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Potheads Rejoice: Colorado Prepares For A Fresh Crop Of New Pot Stores

Colorado rolled out a new component of its nascent recreational marijuana industry Wednesday: competition.

Prior to Oct. 1, the only stores allowed to sell recreational marijuana to people 21 and older were those already in operation as medical dispensaries prior to the 2012 vote that legalized marijuana. Retail sales began on Jan. 1 and the nine-month head start was intended to prevent a sudden flood of retail outlets and grow operations.

So far, there are about 200 pot stores in Colorado, and the Associated Press reported that Colorado will license another 46 on Wednesday, along with 37 grow facilities and 13 new edible product manufacturers.

The end result will likely be lower prices for consumers, who have paid a premium for pot since January due to the restrictions on new facilities. Customers have paid up to $400 per ounce or more, compared to about $225-$300 per ounce on the black market.

“Allowing for new entrants into the market will better facilitate a free-market determination of price,” Andrew Freedman, director of marijuana coordination for Gov. John Hickenlooper, said in a statement to the AP.

Or, in the words of one dispensary owner: “There’s going to a price war coming. It’s inevitable.”

Wednesday also marked the end of the industry’s vertical integration. Until Wednesday, dispensary owners were required to grow 70 percent of the product they sell, with only 30 percent of their harvest available to be sold at wholesale to other dispensaries.

The rule was intended to ensure that marijuana operations could account for their goods and to prevent diversion to the black market.

With that rule ending on Wednesday, growers are now free to sell their harvests to any dispensary that needs it and it does away with a store’s need to also develop an expensive grow-op to supply its retail needs.

It’s likely that many shops will still grow their own supplies, considering the expense of ramping up grow operations in the first place. The proprietary nature of the crop is also seen as a selling point for individual stores, which can promote the qualities of their own house-grown marijuana.

“There’s still an efficiency that exists when you do it all,” dispensary owner Chris Woods told the AP.

Other changes that went into effect Wednesday include a requirement that marijuana edible products be easily divided into the new standard of 10-mg. doses and that they undergo testing for E. coli and salmonella.

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