John Scanlon walks out of the dispensary after shopping legally for marijuana for the second time in a fortnight. He complains that the prices are higher than what his illegal dealer charges. “It is still expensive, but I am doing it out of convenience,” he says. There are no cryptic phone calls or clandestine meetings. He just shows an ID to prove he is over 21 and buys his weed over a counter.

Many residents of Denver, the Mile High City, have felt a little higher since January 1st, when Colorado became the first American state to legalise sales of marijuana for recreational purposes – or "for getting high purposes", as Rolling Stone magazine put it. Not even Amsterdam has gone as far as this city on the edge of the Rocky Mountains.

You can smell the LoDo Wellness Centre before you see it. The unmistakable aroma of weed wafts up from the basement store on Wazee Street in the nightlife district of downtown Denver. Here eight grams will set you back $160 (€120), but high demand has forced this dispensary to limit sales to three grams per person, enough for between six and seven joints.

“We started rationing from day one – we wanted to spread the love,” says Liz Haynes, an effervescent 26-year-old saleswoman at LoDo. “If we didn’t put limits on it, we would have sold out in a few days. It has been crazy.”

Scanlon says that he can buy eight grams for about $60 cheaper from his regular, illegal, vendor. “Once the buzz dies down and everyone mellows it will be just like having a drink or smoking a cigarette. I am hoping the prices will come down then,” says Scanlon, a 36-year-old lumberyard worker.

Behind the counter downstairs Jay Bouton is overseeing a brisk late-afternoon trade. Balls of dried marijuana leaves sit in glass jars. He weighs out three grams per person in small, transparent ziplock bags. Many customers ask for premade joints. “This is awesome, man,” one happy customer keeps repeating in a stoner drawl.

Purple Trainwreck, an indica marijuana and one of six types on sale, is the most popular, says Bouton. “It is a very good body high, very relaxing – good for after work but not too strong.” The range of sativa marijuana is mellower, more for daily smokers. “People who work can smoke them and still work. It won’t put them to sleep.”

The shop stocks marijuana-infused chocolate, mints and fizzy drinks. The “edibles” come in a sugar-free range for diabetics, and there are also vegan and gluten-free products. Haynes says local police dropped by on the first day to ensure that the new strict regulations were being followed. Everything was fine apart from a bowl of complimentary jelly ranchers: offering free product is seen as incentivising marijuana purchases. “If they are going to let us play, we will play by the rules,” says Haynes.

Smoking marijuana outdoors is prohibited, so you can spark up only in your home. Cab driver Kevin Brown hopes marijuana smoking will be treated much like the open-container ban on drinking alcohol in public. He berated three twentysomethings who were smoking on the street, knowing that the eyes of the world are on Colorado to see how the state copes with this social experiment.

An estimated 150,000 people shopped at about 40 recreational-marijuana dispensaries in Denver and surrounding suburbs in the first week, including about 1,000 a day at the LoDo Wellness Centre, which has served customers from as far away as New Zealand, South Korea and Brazil.

Medicinal qualities
"This is a revolution going on," says Russ, a banker by profession and another happy customer. "People are coming from all over the US." Russ says his parents and their generation "put a wrong picture" on marijuana use, and notes the drug's medicinal qualities and how it soothes end-of-day pain from his rheumatoid arthritis.

Prices will remain high until other dispensaries open.“It’s an unintended consequence that people will go back to the black market, because there is a 36 per cent tax, so it’s very expensive,” says Haynes.

Twenty American states, along with the District of Columbia, permit marijuana sales for medical purposes, allowing registered card-carrying patients to possess marijuana and grow plants. Colorado is the first state to regulate a marijuana market from seed to smoking joint. Colorado’s constitution was changed with the support of 55 per cent of voters in a November 2012 ballot. Annual revenues of about $67 million from a state pot tax of 25 per cent made it appealing to the public in cash-strapped times.

Washington state, in the Pacific northwest, also voted for legalisation, but marijuana stores won't open up there until later this year. Alaska will vote on the issue in August, after campaigners secured enough signatures to put it to a ballot. Other states are expected to follow soon after. A poll published by CNN and Opinion Research last week showed that 55 per cent of Americans believe pot should be legal.

A tipping point has been reached in the US, says Jonathan Caulkins, a drug-policy expert and a professor at Carnegie Mellon University, in Pittsburgh. “Something that was unthinkable for a long time and moved very slowly has now reached the point where the median voters will come over and policy will change pretty fast.”

Attributed to a shift towards liberalism on the left and libertarianism on the right – the issue “doesn’t fall cleanly on the political spectrum,” says Caulkins – legalisation marks a softening of views towards the third-most-popular recreational drug in the US, after alcohol and tobacco.

Since 1960 there has been a trend of stepping back from state controls to suppress voluntary activity by adults, although the United States’ experience with crack and cocaine in the 1980s set back the campaign for marijuana legalisation for a generation.

"Today, with this action with marijuana, in very real respects we are the most liberal place in the world, with the possible exception of Uruguay, " says Caulkins.

While Colorado pot smokers may not be breaking state law, the US government still views marijuana use as a violation of federal law. But in August the department of justice said it wouldn’t challenge Colorado and would instead focus on trafficking and keeping drugs away from children.

“The federal government has, at least for now, taken the approach of we will see how well you do with it, and if you do well with it, we will leave you be,” says Sam Kamin a University of Denver law professor.

Major headache
In practical terms this causes a major headache for Colorado's burgeoning pot industry, as banks, which are regulated on a federal level, cannot serve marijuana retailers operating on a state level. For stores experiencing a fivefold growth in business since January 1st with the new line of sales, the flood of cash is complicating an already complex business trading in a grey area.

Mitch Woolhiser, owner of Northern Lights Cannabis Co in Denver, can pay his taxes and social welfare only by cheque, and to open a bank account he must lie, saying that the account is for personal means. If the bank sees the large amounts of cash lodged to the account, it may get suspicious and close it. This is a nightmare for a business that had to pay $100,000 to fit out a 5,000sq ft marijuana grow space. By law, marijuana stores must grow 70 per cent of the pot they sell.

“My cash flow has been excellent. If this was any other business I would be calling banks, looking for finance to expand. It is frustrating,” he says.

Others see the growth of this nascent industry as the creation of the next tobacco industry, or “Big Marijuana”.

"We are going to create corporate giants that profit off of addiction, because we know that with addictive products there is only one way to make money, and that is to increase addiction," says Kevin Sabet, a former White House drug-policy adviser and a founder of Smart Approaches to Marijuana.

Marijuana buyers in Denver see the pot shops as little more than a new type of liquor store. Few expected it to happen first in a former cattle-ranching “red” state with strong conservative traditions.

“I figured I would see it some time in my lifetime, but I wasn’t sure that Colorado was the place to do it,” says Amy Jordan, a software engineer, leaving the LoDo Wellness Centre with a purchase. “Suddenly it has become this libertarian bastion of gay marriage and marijuana.”