Pot-shop owner opens retail in Empire while Fraser store lags
January 14, 2014
Recreational marijuana stores opened their doors for the first time ever in Colorado and in the U.S. on New Years Day and had patrons lining up to be some of the first to purchase the drug legally.
Dan Volpe, the owner of Serene Wellness Fraser — the only marijuana storefront in Grand County — and Serene Wellness Empire, opened doors to his Empire store on Jan. 1 after completing all of the necessary requirements to transition the once medical marijuana dispensary into a recreational store open to the general public. He reported nonstop business throughout the day.
"We had 20 people in the waiting room for 12 hours straight," Volpe said. "People were waiting an hour-and-a-half and were happy about it.
"We were making history. Really this is the beginning of the end of prohibition in Colorado," he said. "People were walking out of my store cheering and high-fiving strangers."
But Volpe's Fraser store, the top candidate for purchasing marijuana in Grand legally, is not yet selling recreational marijuana.
The first reason is due to a moratorium in place by the Fraser town board that doesn't allow licensing of recreational marijuana businesses in the town until Jan. 23. And the second lies in a restriction put in place by the state that only allows existing medical marijuana businesses to acquire a recreational marijuana license for the first 90 days of the year.
While the county has approved allowing recreational marijuana businesses to operate in certain areas of unincorporated Grand County, there are no pre-existing medical marijuana businesses in the county that can transition to a recreational business in the first 90 days of the year.
But the Serene Wellness Fraser owner says he has not yet decided on a transition of his dispensary business.
Medical vs. recreational
The main difference between recreational and medical marijuana is price.
Volpe and other store owners who made the transition from medical marijuana to recreational marijuana nearly doubled the price of product from what they were charging.
"The price of medical marijuana plummeted over the past couple of years," he said. "People got used to paying low prices."
Volpe plans to continue to keep the price of marijuana to his medical patients lower than what he charges the general public for recreational marijuana. He has been giving existing medical patients in Empire a discount through his recreational store.
He said he feels a responsibility to the medical patients that have been loyal to him and has yet to decide how to serve those loyal customers who have kept him in business since opening his Fraser store in April of last year.
Volpe can do what he is doing in Empire by transitioning his Fraser store to a recreational shop; he can choose to keep the Fraser shop a purely medical marijuana dispensary; or he can physically separate the shop by building a wall, as mandated by the state, making one side of the shop recreational and one side medical.
"I haven't decided yet whether to make it recreational or a mixture," he said.
Though he feels he needs to remain loyal to his medical patients, transitioning to a recreational shop would allow him to get a piece of the recreational sales, which generate more profit and are in high demand throughout the state.
Volpe attributes the raise in prices to his inability to begin to grow marijuana for recreational sales before the first of the year, which created a shortage of supply when he opened his doors to the general public.
"They (the state) did not allow us to prepare for this in any way," he said. "We had a certain number of plants that represented our patients and we could only carry those over."
"This is not bread and milk we are talking about here, this is pot," he said. "It's supply and demand."
Volpe can now begin to grow marijuana for recreational sales, though says it will take at least four months to begin to harvest those plants.
"Everybody is in the same boat," he said. "I have a feeling that if this momentum keeps up there will be a statewide shortage."
Once more and more people are able to harvest plants for recreational sales and the first big push to buy the drug legally dwindles, recreational marijuana prices may drop.
"I think once the market stabilizes there will be a decrease in prices," Volpe said.
Transitioning the Empire shop to a purely recreational shop required Volpe to forfeit his medical marijuana license for the business, acquire a new state and local license to sell the drug for recreational use, and implement a new tracking system for his product.
Recreational marijuana plants are tracked from the time the plant begins to grow to final sale by a high-tech system that includes radio frequency collars attached to the plant.
The collars didn't arrive until New Years Eve, according to Volpe.
"My employee and I worked until 1 a.m. to make sure all of the radio frequency collars were on and then opened the doors at 8 a.m.," he said.
Transitioning the Fraser shop to a recreational store would require Volpe to pay for and acquire a new license from both the town and the state.
The Town of Fraser meanwhile is forming licensing requirements for recreational marijuana shops, including proposed fees for a license and distance between stores.
The town has an eye on Grand County regulations, which do not have restrictions on how far a marijuana store can be located from other marijuana facilities, have lower fees than those proposed in Fraser, and do not have an excise tax like Fraser voters passed in November. Potential shop owners may see better opportunity in the county.
Fraser voters approved a 5 percent local excise tax on the sale of recreational marijuana during the 2013 November election by a margin of 72 percent. The 5 percent excise tax will be placed on top of the 5 percent local sales tax.
State taxes on the drug will include a 15 percent excise tax that was approved by Colorado voters, a 10-15 percent sales tax on retail sales of marijuana, and the normal state sales tax of 2.9 percent.
Fraser's final decisions on pot regulations won't be enacted until Jan. 22. The town's moratorium was meant to allow the town more time to mull licensing requirements.
"This is the same approach we took with medical marijuana," said Fraser Town Manager Jeff Durbin. "We don't want to be the first one in the game. Lets let some other people make mistakes first.
"It's not going to change things dramatically, but it's a good thing for our community in terms of revenue," Durbin said.
Residents of Fraser spoke during a Jan. 8 town board meeting, with some speaking in support of transitioning the existing medical marijuana store to a recreational shop, while others voiced concerns about increased traffic at the stores location.
Trustee Steve Sumrall reminded townspeople at the meeting that it was the residents of the neighborhood where the shop is located that petitioned to rezone the neighborhood as residential and business from purely residential.
"Because this is the only dispensary in the county, I think that we have a unique position to benefit through the tax dollars to the town," said Christie Taylor, who owns her home in the neighborhood where the store is located. "It is predominantly residential, but I think with the way that the town is changing, it will get more commercial in that area. It doesn't necessarily work for me, but I think for the town as a whole it works, and I think that what you should do is make this as easy on this guy as you can."
Reid Tulley can be reached at 970-887-3334