NEW YORK (MainStreet) Bobby Genser invested $100,000 to assist in launching a greenhouse two hours away from Denver to satisfy an increasing demand for pot.
"There's more demand for recreational cannabis and prices have gone up," Genser told MainStreet.
Compounding the shortage is Colorado's 70/30 rule, which requires licensed dispensaries to grow 70% of the cannabis that a dispensary sells.
"When dispensaries run out of pot, they have to go to a wholesaler or licensed grow facility where cannabis is more expensive and you are at the whim of what the market wholesales," Genser told MainStreet. "Currently, wholesaling per pound is $1,600 to $2,300 per pound."
The risk is selling out faster than the time it takes to grow.
"Denver is running out of space and room for licensed dispensaries to expand," Genser told MainStreet. "Zoning in Denver is such that the industrial space that has been taken up by growth facilities is dwindling."
The saving grace is that dispensaries with an Optional Premise Cultivation License (OPCL) can build grow facilities in marijuana friendly counties such as Pueblo and El Paso counties where land is for sale for about $1,500 per acres."Pueblo is one of the municipalities that has embraced the industry as far as legality goes so it's natural that growers would gravitate toward that economically disadvantaged area," said Darrin C. Duber-Smith, professor with Metropolitan State University in Denver. "These counties need the revenue and the jobs. Look for other rural areas of the state to follow suit."
Dispensaries are trending toward growing more marijuana in greenhouses in order to meet the needs of recreational adult use cannabis. A greenhouse is a covered structure, often made of glass, used to control temperature and humidity in the cultivation and protection of plants.
"The shortage of cannabis is definitely a threat but it's short lived because we are building out the infrastructure for greenhouses in Pueblo and will keep going and growing," said Genser.