TELLURIDE – With neighboring Montrose, Delta and Mesa counties voting to ban medical marijuana in the November election, San Miguel County may soon become one of the few places in Southwestern Colorado selling medical cannabis.

Montrose, Delta and Mesa counties have all voted to ban medical marijuana dispensaries within their unincorporated boundaries; neighboring Paonia, Ouray and even Olathe passed similar measures. With the Grand Junction City Council having already banned dispensaries in October, Telluride, with five dispensaries in operation, is now poised to be a hub for cannabis cardholders to purchase their medical marijuana.

An Increase in Sales

With the large radius of dispensary-free zones surrounding San Miguel County, Telluride’s Alpine Wellness Business Manager Mike Grady said he expects to see an increase in sales.

“I think San Miguel County and Telluride are going to see a huge influx this year on weekend traffic from Montrose, Delta, Olathe and Grand Junction,” he predicted. “People are going to turn it into their weekend trip and come to the mountains, maybe go skiing and pick up their medicine,” said Grady, whose dispensary opened almost one year ago.

Conversely, Telluride Green Room owner Greg Viditz-Ward does not believe there will be an increase in sales from out-of-towners, citing a lack of extra business during summer festivals as proof.

“If they are in-state, they can shop here if they have a license or card. But if they are out-of-state they can’t shop here,” Viditz-Ward reasoned. “You also see that the people who come from Denver or other areas, they are more familiar with their own dispensaries. So they will buy their own product and bring it with them.”

But with the crucial early-winter tourist season approaching, dispensaries need to be careful about how they conduct their operations, said Viditz-Ward.

“This is a new industry, and we want it to succeed, and I think to succeed we need to gradually work our way out,” he said.

A walk along Main Street delivers whiffs of marijuana from retail shops as well as cannabis images on sandwich signs promoting a discount or certain strain. Although this in-your-face approach could potentially increase sales, San Miguel County Sheriff Bill Masters said, shoving the industry in everyone’s face, including children, could highly offend tourists, even locals.

“I’ve had people comment to me that they don’t like it, and that they will not bring their families back,” Masters said. “I think that if the dispensaries don’t police themselves regarding that, they will see themselves eliminated or greatly regulated.”

An increase in sales may not be the only thing that San Miguel County has coming its way. Marijuana is a hot commodity, and with stories rife about armed robberies and “ripped-off” grow operations in California and Colorado, San Miguel County Planner Mike Rozycki said that trying to find a happy medium between the production and sale of medical cannabis and security is the county’s ultimate goal.

“The issue is about trying to find a balance, making sure the locations and the level of security protect the surroundings from a potential epic of lawlessness,” Rozycki said. As for county planning, he said: “We didn’t want to see [dispensaries] in residential neighborhoods; we wanted to direct them to established business districts and areas where there is close proximity to law enforcement.”

To date, San Miguel County has three optional grow facilities within its unincorporated area, and two more awaiting application review. Some might see this as another outlet for potential crime. Sheriff Masters, however, disagrees.

“I’ve heard this argument from colleagues, that they might cause crime because of their crop being valuable,” Masters said. “I argue that the same thing happens with banks, in that banks have a valuable commodity that they are dealing with, and that they can cause crime since people try to rob them.”

Nevertheless, dispensaries and grow centers acknowledge that risks exist, and take beefing up security, with surveillance equipment and alarm systems, into consideration.

A Boon to the Local Economy

While the medical marijuana industry bears certain negative aspects, the positives include benefiting local economies through employment and sales tax revenues. Elsewhere in the state, Denver has seen an increase of $1 million – a 1 percent gain – in revenues from December 2009 to April 2010; Colorado Springs collects approximately $50,000 a month, which its government proposes to put towards restoring bus routes and to establishing a specific medical marijuana police unit in the upcoming budget.

The Town of Telluride received $33,000 in 2010 sales tax revenues from its dispensaries between the months of January to October, according to Financial Director Lynne Beck. That amount seems low compared to other, metropolitan areas of the state, but San Miguel County has approximately 320 cardholders versus 12,000 residing in Denver, according to the Colorado Medical Marijuana Registry.

“Some of the bigger cities are going to have many, many more dispensaries and a lot more clientele. Being a small area, there is a small clientele,” said Beck.

As far as incorporating the extra revenue into the annual budget, Beck said that considering the industry is under one year old, there are no past sales tax figures available for assessments.

“Because we don’t have a full year, we have not increased sales tax,” Beck said. “We never take a new business and say that we are going to increase our budget for that.”

At the same time, Telluride Mayor Stu Fraser said the overall economic benefits from dispensaries are debatable, with respect to both taxes and employment, since they usually employ a relatively small number of workers.

And so, although “employment is a positive,” said Fraser, “I do not know the effect on the whole spectrum.”

On the sales tax front, he added, “I was surprised by how low it was. It makes you wonder how successful the amount of medical marijuana dispensaries will be.”

Future is Uncertain

The divisive medical marijuana issue will continue for some time. San Miguel County currently has seven dispensaries, five in Telluride; the city of Delta has one – at least until their moratorium expires, in May 2011; and Ridgway has a medical marijuana delivery service serving Ouray, San Miguel and Montrose counties.

In Grand Junction, the city council recently verified a signed petition against the citywide ban, bringing the debate and the fate of its 23 dispensaries back to the table. Those in the “prohibited” county zones plan to continue to operate until commissioners decide what to do with them.

Colorado is expected to have a marijuana legalization measure on the 2012 ballot. But based on the results of the 2010 election, it will be interesting to see what the future holds for the medical cannabis industry.

“There still is a large segment of the population that believes that medical marijuana, or marijuana in general, is not appropriate,” Fraser said.