IN COLORADO, POT IS ALL ABOUT POT MONEY

Denver restaurant workers in the Mile High City are asking: Why work in a stressful kitchen when you can make $22 an hour in a greenhouse?

by Kate Krader

Bloomberg
April 1, 2017

It’s hard to think of an American city that isn’t experiencing a restaurant boom these days. Put Denver at the top of that list: By some accounts, 30 new spots will open this spring, among them an outpost of the beloved New York bar, Death & Company, and Departure Denver, a popular Asian small-plates spot transplanted from Portland, Ore.

However, the city is facing a major problem as a result of one of its biggest recent tourism drivers. The pot industry is taking a toll on local restaurant work forces and in some cases, liquor sales. “No one is talking about it,” said Bobby Stuckey, the James Beard award winning co-owner of Frasca Food and Wine in Boulder and the soon-to-open Tavernetta in Denver. “But Colorado’s restaurant labor market is in Defcon 5 right now, because of weed facilities.”

Denver’s population has been steadily growing. In 2016, U.S. News & World Report ranked it as the best place to live in the country because of its proximity to the great outdoors, along with the tech boom, among other things. The city is particularly popular with millennials. A boom in restaurants soon followed, transforming a sleepy culinary scene into a particularly vibrant one. (Another reason for the expanding dining scene is the $54 million Union Station renovation, which opened in 2014 and brought a concentration of fine dining spots downtown.)

The demand for more restaurant workers dovetailed with the state’s pot boom. Since it was legalized in 2014, cannabis tourism has been big for Colorado, generating $1.1 billion in profit in 2016 and more than $150 million in tax revenue. Although a recent study shows pot tourism was down in 2016, as more and more states have legalized it, people spent more money on weed-related purchases in and around Denver.

A Buzzier Gig

Now, young workers who once saw employment opportunities in the restaurant business are flocking to grow facilities and dispensaries. Bryan Dayton, who co-owns three popular dining destinations in the Denver/Boulder area—Oak at Fourteenth, Acorn, and Brider—feels it acutely.

“Our work force is being drained by the pot industry,” he said bluntly. “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.” Dayton is especially sensitive to these realities as he prepares to recruit talent for a restaurant, a Spanish-inspired steakhouse with a rooftop bar, slated to open in the fall.

Dayton has also documented a small decline in liquor sales that he attributes to people eating a pot-infused gummy bear and then forgoing a glass of wine or shot of whiskey. His alcohol sales are down about 2 percent, or $100,000, at both Acorn and Oak. He compared notes and found out that his distillers and distributors report sales down by about that percentage.

Hard to Compete

Jennifer Jasinski, a Wolfgang Puck alum whose Denver restaurant empire includes seafood-oriented Stoic and Genuine, beer joint Euclid Hall, and her flagship Rioja, agreed.

“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.”

There's no way restaurants can compete, she said. "We have tiny margins as it is." Jasinski has seen a decline of more than 4 percent in beer, spirit, and wine sales at Euclid Hall, her restaurant that caters to the youngest clientele.

Stuckey echoed these sentiments. “A line cook, it’s not a highly paid position: a lot of work, lot of hours, very intense. And you’re having a bad week. It’s hard not to quit for a grow facility where you’re making several dollars more an hour.” He also said there's no way to compete with the siren call of the pot industry. "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]."

Stuckey estimates that at his Pizzeria Locale chain, someone departs for the pot industry every few weeks. He said labor departures have hit the area's construction business equally hard.

“The economy here is booming, but there’s not enough construction workers to get the buildings constructed; they all want to work in grow facilities,” said Stuckey. “Everybody wants to hear funny stories about the pot industry, but it’s a serious part of the business.”

Michael Leibowitz, the Denver-based owner of Veritas Fine Cannabis, a growing company, plus some concentrate businesses and a retail dispensary, has been in the field for eight years.

"For the first six years, you could just put weed in a bag and sell it," he recalled. "Now supply has caught up, and almost outstripped demand. We consider our brand to be high-end cannabis, and you need skilled workers to help achieve that."

His cultivators start at $20 an hour, and he's working on securing health-care benefits for his 50 or so employees. (Leibowitz said a lot of health-care providers don't want to work with weed companies "yet.")

Munchie Money

Still, there are unexpected upsides to the weed business, apart from the influx of tourist dollars it’s brought to restaurants.

“More hungry customers,” observed Dayton. Jasinski said that at her husband Max MacKissock’s pizza restaurant, Bar Dough, a chef came back to work after having quit. “He told my husband, ‘I made a bunch of money at the dispensary, I have my nest egg. I want to cook again.’”

Stuckey said that on the bright side, the pot industry has brought more sophisticated customers to his restaurant, Frasca.

“The owners of these grow facilities are pretty sophisticated, and they’re curious about what they’re drinking,” said Stuckey, whose wine program won him a James Beard award. “If you’re into the differences between different strains of weed, like Kush or Pineapple Express, or Incredible Hulk, then I have some old bottles of nebiollo that I want to taste you on.”