Inside Colorado's green rush: Drug deals go out in the open

• Residents 21 and older can buy up to an ounce of marijuana at a time
• Since Jan. 1%2C stores have seen heavy demand
• Retail price of pot leaped from about %242%2C500 a pound to %246%2C000 a pound

DENVER — David Strong leans over to a stranger waiting in line next to him and confesses he's been buying pot in grocery store parking lots for years.

"I had this one guy, first time, great stuff. Second time, great. Third, great. Fourth? Terrible," says Strong, 59. "When you're buying out on the street, you have no idea what you're getting."

That changed a few minutes later for the semi-retired Strong, who this week became one of the first Americans to buy marijuana from a state-licensed store in Denver. Instead of meeting a dealer in a parking lot for an illegal transaction, Strong bought pot from the Medicine Man retail shop.

Strong is one of thousands of people partaking in a Colorado's green-tinged gold rush. For nervous college students and aging hippies, the doors swung open Jan. 1 on a grand experiment in the Centennial State, where residents 21 and older can buy up to an ounce of marijuana at a time. The state has about 130 retail shops, with names such as Cannabis King, Ganja Gourmet and Purple Dragon.

Since Jan. 1, the stores have seen heavy demand, much of which is from out-of-state customers, says Medicine Man marijuana store co-founder Andy Williams, 45. An industrial engineer by training, Williams teamed with his brother to open the 20,000-square-foot store in East Denver. High demand already has them making plans to double in size and become the "Costco of marijuana." Customers waiting in the lines stretching around the block cheered fellow buyers when they came out during the store's opening Jan. 1.

"It was Independence Day for marijuana," Williams says. "People have this great sense of relief that they no longer have to break the law to do what they love."

The legal sales have spurred heavy demand, and some smaller stores have reported either rationing sales or running out entirely. Prices have changed accordingly: Williams said the retail price of pot leaped from about $2,500 a pound to $6,000 a pound within days of Jan. 1.

State and local taxes add up to about 20%-25% of the purchase price, depending on location, and vendors are allowed to charge whatever the market will bear. Customers from across the country have flocked to the Denver area, where most of the stores are located. Some smaller communities have banned sales, while others are developing their permitting processes.

The stores were authorized under the voter-approved Amendment 64, which requires the state to regulate marijuana like alcohol. The 2012 amendment gave state regulators until Jan. 1 to develop a retail sales system.

"It's generally been uneventful, with the exception that it's historic," says Mason Tvert of the Marijuana Policy Project, an early backer of Colorado legalization. "It's obviously a very momentous occasion, but ultimately, it's just a bunch of adults standing in line to buy a legal product."

This week, many customers shopping at Medicine Man declined to give their names, an indicator that even though it's legal to buy marijuana, a taint remains. Buying marijuana is illegal on the federal level, although federal prosecutors have indicated they'll leave Colorado alone if it follows a set of eight specific guidelines.

Those guidelines are ultimately responsible for a series of state regulations requiring security cameras, armed guards and extensive plant and money tracking systems intended to keep marijuana out of the hands of kids and the profits out of the hands of gangs, drug cartels and criminals.

Colorado's legalization has spurred a boom in what's known as edibles — brownies, cookies or candy spiked with marijuana extracts. It's the easy availability of those kid-friendly munchies that has Denver mom Gina Carbone worried. Carbone, a former PTO president with four kids, says she didn't object when voters decriminalized marijuana.

Carbone volunteers with the group SAFE Colorado, which has been lobbying to tighten restrictions on retail shops and ready-to-eat products. She said she's talked to store owners who inject or spritz popcorn with marijuana concentrate. That's scary, she said, because recent studies indicate marijuana can impair the brain's development in adolescents.

"This is a really tough thing for parents, because of the message that it's sending to kids — that getting stoned is an acceptable recreational activity," she says. "We feel like our kids are an experiment."

A study published last year in the journal JAMA Pediatrics said there'd been a spike in the number of young children being treated for accidentally eating pot, or marijuana-laced cookies, candies, brownies and beverages at Children's Hospital Colorado. The study found that in the two years after marijuana laws were modified in fall 2009, 14 kids were treated for accidental ingestion. In the four years before the change, the study said, no kids had been hospitalized for accidental ingestion.

At Medicine Man, buyers say they appreciate the security and reliability that comes from buying pot from a store, even though they have to pay taxes. At the store, an armed guard checks IDs and waves buyers to the counter, where "bud tenders" offer guidance on what kind of high the buyer is looking for and recommend different strains for their pain-relieving, appetite-simulating or euphoric properties.

Behind another set of locked doors, the store's approximately 50 employees busily tend to thousands of pot plants — fertilizing, harvesting, drying, weighing and packaging. The smell of marijuana hangs heavy over the entire neighborhood, and dozens of prepackaged baggies of pot hang from hooks in the storefront, allowing customers to select from about 30 different strains.

A study estimated the state's $600 million legal marijuana market would generate $130 million in new taxes, although enforcement and regulation would require a significant amount of that new revenue. The study by Colorado State University also estimated that Coloradans will each consume about 3.5 ounces of pot annually under the new rules.

The study concluded its estimates could be wrong as marijuana tourists initially flock to the legal market, then lose interest as the "wow factor" diminishes. Some companies are rushing to cash in on the legal sales. Spirit Airlines recently offered customers discounted flights to Denver with the tagline of "get Mile High," and some tour operators offer marijuana tours for out-of-state residents seeking legal highs.

Buyer Jessica Girard, 21, bought two pre-rolled joints from the store, in part just because she could, she says. A Denver native, Girard says her friends are split on having legal marijuana. She bought the joints because she has back problems but hasn't gone through the process of getting her medical card.

"I trust that my money is going to get me something that will help me," she says. "You know exactly what you're getting. It's right in your face."

Accompanying her is a friend who, clutching the sealed bag in which all purchases must leave the stores, declines to be interviewed or identified. "I don't need anyone knowing I was down here," the young man says, laughing.

Strong says he doesn't mind anyone knowing he's used pot since at least 1972 and doesn't mind paying the extra taxes if it means a more consistent product: "If they legalized this stuff back in '68, the government would be out of debt right now."

State officials anticipate tax revenue from legal marijuana sales will generate potentially hundreds of millions of tax dollars over the coming years. Taxes on a $20 1-gram purchase, for instance, add $7.25 to the total cost. Those tax dollars pay for an extensive tracking and monitoring system, says Jack Finlaw, chief legal counsel to Gov. John Hickenlooper.

"We're going to be sure that we have inspectors out, because one of our highest priorities is to make sure this marijuana doesn't get into the hands of anyone under 21," he says.

Finlaw says regulators will focus on helping the small-business owners get access to credit and banking services, a struggle because many federally chartered banks are wary of handling drug money. He says law enforcement will work with educators to figure out how to persuade teens to wait to use pot until they're 21, in the same way liquor companies have their "21 means 21" campaigns.

Some marijuana stores accept credit and debit cards, although many buyers appear more comfortable keeping the transactions as cash only. Buyers need only prove they are of legal age, and no records are kept of who buys what.

The Colorado State Patrol hasn't seen a significant increase in stoned drivers, and it has no plans to change the way it patrols for them, said spokesman Trooper Josh Lewis. He says troopers use standard techniques, such as the one-legged stand, to test whether drivers are too impaired to be behind the wheel.

"Driving under the influence remains illegal, no matter the substance," he says.

In its first few days of operation, Williams says, his store served more than 1,200 customers and would have accommodated more if city rules didn't require him to close by 7 p.m. Knowing the world's eyes are on Colorado and its legalization experiment, Williams challenged skeptics to visit and see for themselves.

"Reefer madness isn't real," he says. "Adults don't just go crazy because they can all of a sudden buy marijuana in a store."

Hughes reports for the Fort Collins (Colo.) Coloradoan