Colorado is no stranger to the debate over legalizing marijuana. Medical marijuana has been legal there for a decade now, and storefront medical marijuana dispensaries have popped up like, well, weeds along the state's Front Range -- the majority in Denver and Colorado Springs.

Demand for the product has soared. More than 100,000 people have reportedly registered in Colorado as medical marijuana users -- a pretty large number in a state of 5 million. And, of course, many budding entrepreneurs and avid weed fans have sniffed out a business opportunity. But as the market has grown so have concerns that some not-so-savory characters are profiting from the boom.

As a result, Colorado has enacted new laws aimed at regulating the state's estimated 1,100 medical marijuana dispensaries. Convicted felons, for example, won't be allowed to operate a dispensary -- a rule that the Drug Enforcement Agency estimates will force some 18% of the state's dispensaries to close, according to the Associated Press. Dispensary owners also must apply for a license by Aug. 1 and fork over thousands of dollars in fees to secure that license.

For some municipalities, especially in this time of economic downturn and strained budgets, the idea of new tax revenue from medical marijuana can be very tempting. Marijuana is, of course, still illegal at the federal level, and this current boom has been compared to the days of Prohibition -- when some cities and towns turned a blind eye to the illegal consumption, and often profitable production, of alcohol.

"You have to balance social objectives with economic objectives," says Robert McGowan, a professor of management at the University of Denver's Daniels College of Business. "This is a classic case study in the pull-and-tug between the social issues about whether it should be available -- the medical aspects and the like -- and then the economic ones in terms of the amount of revenue, taxes, etc."

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