

What Is the Future of Marijuana Legalization in Minnesota?

States like Virginia and New York have legalized adult-use cannabis since the 2020 election. Could Minnesota be next? Now that the Minnesota House has expressed its support for adult-use cannabis legalization, the bill moves to the state Senate. However, that is likely where the measure will die. That’s because there is a clear GOP majority in the Senate, and Republican lawmakers have historically opposed efforts to legalize marijuana for recreational use.

Prior to voting on the legislation, the House held a dozen hearings to discuss and shape the proposed law. By contrast, the Senate called for exactly zero hearings on cannabis legalization before ending its session on May 10. The lack of a debate on the Minnesota Senate floor certainly does not bode well for the cannabis legalization bill in later sessions since Republicans would need to call for a vote for the measure to even have a chance of becoming law.

What Are the Economic Benefits of Cannabis Legalization?

The hope among supporters of cannabis legalization efforts in Minnesota is that those currently objecting to the proposed law will eventually see the benefits of allowing adult-use cannabis sales. One of these benefits is economic: states where cannabis has been legalized for both recreational and medical use have generated billions of dollars in annual tax revenues. With that in mind, lawmakers who drafted the latest version of Minnesota’s cannabis legalization measure included provisions that would establish a Cannabis Management Board to implement, oversee, and enforce the new regulations. This would include oversight of tax revenues from the legal sale of marijuana in licensed dispensaries.

The author of the bill, House Majority Leader Ryan Winkler, said that now is the time to change outdated laws criminalizing possession and use of marijuana. Winkler added that the legislation approved in the House would “right the wrongs of the criminal prohibition of cannabis that has failed Minnesota.”

Contact Scythian Real Estate for Information on Cannabis Sale-Leaseback Transactions

Scythian Real Estate is a privately held cannabis real estate fund that works with some of the most sophisticated cannabis operators in the United States. Scythian provides capital to cannabis companies through sale-leaseback deals involving properties used for retail dispensaries. If you are a cannabis operator looking to expand into new markets, or if you are interested in securing financing for existing operations, email Scythian today.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.

Cannabis delivery is now legal in Denver, Colorado. The move by the Denver City Council is expected to open up the cannabis market to new customers who can now place orders online and over the phone, in addition to having marijuana delivered right to their front doors. What kind of impact could these recent changes to local regulations have on the Denver cannabis economy? And how significant will the benefit be to Denver cannabis operators? Keep reading this blog to find out.

Denver Overhauls Marijuana Laws to Allow Weed Delivery

Denver has one of the oldest and most well-established recreational cannabis markets in the United States, with Colorado becoming one of the first states to legalize adult-use cannabis in 2012, and Denver now boasting more than 200 marijuana stores. Now the city is making major changes to its regulation of recreational marijuana. The Denver City Council, which has 13 council members, unanimously approved the measure to allow for marijuana delivery. Denver Mayor Michael Hancock later signed the marijuana legislation, which is considered by many to be the biggest change to the city’s marijuana laws since adult-use cannabis first became legal in Colorado.

After Mayor Hancock approved the new law (on April 20, or “420 Day”), proponents of expanding the Denver cannabis market voiced their approval. Ashley Kilroy, the executive director of the Denver Department of Excise and Licenses, called the new law “historic” and noted that it would help to modernize Denver’s cannabis rules and regulations. Until now, weed delivery had been banned in Denver.

In addition to allowing recreational marijuana deliveries, the new legislation will also make drive-thru services at dispensaries a permanent feature. The drive-thru option was temporarily allowed during the COVID-19 pandemic in order to protect customers against the spread of the virus indoors.

Denver Cannabis Operators Must Apply for Marijuana Delivery Licenses

Denver cannabis operators who want to offer delivery services will need to apply for a transporter license. In fact, during the first three (3) years of the new marijuana delivery program, retail cannabis stores will be required to use licensed transporters for delivery services. According to Eric Escudero, the spokesperson for the Denver Department of Excise and Licenses, businesses will be able to start applying for marijuana delivery licenses in the summer of this year.

For the first six (6) years, new transporter licenses will be limited to social equity applicants, which allows minority-owned cannabis businesses and people in low-income communities to gain access to a market in which they have been disproportionately represented in the past. This is in line with Denver’s current rules that limit applications for new store, cultivation, and manufacturing licenses to social equity applicants.

Restrictions on Denver Marijuana Delivery Services

The new law does place restrictions on not just who can offer marijuana delivery services, but also on the way in which those services are provided. In fact, recreational marijuana transporters will be subject to a number of strict rules:

• Transporters must have dash cameras on their motor vehicles.
• Transporters must use ID scanners to check the IDs of customers and ensure that the correct person is receiving the marijuana.
• Transporters will be limited in the amount of cannabis product that they can carry in their vehicles.
• Marijuana deliveries can only be made to residential addresses, not businesses.

Denver to Allow Public Consumption of Marijuana in Hospitality Establishments

The decision to allow dispensaries to deliver recreational marijuana was not the only important move made by the Denver City Council: the council also approved public consumption lounges in the city. The lounges are being officially referred to as “hospitality establishments,” rather than marijuana lounges.

Cannabis businesses that wish to operate a hospitality establishment will need to apply for, and receive, a marijuana hospitality license. Applications for the licenses are expected to be made available later this year. Any operator granted one of these licenses can legally permit people to smoke marijuana inside a designated space. Additionally, some hospitality licenses will allow cannabis operators to sell recreational marijuana as well.

Contact Denver-Based Scythian Cannabis Real Estate Today

Scythian Real Estate is a Denver-based cannabis real estate fund that works with the most sophisticated cannabis operators in Colorado, which has the nation’s most developed legal cannabis market. Some of Scythian’s partners in Colorado include The Green Solution (TGS) and LivWell Enlightened Health. Scythian provides TGS and LivWell with capital through sale-leaseback deals, as well as assisting the cannabis operators with tenant improvements, zoning requirements, and new license acquisitions. If you are a cannabis operator in Colorado, or in another emerging cannabis market, email us today to learn more.

PLEASE NOTE THAT THIS BLOG IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY SECURITIES IN SCYTHIAN REAL ESTATE FUND.