PHOTO: Colorado's restaurants are hurting because of weed. (photo via Flickr/Heath Alseike)
Legal weed dispensaries are hurting Denver’s restaurant industry, which is counter to what you may have expected.
If you allow us to slide in a bit of generalization, weed’s legal status should have been a boon for the industry, with aficionados strolling into every last fast-food and fine dining establishment to devour a bowl of chili fries or a platter of the location’s finest munchie fare.
But a report from Bloomberg’s Kate Krader suggests something we hadn’t previously considered: Someone has to actually work at these restaurants.
The economic pull, it would seem, has been far too great from those legal weed dispensaries that can pay its employees more than the dining industry. Krader spoke with Bobby Stuckey, co-owner of Frasca Food and Wine in Boulder, and one that will open in Denver: Tavernetta.
Stuckey didn’t mince words, “No one is talking about it, but Colorado’s restaurant labor market is in Defcon 5 right now, because of weed facilities.”
Krader goes on to explain that the Denver area became a restaurant hot spot recently, crediting a tech boom, millennial interest and reinvigorated downtown area.
But these restaurants never considered losing a major portion of its workforce.
Bryan Dayton also owns establishments in Boulder and Denver. He explained the specific reason weed is hurting the restaurant industry in the area, via Bloomberg:
“Our work force is being drained by the pot industry. There’s a very small work pool as it is. Enter the weed business, which pays $22 an hour with full benefits. You can come work in a kitchen for us for eight hours a day, in a hot kitchen. It’s a stressful life. Or you can go sort weed in a climate-controlled greenhouse. It’s a pretty obvious choice.”
Prolific restaurant owner Jennifer Jasinski explains to Krader that, many times, it’s more than just money that pulls a portion of the workforce:
“Cooks take trimming jobs and make $20 an hour, but it’s not just that. Pastry chefs are in high demand in the pot world. Laced candies and gummy bears are sought-after treats when they are made well, so pastry chefs and cooks can make them for three to four times the money a restaurant can pay. All this just exacerbates an already tight work force in Denver.”
Restaurants are notoriously difficult to turn into a profit. It’s one business that you get into if you have a passion for the work, not if you hope to make it rich.
Stuckey confirms that margins are ridiculously thin: “If you make 10 percent profit in the restaurant business, you are in the hall of fame as a great operator. Compare that to most other businesses—and presumably the legal pot industry—where if you did 20 percent profit, you would be fired as the [chief executive officer].”
READ MORE: Take a Bite Out of Denver’s Foodie Scene
Eater.com explains that some restaurants have seen a four percent dip in alcohol sales. The reason is quite simple, if you come in already high, then you aren’t about to clear the place of all its booze.
That’s not to say weed is doing the state much in the way of harm when it comes to the travel industry. Last July, a study found that the weed industry may have “influenced” as much as 49 percent of visitors into coming to the state.
Bloomberg puts the boost to the tourism industry at $1.1 billion with $150 million in tax revenue.
And, of course, there is a matter of an old cliché ringing true. Dayton tells Krader there are, “More hungry customers.”
A tremendous market correction seems to be occurring across the state as restaurants attempt to serve a tourism boom with far fewer workers than it had previously.
However, Colorado should prepare for another shift in various industries tethered to travel. Both Bloomberg and Eater.com remind that several states—California, Maine, Massachusetts, and Nevada—have voted to legalize weed and are slowly marching to a date that would allow locals and visitors to smoke.