DENVER – Meeting the taxman can be an adrenaline-pumping escapade for a marijuana-store owner.
Brian Ruden’s monthly adventure starts at a secret location. He likes to keep it unpredictable, always switching the appointment time from one meeting to the next and never doing it on the same day twice in a row.
Then he’ll hand about $150,000 in cash to gun-toting guards, who whisk it into an armoured vehicle for delivery to another mystery location — an unmarked building belonging to the Colorado state revenue agency. Once inside, the contents are handed to state bureaucrats who spend about an hour each month counting his tax contribution.
Ruden is one of the first recreational-pot-store owners in the United States. He opened right after Colorado became the first U.S. state to allow non-medical pot sales on Jan. 1.
That means he’s experiencing the growing pains of an industry just emerging from a century of illegality.
He’s forced to deal in cash. Banks won’t let businesses like his open an account, because marijuana remains illegal at the federal level and they fear the potential legal consequences.
This abundance of cash can make a routine trip to the revenue department resemble a wild-west romp. Also, he can’t get insurance coverage should armed bandits ever crash his monthly date with the taxman.
“It is stressful,” Ruden said in a recent interview inside his Denver store, Starbuds.
“Thank God there’s never been a single hijacking (of any Colorado pot business), or even an attempt.”
There are lots of other hurdles to clear, as Ruden’s fast-growing business expands from its current four stores.
He has to get fingerprinted and undergo a background check whenever he applies for a new licence; the permits are pricey; and he’s forced to install dozens of cameras on his property and slap ID numbers on every ounce of pot, so that inspectors can watch for black-market sales.
But he’s loving it.
Ruden, a tax-resolution lawyer in his previous life, is happier now. He’s his own boss, making lots of money and expanding to new branches, and he’s a staunch believer in a cause he likens to a civil-rights struggle.
Racism fuelled pot prohibition from the start: drug laws have always been applied more stringently to blacks, he said.
The reefer madness in American media a century ago occasionally had racial overtones too, according to the book, “A New Leaf: The End of Cannabis Prohibition.” It quotes a Colorado newspaper editor writing to the old Federal Bureau of Narcotics, saying extremely racist things about “Spanish-speaking persons” and warning of the mental effect on them when they smoke marijuana.
Now Colorado is leading the way with recreational stores, followed closely by Washington state, while across the country 23 states have allowed medical pot and 16 have decriminalized it.
“My belief is that widespread legalization is inevitable,” Ruden said. “We could be the model for other states and other countries.”
It’s unclear what the final model will actually look like. Colorado’s experiment is ongoing, and it’s happening on different fronts as municipalities adjust their own rules about what types of stores to allow and what taxes to charge.
The stores vary from place to place.
In Denver, Ruden’s shop sells vaporizer e-joints and edible pot-snacks beneath a wall of T-shirts for sale. One shirt reads, “Starbuds: Low prices for high people.”
In more conservative Colorado Springs, recreational stores have been forbidden. But medical dispensaries there are still open to customers with a state-issued card. One smells like pot on the inside, another smells like urine on the front steps, and then there’s a charming little house with flowers outside, called Strawberry Fields.
Down the road, in Manitou Springs, recreational sales are allowed and the lone store there is decidedly high-tech. Customers ranging in age from their 20s to their 70s tap orders into iPads, after consulting with a bud-tender about what properties they want in their buzz.
The implementation hasn’t been flawless.
The state was forced to update packaging-and-labelling rules for the edible products, because people were eating too much and getting sick. One college student who ate a product died after falling off a building. On the other hand, one new study suggests deaths from painkillers have dropped 25 per cent in states where medical pot is available.
Tax revenues have been lower than expected. It’s believed that because the recreational product is taxed at more than 31 per cent, and costs more than $20 a gram, many customers are being driven back to cheaper options — the black market and medical-marijuana stores.
“I think the state should look at the whole tax structure again,” Ruden said. “That being said, (marijuana legalization) has been hugely successful.”