Denver Moves to Limit Cannabis Licenses

sean mcallister
McAllister Law Office, P.C. attorney Sean McAllister explains today’s negative decision

The Denver City Council met again last night to discuss the future of marijuana in Denver. Councilwoman Robin Kniech’s proposal, including a few amendments, passed its first reading last night with an 8-3 vote with one abstention. The second reading is scheduled for April 25. If passed, the bill will be effective May 1. Her proposal is nearly identical to the one that was discussed for 5 hours last Monday. Please see this link for a synopsis of last night’s meeting:

Below are the pertinent points of the Bill and its amendments:

1. There will be caps on distinct locations for marijuana stores and grows taking into account the current number of distinct locations plus pending applications. A distinct location means a “particular parcel of land that is identified by a distinct street address assigned by the city.” Notably, an address that has different units, suites, or room, is still considered one distinct location, regardless of how many licenses might exist on that parcel of land.

2. Once the caps are met, there will be an open lottery system to determine if and when new licenses can be obtained. For the foreseeable future, every time that two licenses surrender or go out of business, one new license will be able to be applied for.

3. New Optional Premises Cultivation Licenses, new Retail Marijuana Cultivation Facility Licenses, and grow licenses that change location after May 1 will be subject to 1,000 foot setbacks from any school or residential district. The language of this Section appears to allow conversion or combined use of existing medical licenses without imposing this 1,000 foot setback. This 1,000 foot setback will effectively reduce the number of viable locations for grow facilities by approximately 70%.

4. A business seeking to change location of a store that is co-located with a grow may not change location of the store without also changing the location of any associated license, or surrendering the associated licenses that the former location. At the same time, a business seeking to relocate a grow must also relocate the associated store. The word associated is not defined, but it’s a safe bet to assume that if you want to change location of one license, you should be prepared to change location of all licenses that are co-located.

5. The pending applications will continue to move forward. The pending applications include any application submitted for a new license or a change of location prior to May 1, 2016.

6. There will be restrictions on moving licenses into saturated neighborhoods, including Globeville, Elyria-Swansea, and Montbello.

7. There is an amendment (attached above) which requires new applicants for any local license to include with their application materials a community engagement plan. Such a plan should include information about registered neighborhood organizations, an outreach plan, a detailed description of any plan to create positive impacts in the neighborhood where the license is to be located, written policies to address complaints by residents in the neighborhood, and written policies designed to promote and encourage community outreach and activism.

This bill is not particularly friendly to the industry, and it imposes some very serious restrictions. MIP’s do not appear to be affected by this bill.

Sean McAllister is a leading marijuana industry attorney in Colorado. Mr. McAllister helped draft Amendment 64 and he has represented hundreds of dispensaries and marijuana companies since 2009. McAllister Law Office represents some of the leading marijuana companies in Colorado and is a full service business law firm for the marijuana industry.

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Published by NCV Newswire
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