Watchdog’s Marjorie Haun says that Colorado’s “business climate is a mess,” except for one new growth industry:
Magpul, a large ammunition magazine manufacturer, was driven out of the state in 2013 because of strict new gun-control laws, taking hundreds of jobs with it. Oil, gas and coal jobs have fled the state due to federal and state over-regulation and roller coaster markets. Despite significant job losses in many economic sectors, however, Colorado ranks high as an entrepreneur-friendly state.
What, then, could account for Colorado’s high ranking on Thumbtack’s 2015 Small Business Friendliness Survey? The answer is simple: pot.
Some of the factors that make commercial marijuana shops a tempting opportunity for Colorado entrepreneurs include: the perception that opening a new business is easy, the relatively-loose (evolving) regulations on the industry–including licensing requirements–and a large and eager pool of potential employees.
The data show that legalized recreational marijuana has contributed significantly to the numbers of new jobs and business in Colorado’s resort towns, and along its mostly metropolitan Front Range. Although a variety of new businesses have opened doors in Colorado, a significant number of them are marijuana related.
Colorado remains an interesting test case for drug legalization — Washington, too. Both states are enjoying, if that’s the word, influxes of pot tourists, but also of people picking up stakes and actually moving to where pot is legal.
Friends of mine recently bought a new home in Denver, and had to pay through the nose to get it. The reason is simple: Lack of supply. If I remember correctly, there are usually around 22,000 homes for sale in the Denver area on any given day, but last spring that number was down to about 3,000. This is a seller’s market — and legal access to pot is one of the main reasons why.
High times seem to be good times for Denver real estate, and for small business throughout Colorado.
But what about the Las Vegas Effect?
I don’t gamble, but Vegas is one of my favorite cities in the world. It’s too outrageous not to be loved — a city of impossible sights and lights and fountains, out in the middle of an uninhabitable desert.
What makes Vegas work of course is legal gambling. Those lost wages get converted into outrageous sights to keep the gamblers coming back for more.
But you can really only have one Las Vegas per country, maybe just one per continent because there are only so many gambling dollars to go around. If every city tried to recreated the Las Vegas Strip, then no cities would have the Las Vegas Strip — not even Vegas. To work, a place like Vegas requires a concentration of gambling dollars, by keeping gambling restricted most everywhere else.
Colorado and Washington were the first states to legalize pot, but they aren’t the last, and probably an outright majority will eventually follow suit. And I suspect, based purely on anecdata, that there are only so many pot dollars to go around. People who always smoked before are now smoking more openly and certainly with less hassle, but my observation is that people who were never interested still aren’t very interested.
So for now we’re enjoying all those tourist dollars, all those new small businesses hiring and paying taxes, and that influx of new residents.
But how long before enough states follow our lead before the high times go up in smoke?