It is only a question of, "How Successful?"

I take the opportunity as history is unfolding to create the case for how to answer "how successful will Colorado's legalization be?"

We are almost at the end of the first quarter.  The preliminary figures for the state indicate $2.1 million per month Recreational and about $1.4 million per month for medicinal.

Therefore, , Governor H. et. al., who opposes the purpose or promise, and cautiously enforces the will of the people and law, put out an estimate that the right was quick to glom upon saying that $137million is the revised estimate, not the projected $578million!

Disappointed??  

Okay, so lets review the situation from the point of view of a Business Broker.

(A) Dispensaries and Recreational Dispensaries have the unique problem of being required by law to run an all cash business... only now being solved.  If taxation requires compliance, but compliance means not opening up a Federally Insured account, then we have a reporting problem by definition!

Business operators famously keep poor records.  They are involved in servicing their clients, meeting customer demand, and coordinating vendors.  So, why do we expect the skill sets include math, accounting, or record keeping?  

My experience reviewing hundreds of business opportunities over the years suggest that of the whole: 80% are well meaning but sloppy or contain some small errors; 10% are well kept; and 10% are just outright sad.

I think you must realize that most business owners are working ten hour days almost every day of every year.  No matter how well intentioned, mistakes can be made.  I would put bad actors at about 1 ~ 3% depending on how you define "bad."

Now try doing the whole thing as a cash basis accounting, with only cash.  That adds burden at least, and for comparison if you legally compelled McDonalds, Verizon or Comcast to have to operate that way they would declare Bankruptcy overnight.

(B) January sales figures?  Ever hear of "seasonally adjusted?"  We have endless data about how the cold weather this winter has reduced retail activities across the board.  This is only mitigated by the pent up demand, but there is also novelty effect to consider.  

The pent up demand may skew the figure higher, but number of dispensaries was very limited.  The novelty is a wash-- you would have customers who were trying it out to see what happens, and you would have regular clients possibly holding back to see how "safe" the situation appears.  Therefore, the Season and travel prohibitions (not to mention that in January most licenses for Rec hadn't been approved.... most places are getting their permits in Summer) take the most weight for the adjustment.

So if adjustments are a push, and the skew goes to "January figures," we include that January will probably in five years time be known in the business cycle of Cannabis that January is typically an average month to the mean.

(C) I was wrong, or right it doesn't matter:

1. kilv ‏@kilv Protected Tweets  Jan 21

   One store that was permitted in CO on Jan 1, '14, reported off the record that they had sold approximately $250,000 in the first two weeks.

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   6:39 AM - 21 Jan 2014 · Details
2. kilv ‏@kilv Protected Tweets  Jan 29

   from that anecdote I estimate ~$500MM in annual tax revenues for CO directly attributable to legalization! Closer to $1BB counting knockons

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   10:02 AM - 29 Jan 2014 · Details

   
   

Okay, so if there are (A) underreporting and (B) adjustments, then we have to consider the truth of how accounting and valuations work... We wont have the actual final and adjusted January '14 numbers until July of 2015!!!

TIME TO PANIC?

Oh no, this really hasn't worked out... I guess this has just been a disappointing experiment in personal freedom and individual liberty.

I relented, now I ask critics of anti-prohibition to relent and admit that actually in these government projections they have met the threshold (where the first $40 million goes to schools) for revenue to run the program, the powers that be will have surplus to spread around, and once again, because Macroeconomics is so vastly complex and so mundanely precise, is an inaccurate art; that therefore any law that pays for itself, improves freedom and liberty, and pays for other state functions-- by definition in Business is a success!

MY PREDICTION?

I am going to hang my hat on the ~$170million mark as the definition for Rec Sales Tax of success.  I will wait until July 2015 to see the whole picture, and then I will ask how the knock-on effects are calculated: employment, employees paying taxes, income generated being sent back into the economy; immigration; and other net benefits to the State.

I will point out that taken as a whole, the fuller effect, the net benefit to the economy will meet my prediction in my tweet, but again I am not that attached to how accurate my prognostication.  That isn't my job!

The state probably has included to some effect the above considerations, but the willingness to structure the dialogue of a government program that not only pays for itself, but earns, as one of disappointment and failure is a non-starter for what will inevitably become the very early days of a multi billion dollar legitimate industry!

Silly Season: Open for Hunting

Dems have always had constituent group politics: gays, latinos, blacks, labor, etc.

Those groups, or factions, dont always agree, and often dont get everything they wanted, either.

This flexibility is something the Pubs are not known for; if anything they are know as being in lock-step, on-message, and in-synch-- a real machine. Except now, they really dont agree with one another on how best to proceed, and Boehner may risk (political) life and limb trying to get the stump out of the thresher-- to use a farming metaphor.

In other words, they now actually have sub-groups!

How Boehner deals with the transition to a group process format for these expressed interest will be measured by the body count in the 2012 elections. Try focusing on that instead of screwing Obama, and by the transitive property the nation as well-- First reason, it's what you guys did last time you were "in power."

Lest we should forget that neither party wants to talk about the real pain points, and so most of what is being fed as the primary proceedings of the political dialogue in DC really amounts to irrelevant misdirection to keep the interested confused and the rest of us bored with all of the lying!

Strategy, Tactics, and Terrorism

I will make this brief.

The idea that we can stop terrorists who seem to be coming in via London, Amsterdam, or other foreign ports into America to set off havoc (and bombs) by essentially removing civil liberties here at home beggars belief.

A phrase that would have been heresy just several years ago, but is now on the TV-machine a lot is "security theater."

Now in my mind this would be the staging area for a secure zone, but in fact means staging an act which is designed to lend the appearance of greater safety.

We still haven't completely implemented the work of the bipartisan 9-11 Commission, Republicans continue to play petty politics by not conferring a TSA Chief, and meanwhile New safety measures appear arbitrary... I mean here.

The simple Strategical guidance I would offer is simple: We must shift from a Reactionary Defense to a Proactive Defense; We must shift from a Nation-State Invasion Model to a Sectarian Counter-terror Model.

Easier said than done!

That said, Proactive Defense looks more like what the British accomplished in 2005 with the liquid bombers; or the French have been dealing with since Algerian Independence in 1962. A lot of very advanced police work!

Our current reactionary basis has us looking at areas where the opponents last struck. As they say in investing, "past performance does not guarantee future results." This is backwards hindsight mentality.

The balance is to get international cooperation on improved intelligence techniques that somehow maintains reasonable personal privacy and functional civil liberties.

As for our wholesale invasion of places where terrorists live, well that is as delusional as the idea that Terrorists will somehow destroy the Freedom we enjoy in the West.

Our freedoms, our wealth, and our model of social change is not something that people plan on giving up on, and like any good product or service-- it is in high demand!

Ours is not a natural state of governance, but a logical outcrop as a result from hard earned lessons and wars of the past. Ours is the best model, for now, and people basically like Freedom, Liberty and Justice. So the terrorists can't expect random acts of havoc to remove or somehow dethrone this truth.

On the other hand there are dissenters and at the harshest end bad actors, those who would commit terrorist acts, probably in any major nation-state in the world. It becomes a question of what is aspirational and what is operational as to what threats are indeed real to human safety and liberty.

So, to invade yet another country to ensure freedom and democracy is so 20th century, and a very proven failed idea from not just a budgetary, but a benefit-cost, point of view.

Like NASA, our defense and offense needs to get more focused, accurate, and scale appropriate to live within their means.

Aftergloworm Turning

One week since a huge landslide in Presidential politics for the historic figure Mr. Obama.

I imagine, although I've been busy, like most people, cobbling together the means to afford the predicament of this economic situation, the MSM has been focusing on several other items not related to presidential politics, or at least that is what I would hope will be happening.

Not to say that I dont appreciate a good honeymoon... thats all fine, for christsake the "O" Administration doesnt get into power for another 70 days, and it would be too bad if after his first month the desperately unimaginative and incurious Media are already "looking back to the 'first' 100 days."

That said, the fourth estate has been an overwhelming disappointment during the "W" administration. I think when some anchors got the Katrina "scoop," in other words it wasnt being covered or handled properly (a) some of the real news hounds smelled a story, but alas, I am growing cynical, I also think that some of the corporate execs felt there may have been liability in under reporting (or to be accurate in my guess, 'that the disinformation of the government around events and items related to the catastrophe in LA and secondarily in MS could subject that reporting organization to liability.' But of course that didnt or wouldnt bother Fox as a quasi-offical bully pulpit for the W admin.), therefore they put boots on the ground to investigate-- and began to WAKE UP.

If every MSM vendor is serving up the exact same pile of tripe in varying portions and from minutely differing vantages to form slightly different piles of the same garbage, then we have truly learned nothing in the past eight years.

How cool would it be (a la Woodward and Berstein) to actually scoop the Congressional Investigations? Go ahead reporters in waiting, cub reporters, and various CSI/Inspector Clouseau/Mrs. Marple wannabes... I would estimate there are literally dozens (if not thousands) of reports to be filed that discover real evidence of how foul the government and its administration has been and how we have been led astray. All of them potentially original, a potential scoop, and vitally important to the restoration of communication, democracy, and law and order in our society.

That is the duty of the Fourth Estate. Not to burnish the non-sequitur utterances of incompetents, nor to buy into the lies without introspection or vigorous discussion and examination. Sure there will be mistakes, but rather an honest mistake done for duty and country, than as a tool of the state, say I.

Lets explore the issues... Going into the meta of number of mortgages in default is fascinating for economists, chartists, and financial students like me... But how many reports of hardship, heartache, and wrongdoing can be found within these types of numbers? Countless.

The "horse race" type reporting was cheap, easy, and allowed the execs, reporters, and much of their field staff to drive small distances (with apologies to those who actually rode tirelessly with the campaigns) and appear to be offering comprehensive coverage of "what is happening in America."

Thank Gawd the two year Presidential Campaign is now finally over, and not to diminish from (oh theres another ten thousand stories) all the personal emblematic meaning Americans have from this historic result, but lets start ACTUALLY reporting on the Actual events from actual places on this earth in order to more clearly see how far we have been led astray-- and how much ground our society and the world need to make up for the unmitigated disaster of these last eight years!