Denver Government Shuts Down Kids' Lemonade Stand For Not Having a License

P. Gardner Goldsmith | May 31, 2018
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In 2014, Colorado was the first U.S. state to decriminalize marijuana for more than medical use, so one might think that folks in its capital city of Denver would be inclined to be “hands off” when it comes to even less controversial chemicals that people might voluntarily buy, sell, or ingest.


Denver police recently swarmed upon the Knowles brothers to stop a dangerous, aggressive act. They were selling lemonade.

As Shaun Boyd reports for 4CBS Denver, the tiny terrors and their clearly wicked mom, Jennifer, set up their stand this weekend, raising money for a charity to help an unfortunate child in another country. They located their stand near the Denver Arts Festival, and near another vendor selling lemonade. Her kids’ price was $0.75 per glass, or two for a buck. The competition, Jennifer noted, was selling its glasses of lemonade for “$7.00 a glass.”

Good thing she and her outlaw banditos were stopped. See, the politicians in Denver call her boys’ stand a “food and drink peddler,” and as such, they’re required to get a food and drink sales license from the city and to buy insurance.


Cue the “land of the free” songs.

In all, the outlaws raised $200 dollars before they were shut down. And their glorious “license” would have cost them $150.00. All for the protection of the kids and their slack-jawed, ignorant “customers,” who clearly can’t handle their own decisions and need agents of the state to make them “safe.”

Would it be a stretch to call this kind of government strong-arming a “protection racket”? How far afield is it from a mafia thug approaching a business person and saying, “Heyyyyy… Beautiful thing ya got goin’ here… I’d hate for somethin’ ta… happen to it or your customers. But, listen, pal, if ya pay us, we can insure that won’t be the case.”

Of course, government licensing doesn’t insure safety at all. It is a way for politicians to rake in money and for established businesses to block competition, both of which make prices higher for consumers, and destroy their opportunities to spend their extra money on new products and ventures.

Market competition and liability risks incentivize people entering competitive entrepreneurial fields to offer the best and safest products that consumers might want. Sometimes consumers and the sellers reach high safety points, and at other times, they will reach low thresholds for safety – for things like drinking a glass of lemonade made by kids and their mom.

Would you demand insurance coverage from a neighbor if he handed you a glass of punch on a hot day?

Sadly, when Jennifer Knowles and her boys decided to start a simple lemonade stand, they ran smack into what economists call “rent seeking”, or the practice of certain people to gain wealth not through market processes, but through taking advantage of government rules, making cash not through helping and voluntary exchange, but through harming or blocking someone else.

Someone called the police to complain about Jennifer and her children, and Jennifer, perhaps assuming it was the lemonade competitor, said:

I can understand why someone might get upset, absolutely.

And her note of contrition, though unnecessary, is understandable itself. Heck, that other lemonade vendor had to jump through the government hoops and pay the government protection money, so one can understand why he or she might be frustrated that a lower-priced competitor who didn’t bow to the politicians set up shop not far away.

But isn’t it troubling to see how political forces not only siphon useable capital away from vendors and consumers, but also how political mandates then pit civilians against each other? Competition is a wonderful way for consumers to show what they like best, and for everyone to profit off of peaceful interaction. Yet political mandates like this Denver licensing scheme retard that process and don’t allow for more varieties of choice, then, when an innocent lady and her children offer a choice, the state threatens them with legal action if they don’t cease and desist.

It would be easy to put a happy face on this and hope for a positive outcome, to turn a phrase and say something like, “Hey! When you get lemons, turn them into lemonade!”

But that can’t happen without political approval in Denver, and in many other cities and states in the U.S.

A bitter mix to swallow, certainly, as school ends and summertime approaches.

So, perhaps the only positive one can derive from this is a lesson that will last beyond the time period of government school, a lesson about licensing, and its victims. A lesson in ethics and economics.

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