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The Presidential Race is a Huge Deal for Pot Businesses in Colorado

The state will vote for a Democratic candidate today, as part of the Super Tuesday contests. With so much on the line, marijuana industry heads are leaning toward Sanders.

by Liz Fields
Mar 1 2016, 3:50pm

Photo by Brennan Linsley/AP

There was one name that kept popping up in dispensaries, cafes, cannabis-related start-ups, and even what is known as a "grow" — an indoor marijuana plantation — in Denver, Colorado on the day before Super Tuesday: Bernie Sanders.

Although marijuana remains legal here, conflicts between local and federal law have caused major headaches for industry heads, who are keeping an eye on the 2016 presidential race and encouraging the pot community to get more involved in politics to ensure that their rights are strengthened, rather than rolled back.

Of all the candidates currently in the race, Sanders, who officially supports the decriminalization of marijuana possession and legalization of medical cannabis, is the most outspoken on the issue. He has supported states' rights to individually vote on legalization, while advocating an end to mass incarceration, particularly for minorities who are disproportionately jailed for nonviolent drug offenses. Last November, Sanders introduced the Ending Federal Marijuana Prohibition Act of 2015 in the US Senate to remove marijuana from the federal controlled substances schedule.

Some heavyweights in the cannabis industry told VICE News that the Vermont senator is the favorite among the state's pot commercial operators, entrepreneurs and consumers ahead of one of the most important primary voting days of 2016, when 12 states, including Colorado, will nominate their preferred presidential nominees.

Related: Pot Tourists in Colorado Are Getting Too High and Ending Up in the ER

Come Tuesday night, the outcome of the Democratic caucuses in Colorado, a purple state, is still uncertain. There isn't a lot of polling coming out of Colorado in 2016, where voters will caucus as they did in Iowa and Nevada. The last reliable poll showed frontrunner Hillary Clinton with a lead of 28 points in November, but that was before Sanders won New Hampshire and drew Clinton to a near-tie in Iowa. A more recent, but less reliable poll, showed Sanders with a slight edge in the state earlier this month.

At the downtown Denver offices of MassRoots, the country's largest and fastest growing social network for cannabis aficionados, co-founder and CEO Isaac Dietrich was gearing up to release the company's official endorsement of Sanders on Monday morning.

"We feel he's the only candidate that would actually roll back federal prosecution of marijuana," said Dietrich, 23. "Bernie will do better here than other states because it has a younger population that is much more open-minded and more idealistic about the way things ought to be, rather than just perpetuating the status quo."

At a number of other dispensaries across the city, others shared a similar sentiment. "The only candidate that has talked about decriminalizing marijuana on a national basis is Bernie Sanders," said Bruce Kennedy, a spokesman for Kindman cannabis products and Grass Station dispensaries. "The others are kind of just dancing around the issue."

MassRoots offices in Denver, Colorado. The company's 28 employees are caucusing for Bernie Sanders on Super Tuesday. (Photo by Liz Fields/VICE News)

Since Colorado voted to legalize recreational marijuana and the cannabis went on sale commercially in January 2014, cities like Denver have seen budding business opportunities and corresponding innovation in the pot industry. The boom has prompted self-styled "Ganjapreneurs" and consumers alike to uproot and move en masse to the Centennial State, which saw a population jump of more than 100,000 residents between July 2014 and July 2015, according to the Census Bureau.

Kyle Sherman, the co-founder and CEO of FlowHub, a software start-up that's developing inventory management and sales tracking technology for grows and dispensaries, said he has also heard a lot of Sanders buzz both inside and outside of the industry. Earlier this month, Sherman attended a Sanders rally in Denver that drew 18,000 people, some of which were relegated to overflow areas outside the convention hall.

Related: Legal Weed Businesses Have to Figure Out How to Handle $6.7 Billion in Cash This Year

"We're not a single-issue state, but Bernie's resonating with a lot of people here," said Sherman. "There are a lot of millennials moving to our the city. We've become a boom town and cannabis is at the center at that."

While recreational marijuana is now legal in four states and Washington, DC, it remains banned under federal law and is still considered a Schedule I controlled substance, along with LSD, heroin, and other drugs that the government sees as having no medical value and a high potential for abuse. The Department of Justice (DOJ) issued a memorandum in 2014 that essentially told states that they would take a hands-off approach to marijuana law enforcement — with the caveat that states just follow a few federal guidelines.

Budtender Genavie Sisneros shows two popular smell jar samples of pot at the Grass Station Dispensary, Denver, Colorado. (Photo by Liz Fields/VICE News)

In two years, legal marijuana has become the fastest growing industry in America. In Colorado alone, it is worth nearly $1 billion a year, according to the Denver Post. In 2016, at least eight more states are expected to have some form of marijuana legalization initiative on the ballot, including California, Nevada, Florida, Arizona, Ohio, Maine, Michigan, and Massachusetts, which will vote along with Colorado on Super Tuesday. These measures range from the use of cannabidiol extract for children with intractable epilepsy to full legalization of marijuana for recreational use.

"[This election] will have a tremendous impact because the president of the US appoints the DEA Director and they have the power to reschedule marijuana if they wanted to today," said Dietrich. "On the flip side, if we elect a president that's anti-marijuana he could choose to enforce federal law here in Colorado. He could go around and shut down all these dispensaries and put tens of thousands of people out of work and decimate local economies, so it's a huge gamble."

Kennedy also noted that the next US president could possibly help determine the outcome of a lawsuit filed by Oklahoma and Nebraska in the Supreme Court against Colorado. The suit accuses Colorado of allowing its legal cannabis to spill over its borders into neighboring states where the drug is still banned. 

Related: Scalia's Death Clouds US Supreme Court Decision on Colorado's Legal Weed

Because the suit has been filed in the Supreme Court, it could be impacted by a majority of liberal pro-pot justices or conservative anti-cannabis justices. The decision may rest with whomever replaces Justice Antonin Scalia, who died two weeks ago. Currently, with Republican senators rushing to delay or block President Barack Obama's forthcoming nomination to replace Scalia, it's possible that the next US president will be responsible for the appointment. Should the court decide the case before Scalia's replacement is confirmed, a tied vote would typically uphold a lower court's ruling. But that isn't the case with the Colorado suit, Kennedy explained.

"This is the West Berlin of Marijuana, we're surrounded by hostile states," Kennedy said. "The worst-case scenario [from the Supreme Court case] could cause a serious blow to the industry here. You can't have a hung court because there's no lower court when states sue each other, it's in the hands of the Supreme Court."

A worker at Kindman grow in Denver Colorado weighs rolled joints, which will be sent to dispensaries for sale. Photo by Liz Fields/VICE News.

With so much riding on the election, some companies like MassRoots are getting heavily involved with politics this year. Dietrich said his company will soon roll out in-app voter registration and push notifications that let users know where and when they can vote for marijuana legalization.

"Your average cannabis consumer is probably not the most politically engaged," said Dietrich. "Our whole focus is making registering to vote, and letting our users know where and when to vote, a key priority because we think that's one of the major things that's holding back the progression of marijuana legalization in the US."

The idea for Dietrich's social network was first planted two years ago while he was taking bong rips with his best friend at college — a moment he wanted to share online with like-minded marijuana lovers, but did not want his grandma to see. The company, which went public last year, now employs 28 staff members who work out of an exposed brick warehouse office in downtown Denver. Dietrich said all of his staff members are planning to vote for Sanders on Tuesday. MassRoots currently has more than 775,000 users, a figure that is expected to reach 1 million by April 20, a significant date for pot enthusiasts.

'Your average cannabis consumer is probably not the most politically engaged.'

Like many other pot start-ups, MassRoots has had to contend with the ongoing conflict between state and federal laws and trouble accessing capital. In the early days, Dietrich operated the business out of his own apartment in Aurora, Colorado, and maxed out all of his credit cards to fund the venture, he said.

"Most of your Silicon Valley capital venture firms are unable or unwilling to invest in marijuana-related firms because it is still illegal under federal law," Dietrich explained. "We've also had two banks accounts shut down, our Instagram page was shut down for a while after we crossed 380,000 followers, our email provider has shut us down before, so on a daily basis you never know what's going to happen."

Related: It's Super Tuesday, the Biggest Day of the US Primary Election So Far. Here's What You Need to Know

Colorado itself is still ironing out its own policies and regulations for the industry. At the Grass Station dispensary in Denver's Stapleton area, "budtenders" showed off display cases containing dozens of cannabis strains, hemp product, edibles, and paraphernalia, while customers, including a group of 10 Venezuelan tourists, unhurriedly browsed shelves and asked questions about pot strains and strength. 

On the surface, Denver can seem like a cannabis consumer's paradise, but the issue for many customers after they make purchases and leave stores, is where they can go to safely and legally consume the products.

"There's such acceptance on so many levels now in Colorado. Marijuana is legal here, but you can't smoke it in public, you can't smoke it in your hotel room, where do you go?" said Kennedy. "Culturally the cat's out of the bag; legally and politically, it remains to be seen. There are a lot of gray areas."

One-pound bags of marijuana grown at the Kindman indoor cannabis plantation in Denver, Colorado. (Photo by Liz Fields/VICE News)

In recent weeks, both Clinton and Sanders have been stepping up their ground games in Colorado. Kennedy said in the last week he's received five to six phone calls a day from the Democratic campaigns. Some were "robo calls," but he said has increasingly been hearing from "live people" in the lead-up to Super Tuesday.

Even if Sanders does sweep Colorado and other undetermined states like Massachusetts and Minnesota where he has been concentrating his efforts and resources, it may not be enough to stave off Clinton's firewall in the South. She is set to win in a majority of Southern states that are also voting on Tuesday after a decisive victory in South Carolina over the weekend. 

Related: 2015 Was a Huge Year for Weed — and 2016 Will Be Even Bigger

Despite his avowed support for Sanders, Dietrich said he would back any Democratic candidate that was friendlier to the industry over Republican frontrunner Donald Trump.

"Do I want Donald Trump in the White House determining marijuana policies? Absolutely not," he said.

Regardless of who wins, Kennedy said that because so many marijuana measures are on the ballot this year, he believes "2016 is going to be the tipping point."

"There's this real sense of everyone in the industry taking a deep breath and waiting to see what comes next," he said.

Follow Liz Fields on Twitter: @lianzifields