Colorado’s cannabis industry is growing fast, with armoured cars full of cash a common sight on Denver’s streets. But businesses are stuck in a legal no-man’s land – state laws allow the drug to be sold, but federal laws still prohibit it.

I am in a bed and breakfast, and it’s Friday evening, Happy Hour. Drinks and nibbles are flowing freely, but there’s something else – a sweet, sickly smell in the air. Yes I’m in Denver, the Mile High City, 1,600m in altitude, in Colorado, the first American state to legalise the consumption and sale of cannabis for recreational use, in 2014.

That move has created a new industry – growers, stores, dispensaries, manufacturers and all sorts of ancillary businesses. Until recently this was black market, a criminal activity. Now it’s a billion-dollar-a-year industry, paying $135m (£90m) in state taxes.

It all began in the year 2000, after a state-wide referendum changed the Colorado constitution to legalise the use and supply of marijuana for medical purposes. This was not a move led by politicians; the current governor is still opposed. But the people spoke and the legislators had to turn the decision into fact.

Colorado was not the first state to legalise medical cannabis. It’s claimed to have many physical and mental effects: easing pain, calming fits, energising or relaxing the body, depending on which particular strain of the drug you use (and which particular dosage).

Now, there is something very weird about cannabis in the US. Using it and growing it is still a federal crime. Though individual states have fiercely defended their own legal rights, marijuana is still officially classified as a schedule one drug, as fearsome to the federal authorities as heroin.

Find out more

  • Listen to Colorado’s Big Marijuana Experiment on In Business on BBC Radio 4 on Thursday 28 April at 20:30
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In many other US states, growing the drug in the quantities I’ve been seeing would land the grower in prison for 20 years. Even legalised, the medical trade has been highly regulated.

And as Coloradans got used to the idea, there was another referendum in 2012 which made the recreational use of cannabis legal as well. The people voted, and the