Special Report: High Times at America’s New Cannabis Capital

With 4/20 upon us, Rogue investigates the fastest growing industry in America: marijuana.

by Jonathan Franklin

Move over, Amsterdam. Since 2014, the state of Colorado not only started to grow marijuana legally, they’re also anticipating a multi-billion-dollar harvest from the “green rush.” Rogue correspondent Jonathan Franklin visits Denver, the country’s new cannabis capital, to investigate the fastest growing industry in America

 

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Even before I passed through the two heavy security doors, the potent, sweet aroma of marijuana wafted through the crisp Colorado air. I was buzzed in to a stunning sight: Rows of budding green plants stacked and packed into a massive Denver warehouse. “Those are the mothers up there,” says Jimmy Ceasano, the warehouse manager, pointing to a second story space. “We take clones from her and bring them down here,” he said with maternal possessiveness.

Every week Ceasano coordinates the harvest from a different room, about four pounds a week. At a market price of $3,000 a pound, it’s a lucrative business for those who have the two million dollars needed to be a player in the booming marijuana business.

Entire rooms are filled with soil and fertilizer, a time clock for the employees, marijuana grow permits from the state of Colorado, and shelves of glass jars each filled with thousands of dollars of recently harvested green bud. Walking through this industrial-sized grow operation, the scale of America’s legal marijuana production becomes apparent. “Our electrical bill is about $15,000 a month and by year’s end it will be five times that [$75,000 a month],” explains Jeremy Heidl as he provides me with a tour of his company’s grow center.

Though marijuana has been legal for medicinal reasons in California since 1995, the first experiment with recreational sales to adults began January 1, 2014 in Colorado. Instantly the industry surged. Tourists flooded in from around the world. Pot shortages were reported. Prices spiked and for industry workers like the warehouse manager for the 9,452 plants, stress levels soared. “People think that just because I work in marijuana that it’s relaxed. Not at all!”

 

DENVER, CO - APRIL 20: Thousands gather to celebrate the state's medicinal marijuana laws and collectively light up at 4:20 p.m. in Civic Center Park April 20, 2012 in Denver, Colorado. Colorado goes to the polls November 6 to vote on a controversial ballot initiative that would permit possession of up to an ounce of marijuana for those 21 and older. (Photo by Marc Piscotty/Getty Images)

On 4/20 (or April 20, 2012, at 4:20 P.M.), thousands celebrated the state’s medicinal marijuana laws and collectively lit up. Since January 1, 2014, Denver’s licensed weed warehouses and retailers have had to adjust to the spike in marijuana demand after selling recreational marijuana became legal. (Photo by Marc Piscotty/Getty Images)

 

Ceasano complained that because of the boom in marijuana sales, experienced bud trimmers are in short supply. Trimming buds—of which the operations usually needs at least one pound a day—is monotonous work involving scissors and an ability to prune the tightly packed marijuana buds into nuggets. A bad trimmer can ruin hundreds of dollars of marijuana by hacking the bud to pieces, said Ceasano.

But trimmers are not needed in a nearby laboratory where a blender is used to grind the buds into a fine dust, which is then packed into a stainless steel tube contraption used to extract the marijuana oil. As I enter the laboratory a more select group of marijuana workers is installing a new piece of German-made lab equipment. “This is super critical CO2 extraction process—we are able to organically pull the oil out of the marijuana. It was in the machine extracting for 15 hours.  Lots of horsepower behind this,” says Ralph Morgan, who has spent years perfecting the art of marijuana extraction and is cofounder of OrganaLabs.

Like most of Denver’s marijuana entrepreneurs, Morgan began his career selling top quality marijuana to AIDS patients, chronic pain sufferers, and those who genuinely needed marijuana for a quality of life improvement. “These were patients who said, ‘Hey, I just can’t sleep at night.  I’ve got pain related to this ailment, do you have anything that can help with that?’  And the answer is, ‘Yeah, we do, with euphoria potentially being a side effect.’” He stops to smile, “Not bad.”

 

DENVER - APRIL 20: Men pass a marijuana cigarette to each other during a pro-marijuana rally at Civic Center Park with the Colorado State Capitol Building in the background April 20, 2010 in Denver, Colorado. April 20th has become a de facto holiday for marijuana advocates, with large gatherings and "smoke outs" in many parts of the United States. Colorado, one of 14 states to allow use of medical marijuana, has experienced an explosion in marijuana dispensaries, trade shows and related businesses in the last year as marijuana use becomes more mainstream here. (Photo by Chris Hondros/Getty Images)

Men pass a marijuana cigarette to each other during a pro-marijuana rally at Civic Center Park. (Photo by Chris Hondros/Getty Images)

 

Now Morgan has turned his personal invention—an electronic cigarette converted to a pipe that vaporizes marijuana oil—into O.penVAPE, a branded success story that is likely to earn him millions. But judging from his mad scientist enthusiasm, Morgan doesn’t seem to be in it for the money. In fact, he comes from a healthcare background and has long experimented with turning marijuana oils into a potpourri of medicinal remedies. “I am dangerously familiar with the chemistry,” says Morgan. “It’s the most satisfying entrepreneurial event I could imagine. You get an opportunity to be part of history, to really, profoundly help people and be successful all at the same time.”

For Morgan one of the surprises of the past year has been the absolute explosion of marijuana oil sales. Instead of smoking—and damaging the lungs—increasingly, marijuana users both medicinal and recreational are vaporizing their THC [tetrahydrocannabinol] or ingesting their marijuana through a range of THC-infused foods called “edibles.” Ranging from soft drinks to chocolate bars, the amount of marijuana going into oils has gone from less than 5% a year ago to nearly 30% of the entire marijuana market.

Above, in the hills of Boulder, Colorado, thousands of students at University of Colorado serve as another kind of laboratory: for the world’s strongest pot. In backroom labs and at times blowing their home apart in butane-fueled accidents, crews of chemists are brewing a whole new class of marijuana “waxes” that can be “dabbed” onto pipes and cooked. Among the strongest is an amber-colored sheet of near-pure THC known as “shatter.”  Morgan’s next venture is less about the ultimate high and more about ultimate sensations; he is developing the chemistry to launch a line of topical marijuana products intended to provide local relief from arthritis and inflammation as well as a full-on body high.

 

"This is a big week, " says Steve Horowitz, owner of Ganja Gourmet in Denver, Colorado, April 17, 2013. "The phone's ringing a lot, with people who want to come to Colorado and pretend they're in Amsterdam." (Dustin Bradford/MCT)

“The phone’s ringing a lot, with people who want to come to Colorado and pretend they’re in Amsterdam,” says Steve Horowitz, owner of Denver’s Ganja Gourmet. (Dustin Bradford/MCT via Getty Images)

 

Morgan is optimistic that what he calls “this experiment with legalization” will continue. Local law enforcement, he says, have been “incredibly cooperative.” In early January one of his employees was involved in a traffic accident. The police arrived on the scene and found 10 pounds [4.5 kilos] of marijuana in the trunk. The police called Morgan and he relishes reliving the conversation. “It’s not that often you get the police department calling you, saying, ‘Mr. Morgan, you need to come down and pick up your 10 pounds of marijuana that your salesperson had in their car.’”

At the end of my tour Morgan smiles and holds up a flask of what looks like motor oil. “That’s $40,000 worth of oil,” he says. “We took five pounds of marijuana and made 283 grams of this!” At these prices a 55-gallon barrel of marijuana oil would be worth approximately $4 million, which helps explain the flood of money coming into what many are calling the Colorado “Green Rush.”

“Last year Americans bought $1.4 billion worth of legal marijuana, this year it is expected to be well over $2 billion,” explains Steve Berg, an investment banker who specializes in the marijuana industry. “It’s the fastest growing segment of the U.S. economy.” Berg, an investment banker from California, is now helping coordinate “seed money” investments into the marijuana industry. Already, his group, the Arcview Group, has raised over $1 million for pot entrepreneurs, though much of the money will not be used to grow pot but to finance ancillary businesses including MassRoots, an app-based social network dedicated entirely to high-quality cannabis content.

 

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La Conte’s Clone Bar and Dispensary in Denver. Colorado residents can purchase up to an ounce of weed at a time, while tourists can purchase up to a quarter ounce.

 

Though the investor community is hot on marijuana businesses, a strong social stigma still exists. Just ask Todd Mitchem, a gung ho marijuana advocate. When he announced to his colleagues and business contacts that he had quit corporate consulting for Fortune 500 companies to work in the marijuana industry, he was shocked by the first call. “My phone rang, and it was someone from Anheuser-Busch, who had been a client of mine for two years, and I was excited. I thought, oh, you know, he wants to say congratulations. So I answer it and the first words out of his mouth are, ‘You’ve ruined your life.’ And I go, ‘That’s really funny, man. How you doing? I haven’t talked to you in a while.’ He said, ‘No, I’m serious. I can’t believe you’ve done this. You’re a drug dealer. You’ve put yourself in with lowlifes. You’re disgusting to me.’ I went into shock for about 10 seconds, and the only thing I could say was, ‘At least we don’t kill 38,000 to 40,000 people a year,’ and I just hung up the phone.”

Instead of taking the insult as a warning, Mitchem saw the incident as proof that he was on the right track. While he was publicly taking nasty text messages and phone calls, in private, messages were coming in on LinkedIn and Facebook saying “Congratulations” and “Thank you for doing this. I don’t want to tell anyone, but I actually totally support you.”

For Mitchem, “in that moment, something clicked for me. I had been a marijuana user for a long time, and it suddenly hit me that it was time to come out of the darkness. That this was my opportunity because I had the legitimacy of the corporate world and the understanding how to build a great company and it was time to come into the light.”

Despite being legal under Colorado state law, marijuana remains illegal under US federal law, which leads to massive confusion. Can airplane passengers travel with marijuana within the state of Colorado? Can people in Colorado smoke pot in public? For now the answers have been clear “No” as Colorado officials do their best not to provoke the DEA or other federal agencies into raiding and shutting down the budding marijuana business. For those in the industry, the contradictions are ridiculous. While the state of Colorado can collect sales tax on marijuana purchases, the shop owners are not allowed to open a bank account because under federal law, the drug money might be seized.

“I have people out on the street, they’re couriers, and they are collecting cash because all the dispensaries have to operate on cash basis. They can’t bank. So at any time there can be couriers with up to $40,000 or $50,000 in cash,” explained Mitchem. “It’s going to take an event for banking to wake up. In other words, one of our couriers or another courier is going to get murdered and robbed because they have $100,000 in cash in their car and then banking will say we should now do something. But I just hate to think that it would take the loss of a life or two to wake banking up when it’s really a simple situation. It’s an outdated law based on money laundering for drug cartels and mafia. That’s not who we are. We’re legitimate business people.”

Opposition to the marijuana legalization has been surprisingly muted in Colorado. A few parents groups and evangelical groups have opposed, but even the evangelicals seemed to soften with an announcement that they would support medical marijuana sales as a legitimate health care treatment. “This is about a greater tolerance, a greater freedom,” explained William Breathes, marijuana columnist for local newspaper Westword. “Colorado has always maintained a strong sense of personal freedom.”

 

DENVER - APRIL 20: A man smokes a joint at a pro-marijuana "4/20" celebration in front of the state capitol building April 20, 2010 in Denver, Colorado. April 20th has become a de facto holiday for marijuana advocates, with large gatherings and 'smoke outs' in many parts of the United States. Colorado, one of 14 states to allow use of medical marijuana, has experienced an explosion in marijuana dispensaries, trade shows and related businesses in the last year as marijuana use has become more mainstream. (Photo by John Moore/Getty Images)

A man smokes a joint at a pro-marijuana “4/20” celebration in Denver. April 20 has become a de facto holiday for marijuana advocates, with large gatherings and “smoke outs” in many parts of the U.S. (Photo by John Moore/Getty Images)

 

That sense of freedom and huge media coverage of the first days of legal marijuana have sent a tidal wave of tourists into Colorado. By train, bus, plane, and hitchhiking they arrive to take stoner tours—smoking Jamaican-sized joints while riding around a limousine for $300 a day or arrange culinary and gourmet expeditions via WeedMaps.com, an application that helps smartphone users find the closest marijuana store. So many buyers arrived that some waited six hours in line to buy. Then stores put limits on how much marijuana each client can take home. Though Denver has just 560,000 residents, it’s an American crossroads. Look at the map or the highway routes and Denver is like a compass sitting at the heart of the United States. Combining prairies and the Rocky Mountains, Colorado is home to just five million citizens, though Denver International Airport is the 5th busiest airport in the United States.

In order to better understand this new marijuana culture, I began to make some marijuana purchases. My first stop was Evergreen Apothecary, which promised a pile of discounts on hash oil, to marijuana chocolates and Morgan’s new invention called the “Pen Vaporizer.” I’d never even heard of a “vape pen” but knew that smokers prefer to vaporize their marijuana through a superheated chamber which stripped out the smoke, kept the THC kick and was less harmful to the lungs.

Though there is a long line of marijuana buyers, no one is complaining.

As I talked to other buyers in line, I found not drug addicted youth, but healthy parents wanting a break from the hectic pace of modern life. No one here pretends to need “medicinal marijuana” which in the United States is an established market where hundreds of thousands of Americans can buy their monthly, weekly, or daily dose of THC. These are casual users who want to listen to music, play sports, make love, cook, and bring the children to the park or any of the activities that are so pleasurable under the effects of marijuana. Judging from the gray hairs in this line in Colorado, there is an entire new subculture about to emerge in America—call them the Boomer Stoners. Out of the closet into the clouds.

As I get closer to entering Evergreen Apothecary, I see an armed guard looking more Blackwater than High Times. He checks IDs at the door, though practically no one looks under the age of 40. Local police have increased patrols around every store in a coordinated effort to avoid chaos and looting by crazed hordes of marijuana smokers, which is about as likely as a riot at an Elton John concert.

I enter Evergreen and am asked to read a declaration of the dos and don’ts for marijuana smokers. Except for smoking in the airport and taking the pot out of state, I plan to abide by all the rules. Looking around the store is overwhelming—even for a pot aficionado.

 

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Evergreen Apothecary was one of a few dozen shops with a license to sell recreational marijuana on January 1, 2014.

 

I start with oils. Marijuana oils have been around for millennia but modern chemistry and millions of users worldwide have catapulted the marijuana industry into a kind of modern-day oil rush. I am quickly convinced to buy two “cartridges” of organically refined marijuana oil. I get one “sativa” style marijuana cartridge, which is to jack me up, awake and mentally astute. The other refill for my new vaporizer pen is an “indica” strain, which is to knock me into slumbers and slow-motion brainwaves. That’s a state I detest, but given the importance of journalistic integrity and balanced reporting, I buy one of each. The pipe comes for free and I quickly learn how to charge it via the USB port on my computer. I attach a lanyard so that it hangs around my neck like a whistle.

At the next counter I find stacks of “edibles” which range from breads to brownies to Bhang, a “medicinal chocolate.” I choose a “triple strength” Bhang bar that is 48% coca and packs 10 mg of THC per square. The friendly budtender tells me that rookies often don’t understand the potency of eating pot. Some kinds of “magic butter” can take up to 2 hours to take effect, so she recommends a single square. “Just one, you need to learn this way,” says Karina, the comely budtender.

When the owners of the store discover that I am a journalist, instead of kicking me out, they throw together a gift bag that includes “Canna Tabs”—a collection of sublingual THC pills that go directly into the bloodstream. I am also given 14 different strains of marijuana oil, each with its own effect.  By the time I check out and hand my credit card, the bill is $156.43.

As I ride the public bus back to my youth hostel, I pop open the pink box of chocolate, crack off two squares and slip it onto my tongue. Mexican chocolate. Pure THC. There’s no way this can’t end happily I think as a homeless man sidles up to me. His name is Jeffrey. He’s been in and out of prison. Marijuana dealing. Coke, too. He says the homeless love the new marijuana economy. “I know guys who go dumpster diving in the bins near the warehouses, where they are growing. They are finding plastic bags, entire bags filled with clippings and trimmings. I saw one guy with an entire shopping cart piled with black plastic bags, each one filled with marijuana.”

With 37 recreational marijuana stores opened by mid-January and approximately 200 stores finishing up the paperwork, Colorado is quickly becoming the epicenter of America’s sudden and drastic openness to legal marijuana. Already Denver is being called New Amsterdam—a city branded as a center of tolerance and common sense and in which drug prohibition has been suspended.

 

DENVER - APRIL 20: A man smokes marijuana at a pro-pot "4/20" celebration in front of the state capitol building April 20, 2010 in Denver, Colorado. April 20th has become a de facto holiday for marijuana advocates, with large gatherings and 'smoke outs' in many parts of the United States. Colorado, one of 14 states to allow use of medical marijuana, has experienced an explosion in marijuana dispensaries, trade shows and related businesses in the last year as marijuana use has become more mainstream. (Photo by John Moore/Getty Images)

At a  “4/20” gathering in Colorado, one of 14 states to allow use of medical marijuana. The state has experienced an explosion in marijuana dispensaries, trade shows and related businesses in the last year as marijuana use has become more mainstream. (Photo by John Moore/Getty Images)

 

The legalization of marijuana first in Colorado, then in Washington State, and with Alaska and Oregon likely to be next is the beginning of marijuana normalization. This is a new kind of American Revolution, emanating from the heartland of the United States. The illegal nature of marijuana had long prohibited an honest tally of who really wanted to smoke marijuana but a recent poll by CNN found that 58% of Americans now want marijuana to be legalized. Even President Obama, the consummate cautious politician, has admitted his love of smoking pot and recently acknowledged that pot is “less dangerous” than alcohol. Regarding the legalization of commercial marijuana in Colorado, Obama said, “It’s important for it to go forward because it’s important for society not to have a situation in which a large portion of people have at one time or another broken the law and only a select few [read: young black men] get punished.”

After a week of smoking, swallowing, puffing, and sipping marijuana I arrived exhausted at the airport. Then I remembered the little vape pipe around my neck. Take it with me? Nah. It wasn’t easy, but I tossed it into the garbage can at the airport. And the chocolates? I stuffed the final two squares into my mouth, put my bag on the airport X-ray machine and smiled at the security guard, chocolate sweetly melting in my mouth. Like a lot of passengers coming through Denver International Airport these days, my marijuana journey has just begun.

 

Marijuana Inc 116 Reporter Jonathan Franklin in depth reporting

Award-winning journalist Jonathan Franklin, a foreign correspondent of Rogue since 2007, is an investigative reporter who has written for The Guardian, The New York Times, The Washington Post, The Boston Globe, GQ, Playboy, BBC, and 60 Minutes.