A wave of cannabis legislation creates new business opportunities in Colorado
May 30, 2019
Kristen Morris, Associate
For Colorado consumers that have wondered if they’ll ever be able to get their marijuana delivered, the time has come. And change is now in sight for local businesses that have been closed off from investment from publicly traded companies. Yesterday, Governor Jared Polis of Colorado signed six cannabis-related bills into law that will transform the state’s cannabis industry once again. Here are the highlights:
House Bill 19-1230 authorizes legal cannabis hospitality establishments where patrons can bring their own cannabis to be consumed onsite. It also authorizes retail marijuana stores to have a consumption area within its premises, and for retail food establishments to permit marijuana consumption in isolated portions of their premises. The state may begin issuing licenses for these activities starting January 2, 2020.
House Bill 19-1234 creates marijuana delivery permits for licensed medical marijuana centers, retail marijuana stores, and transporters that allow the delivery of marijuana and marijuana products to customers. Medical marijuana delivery permitting begins January 2, 2020, and retail marijuana and transporter delivery permitting begins January 2, 2021.
House Bill 19-1090 dramatically alters the rules on marijuana business ownership and investment, which has been limited to private companies of 15 or less owners and required a lengthy suitability process for applicants regardless of their percentage ownership or control. Now, publicly traded corporations will be eligible to hold a marijuana license. The cap on how many owners a marijuana business may have is removed, and “passive” owners that are not an affiliate of the marijuana business, have no control over the marijuana business, and own less than 10% of the interest or securities in the business will not be required to pass the stringent background check (with some exceptions). This Act will apply to applications made on or after November 1, 2019.
House Bill 19-1311, regarding the Institute of Cannabis Research at Colorado State University-Pueblo which was established in June 2016, acts to provide a governing board, permit revenue allocations, gifts, grants, and donations, and redefines the role and mission of the program. The role and mission of the Institute is to conduct research related to cannabis, including clinical research and studies, the efficacies of medical marijuana, biotechnologies, and economic development, and to publicly disseminate the results of the research.
Senate Bills 224 and 218 are the “sunset bills” that operate to streamline numerous aspects of the current retail and medical marijuana codes and merge them into a single code. Notably, a person previously prohibited from owning a marijuana business because of a felony conviction (discharge of a sentence within the past ten years for a drug felony and within the past five years for all other types of felonies) will now be permitted to apply for ownership if the conviction was more than three years ago and is no longer serving a sentence.
These new laws will be fleshed out during the rulemaking sessions over the next several months.
If you have questions about the new laws and how they will impact you or your business, please contact a Greenspoon Marder attorney.
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