House Bill 19-1234 and House Bill 19-1230 were signed into law on May 29, 2019, allowing for marijuana delivery and marijuana hospitality licenses, no one thought it would take two years to implement. Of course, no one could have predicted a deadly pandemic bringing the world to a halt, but now, on the eve of 4/20/2021, the City and County of Denver is poised to sign three ordinances into law to finally allow for medical and recreational marijuana delivery and authorize marijuana hospitality licenses, among other changes. Below is a summary of each proposed bill and a brief analysis of what to expect if and when Mayor Hancock signs them into law April 20, 2021.
Read on for the full story, or click below to quickly jump to the relevant ordinances.
Ordinance Repealing the Cannabis Consumption Pilot Program
In November 2016, Denver voters approved
Initiative 300 (“I-300”) to give businesses the ability to apply for a license to allow for adult marijuana consumption in designated areas. Although I-300 was undoubtedly a milestone for cannabis normalization, because of the restrictive nature of the bill, no more than a handful of businesses were granted a Denver consumption license. With the passage of House Bill 19-1230 allowing for state-licensed hospitality licenses, Denver needed to modify its marijuana consumption program to comply with the new state law. The above bill repeals I-300 in its entirety and below is a summary of the ordinance set to replace it.
Ordinance to Allow for the Licensing and Operation of Marijuana Hospitality Businesses and Retail Marijuana Hospitality and Sales Businesses
Beginning July 1, 2021, Denver may issue two general categories of hospitality businesses: (i) Marijuana Hospitality Business Licensees; and (ii) Retail Marijuana Hospitality and Sales Businesses. Each is discussed below.
Marijuana Hospitality Business Licenses.
This category of licenses allows for marijuana consumption only at either a fixed location or mobile premises. Both fixed location and mobile premises have similar licensing requirements such as: (1) not permitting consumption between the hours of 2:00 a.m. and 7:00 a.m.; (2) not transferring marijuana with or without remuneration (payment); (3) not engaging in activities that would require an additional marijuana licenses (i.e. cultivation, manufacturing, storage, etc.); (4) not allowing consumption outside the designated consumption area; (5) allowing smoking in indoor and outdoor portions of the licensed premises , so long as occurring in compliance with an approved Odor Plan; (6) ensure that all areas of ingress and egress to the consumption areas are clearly identified with signs and warnings; (7) not allowing for on-duty employees to consume marijuana; (8) not allowing alcohol or tobacco consumption; (9) not allowing any person under the age of 21 on, or in, the licenses premises; (10) not allowing the consumption of marijuana by a patron who displays “any visible signs of intoxication”; and (11) ensuring that business activities cease in the event an emergency requires law enforcement, firefighters, emergency medical service, or other public safety personnel to enter the hospitality business.
In addition to the above general licensing requirements, mobile premises shall: (1) not permit consumption if the mobile premises is stopped, standing, or parked for more than 30 minutes; (2) file a route log with the Department of Excise & Licenses identifying the origin and destination of all routes, including all stops, at least 7 business days prior to the scheduled departure; (3) not deviate from the route log without notifying the Department of Excise &Licenses at least 7 business days prior to the scheduled departure; (4) not allow origins, stops, or destinations at schools, child care establishments, alcohol or drug treatment centers, or city-owned recreation centers and pools; (5) make the route log available to any city inspector or officer upon request; and (6) ensure that the motor vehicle has no external markings, words, or symbols that constitute advertising.
Although there are additional licensing requirements for mobile consumption licenses, only fixed location hospitality license are subject to location restrictions and require a public hearing. Fixed location marijuana hospitality business licenses may not be issued if the proposed location is within 1,000 feet of any school, child care establishment, other marijuana hospitality businesses, alcohol or drug treatment facilities, and city-owned recreation centers and pools, with the distance computed by direct measurement in a straight line to the “nearest external portion of the building in which the marijuana hospitality business is proposed to be located.” Moreover, fixed location marijuana hospitality licenses shall not be issued at the licensed premises of any medical or retail marijuana business, the licensed premises of any business licensed to serve or manufacture alcohol, any location deemed public property and owned by the City, and residential-zoned districts.
Retail Marijuana Hospitality and Sales Businesses.
Unlike pure hospitality licenses, retail marijuana hospitality and sales businesses may only be licensed at a fixed location and are authorized to transfer limited marijuana to consumers. In addition to the general licensing requirements for fixed location marijuana hospitality licenses discussed above, retail marijuana hospitality and sales businesses have additional licensing requirements given the ability to conduct limited retail sales. Specifically, pursuant to state regulations, retail marijuana hospitality and sales businesses may not sell: (1) more than two grams of flower; (2) more than one-half of one gram of concentrate; or (3) a retail marijuana product containing more than 20 mgs of active THC, but if containing more than 10 mgs of active THC, it must be transferred to the consumer in separate serving sizes of no more than 10 mgs of active THC per serving. Moreover, starting January 1, 2022, retail marijuana hospitality and sales business will be required to install and use a safe in a limited access area to be “incorporated into the building structure or securely attached” for overnight storage.
Again similar to fixed location marijuana hospitality licenses, a public hearing is required to license retail marijuana hospitality and sales businesses and these business have nearly identical location restrictions to fixed location marijuana licenses. However, retail marijuana hospitality and sales businesses may not be issued if the proposed location is within 1,000 feet of any other “retail marijuana hospitality and sales business.” Pursuant to this language, marijuana hospitality business licenses may be located within 1,000 feet from retail marijuana hospitality and sales business.
Ordinance – Omnibus Bill
As outlined on
Denvergov.org, the above Omnibus bill covers 3 main topics: (i) Social Equity; (ii) Marijuana Delivery Permits; and (iii) Existing License Changes. The most immediate changes are summarized below.
The omnibus bill defines a social equity applicant as: “a person applying for a new marijuana business license, or being transferred a marijuana business license, who is or has one or more beneficial owners who hold, or collectively hold, an ownership percentage of at least fifty-one percent, each of whom satisfy the following criteria:
Is a Colorado resident;
Has not been the beneficial owner of a license subject to disciplinary or legal action from the state licensing authority or the department resulting in the revocation of any marijuana business license issued by the department or the state licensing authority;
Has demonstrated at least one of the following:
The applicant has resided for at least fifteen (15) years between the 33 years 1980 and 2010 in a census tract designated by the Colorado Office of Economic Development and International Trade as an opportunity zone or designated by the state licensing authority as a disproportionate impacted area;
The applicant or the applicant’s parent, legal guardian, sibling, spouse, child, or minor in their guardianship was arrested for a marijuana offense, convicted of a marijuana offense, or was subject to civil asset forfeiture related to a marijuana investigation; or
iii. The applicant’s household income in the year prior to application did not exceed an amount determined by the state licensing authority rule governing social equity license qualifications.”
Denver’s moratorium on licensing new medical marijuana stores and medical marijuana cultivation facilities will continue in effect upon signing of the omnibus bill. However, the bill reserves new applications for “new medical marijuana products manufacturer, medical marijuana transporter, and
from social equity applicants” until July 1, 2027, with certain limited exceptions. Pursuant to the final language of the proposed bill, Denver may accept applications from non-social equity applicants only if an applicant is applying for a medical or retail testing facility or research and development license, or is applying for a retail marijuana business license that will be “co-located with a medical marijuana business of the same type…” retail marijuana business licenses
Marijuana Delivery Permits
Beginning July 1, 2021, local marijuana delivery permits may be issued to medical or retail marijuana stores, or medical or retail marijuana transporters to deliver marijuana to private residences of consumers and patients. Prior to July 1, 2024, however, only medical or retail transporters who qualify as social equity applicants may perform the act of delivery to consumers and patients. On and After July 1, 2024, all medical and retail marijuana transporters and medical and retail marijuana stores holding valid delivery permits may begin to directly deliver to consumers and patients. Delivery by Denver Marijuana Delivery Permit holders may not deliver between the hours of 12:00 a.m. and 8:00 a.m., must use an electronic ID scanner at the point of transfer, and shall not deliver more marijuana to a person than the amounts authorized under law. Unlike the state regulations allowing enclosed delivery motor vehicles to contain up to $10,000.00 in retail value of regulated marijuana, Denver’s omnibus bill limits enclosed delivery motor vehicles to no more “than $5,000.00 in retail value of cannabis.”
The most pressing change to existing licenses is the immediate impact on license renewals requiring submission of a “Social Impact Plan” (“SIP”) to be made publically available. If this omnibus bill is signed into law by Denver’s Mayor on 4/20/2021 as predicted,
(including medical marijuana business licensees) will be required to submit a Social Impact Plan with their next renewal application. That being said, renewal applications submitted after 4:00 p.m., April 19, 2021, will likely require submission of an SIP to be deemed complete. Incomplete applications may be rejected and require re-submission. all licensees
In addition to the above SIP requirement, beginning January 1, 2022, medical and retail stores are required to install a safe in a limited access area to be “incorporated into the building structure or securely attached” for overnight storage. For marijuana-infused products that must be kept refrigerated or frozen, the establishment may lock the refrigerated container… so long as the appliance is affixed to the building structure. Alternatively, a business may utilize security devises such as vaults, strong rooms or other security features that are functionally equivalent to a safe…”
With all of these changes set to go into effect on 4/20/2021, our Denver office stands committed to assisting all those affected by the above ordinances. If you need assistance drafting an SIP, have any questions surrounding how the above ordinances will impact you or your marijuana business, please contact us
here. We look forward to hearing from you soon.
By: Nabil Rodriguez, Associate*
*The blog author is no longer with Greenspoon Marder LLP.