Earlier this year the City of Denver Department of Excise and Licenses created the Marijuana Licensing Work Group (the “MLWG”). This week the MLWG released draft legislation regarding a continued license cap, licensing categories, and Social Equity Applicants. If passed the legislation would have some noteworthy impacts.
- The draft bill would extend the current licensing cap that was enacted in 2016 until July 1, 2027 and include additional license categories with some limited exceptions. The revised moratorium creates an exception that would reserve new licenses in most categories, including stores and cultivations, for Social Equity Applicants until 2027.
- A Social Equity Applicant under the draft legislation must be a person or business that is at least fifty-one percent (51%) owned by individuals that:
- are a Colorado resident;
- Have not been the beneficial owner of a revoked marijuana business license that can demonstrate one of the below criteria:
- The applicant has resided for at least fifteen (15) years between the 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 disproportionately 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
- The applicant’s household income in the year prior to application did not exceed an amount determined by the state licensing authority.
- One specific privilege that would be reserved for Social Equity Applicants until 2024 would be medical and retail marijuana delivery. The draft ordinance authorizes delivery permits for licensed transporters, medical marijuana centers and retail stores. However, prior to July 1, 2024, only medical or retail transporters that also qualify as social equity applicants may participate in delivery. On or after July 1, 2024, medical or retail marijuana transporters as well as medical and retail marijuana stores holding a valid license and a delivery permit issued by the City of Denver may also conduct deliveries.
- All licensees will need to develop a social impact plan that will be publicly available.
- The draft bill to enact the Marijuana Hospitality Program would allow marijuana hospitality licenses to be available starting July 2021 for both social equity and non-social equity applicants. Hospitality businesses would be permitted to sell medical and retail marijuana as well as marijuana products while permitting on-site consumption. The consumption of alcohol and tobacco on the licensed premises would be prohibited. Medical hospitality licenses would be permitted to operate from both fixed and mobile locations. Simultaneously, the previous Cannabis Consumption Pilot Program will be repealed. Current consumption licensees would be issued hospitality licenses.
- Under the proposed legislation, while completing a change of location a licensee may operate at both the new location and former location if the licensee holds a permit from the state licensing authority.
The MLWG is accepting comments on the draft legislation through January 4, 2021 and will be holding shareholder feedback sessions on Tuesday, December 15, 2020 from 2-4 pm and on Thursday, December 17, 2020 from 9-11:30 am. If you would like more information on how this legislation impacts your business or on submitting comments contact Steve Levine, Alyssa Samuel, or your Husch Blackwell attorney.