So You Want to Grow Your Business in Colorado… 4 Things to Be Mindful of When Getting Started.

Cannabis Culture

Twenty states and the District of Columbia now have laws legalizing marijuana in some form.  While many states have passed legislation permitting the sale and possession of marijuana for medicinal purposes, the pioneers of the marijuana movement: Colorado and Washington, also have laws permitting the sale, purchase and possession of recreational marijuana.  Marijuana is sweeping across the United States and voters are making themselves heard.  Just recently, voters in Portland, Maine overwhelmingly backed a municipal measure eradicating local penalties for the possession of marijuana by adults.  In Portland, adults can now possess up to 2.5 ounces of cannabis or cannabis paraphernalia within city limits without facing criminal penalties.  Similarly, voters in three cities in Michigan (Lansing, Jackson and Ferndale) voted in favor of legislation decriminalizing adult possession of marijuana: those over the age of 21 may now lawfully possess an ounce of marijuana on private property.

Law changes driven by a shift in public opinion in favor of legalization, as well as the position the federal government recently announced with respect to enforcement of the Controlled Substances Act, has spurred a new breed of entrepreneurs hoping to flourish in this budding industry.

If you intend to grow your business in Colorado, here are four things (and not an exhaustive list) to be mindful of when embarking upon your new venture.

4 Things You Should Be Mindful of to Grow Your Business in Colorado

1. Only Colorado Residents Need Apply.

While Amendment 64 captured the nation’s attention (and particularly that of global investors) only Colorado residents who are 21 years of age and older may own and operate retail marijuana establishments (this includes retail marijuana stores; retail marijuana cultivation facilities; retail marijuana products manufacturers; and retail marijuana testing facilities).  Owners must be Colorado residents for a minimum of 2 years prior to applying for a license and must pass a fingerprint based criminal history background check.  In addition, only Colorado residents may be officers, managers, and employees of marijuana establishments. 

2. Location, Location, Location.

All licenses require approval from both state and local governments.  If an applicant receives state approval but does not receive local jurisdiction approval within one year from the date of state licensing approval, the state license will expire and will not be renewed.

Despite the passage of Amendment 64, several cities and towns throughout the State of Colorado have either banned recreational sales of marijuana, or imposed moratoriums.  Given this, it is important that a burgeoning entrepreneur check with his/her selected jurisdiction to see if and when they can apply for a license(s) and the type of license(s) permitted in that jurisdiction.  Below is a brief summary (and not an exhaustive list) of localities across Colorado that have banned the sale of recreational marijuana and those cities and towns that have moratoriums.  This list and the dates below may change at any time.

A.  Cities/Towns That Have Bans

  • Colorado Springs (allegedly a Colorado Springs citizens group “Every Vote Counts” intends to push for a citizen’s   initiative   on the November 2014 ballot overturning the ban).
  • Thornton
  • Westminster
  • Centennial
  • Breckenridge (no new medical or retail marijuana shops in downtown overlay district).

B.  Moratoriums on Retail Marijuana Sales

  • Avon – September 2014
  • Arvada – March 31, 2014
  • Fort Collins – March 13, 2014
  • Glenwood Springs
  • Palisade – January 2014
  • Dillon – October 2014
  • Aurora – May 2014 (will revisit issue)
  • Lakewood – January 2014
  • Lafayette – March 2014
  • Erie – December 2014
  • Pueblo – March 31, 2014
  • Lyons
  • Longmont
  • Broomfield
  • Littleton
  • Wheat Ridge

Currently, only Denver is accepting applications for retail marijuana license(s), and only those existing medical marijuana licensees (or those who had a pending application with the state licensing authority prior to December 10, 2012 that paid all licensing fees and have not yet been approved) may apply for a retail license(s).  Denver began accepting applications in October of 2013 and held its first public hearing last week.  Until January 1, 2016 only current, licensed MMJ businesses may apply for retail marijuana license(s).

Unincorporated Boulder will begin accepting applications for recreational marijuana license(s) from those existing medical marijuana businesses on December 9, 2013, and may issue license(s) to new recreational marijuana business applicants beginning January 2015.

3. The Clock is Ticking.

New applicants for a state issued retail marijuana license(s) can submit a Notice of Intent to Apply for Licensure beginning January 1, 2014, and can submit an application for state retail marijuana license(s) beginning July 1, 2014.  Any state license issued based on a July 2014 application is not effective until October 1, 2014.

4.  Your Application for a License Needs to Be Done Right the First Time.

MED requires that all applications be submitted upon current forms prescribed by MED.  The MED  also requires that applications be complete.  If MED determines that your application is incomplete, they may refuse to accept it. MED requires that all attachments or supplemental information required by MED forms be submitted at the time of application.  MED also requires payment in full for the entire application and license fees (application fees begin at $500.00 and licensing fees range from a few thousand dollars upwards to $14,000, contingent upon type of application).  Applicants must also procure a Colorado corporate surety bond in the amount of $5,000.00.

Upon review of your application, MED may determine it requires additional information to investigate and process your request.  You must comply with MED’s request within the applicable deadline prescribed by MED (7 days from the date of the request, unless otherwise specified by the MED).  Failure to meet the deadline may be grounds for DENIAL of the application.

WANT TO KNOW MORE ABOUT AMENDMENT 64? 

Give us a call at 720-789-7456.  The regulatory scheme is complex.  Let us help you navigate the legal landscape.

DISCLAIMER: Under federal law, it remains illegal to sell, cultivate and possess marijuana.  

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DISCLAIMER:  The content within this site is provided for informational purposes ONLY and it does not constitute legal advice or legal opinions.  Further, receipt of, viewing, and/or interacting with the contents of this site does not create an attorney-client relationship.  Online readers should seek professional advice before acting upon information contained herein.  This site is not intended for advertisement purposes nor is it intended for the purposes of soliciting legal services.

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