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Hotels Profit From Marijuana Legalization

PHOTO Erica Zhao


Hotels Profit From Marijuana Legalization

Legalizing cannabis boosts the economy in many ways.

One of the most overlooked benefits of marijuana legalization is the boost it gives businesses that don’t have anything to do with weed. Long before so much as a gram of pot can be sold, realtors, contractors and construction crews are needed to get cultivation operations and dispensaries whipped into shape. Properties must be sold, structures built, gutted, redesigned and fitted with new electric and ventilation systems. It’s a whole process that most people don’t give a second thought, and it is one where presumably thousands of non-pot-related workers are reaping the rewards. In some cases, the all-around economic impact of legalization can be in the billions of dollars, and a lot of that starts from the ground up. But is post-legalization business dealings just as lucrative? Well, if the results of a new study hold any weight, it looks like at least the hospitality industry experiences a buoy in profits once weed goes legal.

According to aresearchers at Penn State, hotels are raking in beaucoup bucks on the heels of recreational marijuana laws. In Denver, Colorado, a place that should be considered one of the founding fathers of legal weed in the United States, hotels received a boost of well over $100 million post-legalization. It’s a little tidbit of information that lead researcher John O’Neill, professor of hospitality management, believes naysayers of legalization (or those on the fence) might find interesting.

“The production, sale and consumption of recreational marijuana have been legalized in at least 10 states, and many others are considering legalization,” he said in a statement. “My findings could be useful to government officials and business owners in states that are considering legalization.”

The results of this study should come as no surprise. Colorado is one of the most popular destinations in the U.S. for the cannabis curious. Roughly 25% of the people who traveled to the state from 2013 to 2018 listed legal weed as the primary reason, according to a report from CNBC. It’s the whole reason the state is considered one of the most successful cannabis markets in the country, as it is now pulling down impressive cash hauls that have surpassed $1 billion.

Toking tourists need somewhere to stay while they are in town, creating a situation that has “positively affected hotel revenues in Denver,” O’Neil said, “totaling approximately $130 million in new hotel revenues.” 

But the cash cow doesn’t last long.The study explains the revenue boost as “short  term.” Most of the increase took place in 2014, which was the inaugural year for legal weed in Colorado. Denver experienced a 9% increase in hotel visits during that time, but the numbers haven’t been as impressive since then. This drop, however, can be attributed to various factors, the study finds. The main one being that other states have launched recreational pot markets of their own. California and Nevada are now super hotbeds for cannabis tourism. Not only is marijuana legal in these areas, but they are often preferred destinations for those travelers who enjoy warmer weather and a lot less snowfall.

“One of the reasons that the effects were short term may be that additional areas have subsequently legalized recreational marijuana,” researchers wrote.

What is interesting, though, is while legal marijuana is lining the pockets of hotels, these businesses are not exactly showing pot consumers much hospitality. A lot of hotel chains have a strict “no smoking” policy that includes marijuana. Anyone who breaks the rules can be charged a cleaning fee of $250 or more. It’s happening all over the country, and a lot of times the customer receiving the charge isn’t the one responsible for the offense. There have been a slew of stories published over the years of tourists being unjustly charged for smoking pot in their room after the housekeeping staff reportedly smelled marijuana. There is typically no investigation in these cases, either, and the guests often don’t even realize they’ve been charged until after they get home.

Fortunately, some hotels are starting to come around a bit. While most larger hotel chains smoking policy “covers the smoking of any marijuana, tobacco or vaping products,” some are starting to establish areas for pot consumers to do their thing. Granted, they may be outside, but a far cry from a total ban. It should be noted that these policies have more to do with smoke than marijuana itself. No hotel chain cares if guests consume edibles on their properties. There are also Air BnBs and old school bed and breakfast joints that are catering to the stoner class. Smoke all you want! All of these places understand the financial benefit of going full-blown pot-friendly. Perhaps once the social consumption issue gains solid ground, we could see more hotels loosening some of their restrictions on marijuana. Until then, they’ll likely keep getting our money anyway.

TELL US, have you traveled to another place to experience their marijuana scene? What was it like?

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