I'm not sure about the specifics for the colorado law, but I read an interesting article about the repercussions of legalization in california.
25% tax on gross sales (not just profits, but all sales) + requiring products to be produced inhouse + a 9 month waiting period for permit approval.
That makes opening a new dispensary impossible IMO. You have to rent an empty building for 9 months, while paying for all the fees, studies, and permits. Only then does your permit come before a city counsel who can deny your permit without needing any legal reason to do so. They can deny you because they are having a bad day if they want to.
And then and only then can you legally open a business where you have to pay to have a camera system streaming to law enforcement who watches your every move to make sure they bleed every penny out of you. You start off by paying 15% excise tax on your gross sales, then you pay 10% cannabis sales tax, then you pay local sales taxes (in Denver this would already add up to 32.5% tax on sales), then you still have to pay state corporate taxes (yes, the 25% is a different tax), then you pay federal income taxes where your budtender's income is a non-deductible expense. Then if there is any money left over you pay people salaries which are then taxed again by both the state and the federal government.
This is not a very good way to invest your money. You're better off buying lottery tickets.
On the other hand this law makes it incredibly difficult to catch black market dealers/growers. It's legal to grow and posses bud, so a cop saying "I smell marijuana" is no longer probably cause for a search. As a black market grower/dealer your legal competition is being taxed and regulated into oblivion, so you'll be able to offer your products at a lower price. The black market are the clear winners here.
Basically, the price would plummet to about 20-38$ an ounce, putting tens of thousands "mom&pop" operations out of a job, tax revenues on something so cheap would be null. Overall the economy would be further damaged. Only people who would make money would be "big business" who have the capital for large commercial grow-op factories, and the retail networks in place(think tobacco companies) or dutch companies would set up shop and funnel profits away to overseas shareholders.
The article you read is bullshit.
How legalization works is entirely dependent on the details. In Colorado, those details are going to lead to an increase in black market sales and an increase in protection for black market dealers.
So it depends on what type of legalization we get. Nothing is set in stone.
The bud market is entirely based on who can put out the best products. Product pricing is irrelevant because people will pay more money to get better bud 99% of the time. In Cali we have dispensaries. Some dispensaries have their products price capped at $45 an 1/8. Some dispensaries sell bud for up to $65. The dispensaries who cap their prices at $45 aren't putting the dispensaries who sell at $65 out of business. The dispensaries with the best buds succeed regardless of price.
It doesn't matter if a tobacco company goes up to Humboldt and buys 100k acres of land to produce bud. They will still be selling outdoor. People would still rather spend $50 for an 1/8 of good hydro than get a great deal on shitty outdoor.
And the Dutch don't have shit on Cali. I'd like to see them try to compete here. They would fail. The California cannabis industry passed up Amsterdam a long time ago. Fuck their bubble hash, we have dabs.
