Cannabis World Congress & Business Exposition, Los Angeles Convention Center.
What influence has marijuana legalization had on the Colorado Convention Center?
Not much, said General Manager John Adams. Marijuana’s effect has been “net neutral” on the venue, which sees roughly a million visitors annually.
For fairs, though, it’s a different story. In states where marijuana is legal, these venues must strike a balance between preserving their family-friendly image and recognizing new social, political and economic realities. At the same time, they could stand to benefit financially from cannabis tax revenue, said Stephen Chambers, Western Fairs Association executive director.
Not all venues are affected equally in the rising tide of marijuana legalization, it seems. In states where voters have legalized cannabis, convention centers and state fairs are grappling with what changes — or lack thereof — wait on the horizon.
BUSINESS AS USUAL
Marijuana is big business in Colorado, one of the first states in the nation to legalize recreational use. Recreational marijuana sales generated about $587 million in 2015, and that figure is expected to reach more than $2.019 billion in 2020, the National Cannabis Industry Association reported.
When Colorado voters first legalized recreational marijuana, there was fear that “our industry would change,” Adams said. Concerns appeared about how “the overall vibe of Denver” as a marijuana-friendly city would impact venue clients and their customers.
However, such fears were never realized, thanks largely to strict laws governing where users can light up. For starters, the Colorado Clean Air Act prohibits indoor smoking at all public assembly facilities in both the city and county of Denver. That applies to the Colorado Convention Center, which hosts about 300 events annually, Adams said.
Secondly, marijuana consumption is
prohibited in public. “It’s not a matter of walking out onto the balcony of a building and then firing up a joint,” Adams said.
The Colorado Convention Center has hosted about four or five marijuana industry events. Attendees at these gatherings discuss topics like banking, cultivation and retailing. The emphasis is on the industry itself, not the consumption of marijuana, Adams said.
Although some states have legalized cannabis, it’s still illegal under federal law. The Controlled Substance Act places marijuana in Schedule I, a category reserved for substances with no currently accepted medical use and a high risk for abuse, according to the U.S. Drug Enforcement Administration.
That hasn’t influenced the Colorado Convention Center’s stance on hosting cannabis industry events.
“It is a business that is legal in the city and county of Denver, and as long as that is in place, we just treat it as any other business,” Adams said, adding that the venue doesn’t require any additional fees or implement extra security for marijuana industry events.
“We treat it just like we do any other show, whether it’s a scientific show or a medical show or a local business meeting of the Chamber of Commerce. It’s another event,” he said.
Jerry Harper, deputy director of sales and marketing for the Phoenix Convention Center, takes a similar view. The venue has been home to the same marijuana business conference for two years, and it is hosting another conference in April, he said.
When hosting these events, the top priority is “to make sure that you’re aware of any state or local laws that could have an impact on this type of business,” he said. He added that recreational marijuana is illegal in Arizona. Medical marijuana is allowed, but the law prohibits its use outside of private homes.
The other key is to treat cannabis business conferences like any other event. Organizers of cannabis business events are usually aware of the stigma associated with the industry. Consequently, it’s critical for facility managers to be “sensitive to that heightened awareness” and treat these events like they would any other, so long as the client is complying with the law, Harper said.
He expects the venue will host more, new cannabis business conferences in the future. However, “we would have been expecting more had Proposition 205 passed,” he said, referring to a failed measure on this year’s ballot to legalize recreational marijuana use in Arizona.
Harper watched the measure closely in the lead up to the election, “just in case it was something that we did need to prepare for,” he said. That might have required drafting new policies for marijuana-related events or “making sure that staff was armed with all the information that they needed” regarding the new law and how it would apply to the Phoenix Convention Center, he said.
MANAGING CHANGE ON ‘SACRED GROUND’
By contrast, fair officials from across the West are still coming to grips with what marijuana legalization could mean for them.
Marijuana legalization and its impact on fairs is “a big, big topic” for Western Fairs Association members, Chambers said, adding that it will be among the topics explored at the association’s Reconnect Convention and Trade Show in Reno, Nev., Jan. 15-18.
Chambers expects more questions than answers. He believes messaging will be a challenge for fair organizers, regardless of what policy they develop related to cannabis.
“No matter what, they’re going to have to be very aware of how they communicate that message to their community because fairs are highly regarded,” he said, adding that fairs are often considered “sacred ground in their communities.”
The contrast between the image of a traditional state fair and legal marijuana makes a noticeable juxtaposition. So, when the Oregon State Fair gave the Oregon Cannabis Business Council permission to exhibit nine live marijuana plants during the 2016 fair, the story quickly became headline news, Oregon State Fair spokesperson Dan Cox said.
“Prior to the opening of the 2016 fair, there was considerable news coverage about the live plants coming to the Oregon State Fair before it even happened,” Cox said.
After some consideration, fair officials decided that in allowing the exhibit, they would be following the lead of state agencies like the Oregon Department of Agriculture and the Oregon Liquor Control Commission, which oversees marijuana sales in the state —and Oregon voters themselves, Cox said.
Permission came with conditions. The plants — winners of a cannabis trade show conducted a few weeks prior to the fair — had to be quarantined in a small greenhouse that no one under the age of 21 could enter, and security was posted at the entrance and exit, Cox said. The plants had not produced buds, the part of the plant that is harvested, dried, and smoked.
The decision soon attracted media attention.
“What we saw was the general news media, not just locally but nationally and internationally, was intrigued by the prospect of a classical, traditional state fair exhibiting live marijuana plants,” he said. “It was, to our knowledge, the first state fair to do that in America.”
However, the spread of misinformation created fires that officials scrambled to put out. Reports circulated that the Oregon State Fair itself was judging the marijuana plants. This was false. The plants had been judged several weeks prior at the cannabis trade show. The Oregon Cannabis Business Council had rented the state fair facilities to host the show, but it was not associated in any way with the fair itself, Cox said.
Furthermore, an “off-hand comment” comparing the trade show’s marijuana competition with a traditional 4-H competition fueled a perceived correlation between the state’s 4-H program and cannabis, Cox said. However, he stressed that correlation didn’t exist.
“Even the merest hint of a suggestion of that was enough to cause some big concern on the part of 4-H here in the state of Oregon,” he said. “And so we had to work pretty hard to correct the record and calm down the story.”
The public’s reception of the exhibit was mild in contrast to the flurry of news reports. Fair officials received “a handful of direct complaints,” but “there was, in essence, no public outcry,” Cox said.
By the time the Oregon State Fair opened, the story that had propelled it into the international spotlight had begun to die down. “And by the end of the fair, it was a nonstory,” Cox said.
“The Oregon State Fair didn’t really suffer any ill consequence from having that exhibit,” he later added. “If anything, it fueled a level of publicity we wouldn’t normally see.”
DOLLAR SIGNS AND QUESTION MARKS
Another question on fair managers’ minds is whether marijuana tax revenue will be a source of funding. Because fairs play an educational role in their communities, they might be “well positioned” to benefit from cannabis taxes, Chambers said.
At least one state fair has benefited from cannabis taxes. This past year, Colorado State Fair officials invested $300,000 from state marijuana tax revenue to fund improvements to the fair’s horseshow and livestock areas, General Manager Sarah Cummings said.
“We anticipate that much and more from the state of Colorado” next year, she added.
An additional $500,000 expected from Pueblo County marijuana tax revenues are earmarked for streetscape improvements that will enhance the fairgrounds’ points of entry, Cummings said.
Apart from the financial windfall, marijuana legalization has had few impacts on the Colorado State Fair. Laws banning public marijuana consumption also apply to the fairgrounds, so fair officials haven’t had to draft new policies governing its use. “It really has not impacted us in our day-to-day operations because legally, it’s not permitted at the facility or in public,” she said.
The Colorado State Fair is a division of the Colorado Department of Agriculture, which recognizes cannabis and hemp as agricultural commodities and shares regulatory authority of Colorado’s cannabis industry with other state agencies, she said.
“The State Fair wants to follow suit with the state and with the Department of Agriculture,” she said. “But we do very consciously try to maintain the family-friendly feel and the traditions that people come to expect with a state fair.”
For the California Exposition and State Fair, located in the state capitol of Sacramento, the potential upshot of recreational marijuana is less clear.
“We don’t know yet” what the impacts will be, Chief Executive Officer Rick Pickering said.
California voters passed Proposition 64 in November, making California the most populated state in the country to legalize recreational cannabis, the Los Angeles Times reported.
California Exposition and State Fair officials are staying in touch with state agencies developing the regulatory framework for recreational cannabis, Pickering said. One of the unknowns is how the new law will affect designated smoking areas at the California State Fair.
“We do not have enough information yet from the other state agencies to determine how our designated smoking areas may or may not be impacted by cannabis for this next summer.”
Interviewed for this story: John Adams, (303) 228-8000; Stephen Chambers, (916) 927-3100; Jerry Harper, (800) 282-4842; Dan Cox, (971) 701-6573; Sarah Cummings, (719) 561-8484; Rick Pickering, (916) 263-3000