Background
Since Colorado voters passed Amendment 20 in 2000, numerous medical marijuana businesses have developed in Denver. Both the City and State of Colorado have passed several ordinances and statutes designed to balance the rights of these businesses with neighborhood concerns. Denver passed its original licensure ordinance to regulate medical marijuana retail dispensaries in January 2010. Prior to this ordinance, the hundreds of medical marijuana dispensaries that had sprung up were not specifically regulated. The Colorado General Assembly passed H.B. 1284 later in that same year--prompting Denver to revise its original licensure bill to comply with provisions related to retail sales operations (dispensaries/centers) and to add two other categories of licensed medical marijuana businesses—grow operations and infused product manufacturers. This ordinance was passed February 2011.
Most recently, the Colorado legislature passed revisions to the state law. Most of these were “clean up” measures which do not necessarily conflict with local law. The state law did extend the moratorium on licensure of new medical marijuana business startups through July 1, 2012, giving the state and city more time to implement the new dual state/local licensing system envisioned by the state Legislature. The Legislature also removed the confidentiality provisions related to cultivation operations and, in fact, required public posting of notices at locations seeking approval as grow operations.
Licensure provisions on both the state and local level have evolved over time, with transitional requirements and deadlines for existing businesses to continue their operations. That is, businesses that are currently operating must have met certain deadlines and criteria to stay in business during the current transitional moratorium stage. The local licensing authority-the Department of Excise and License—is the expert on whether any given location is operating within the confines of existing law. Neighborhood groups should work with their City Council representatives if there are questions about legal requirements and whether medical marijuana businesses are operating legally.
This document summarizes select provisions of Chapter 24, Articles XI-XII of the Denver Revised Municipal Code (DRMC) which contains the local licensing requirements for retail centers, infused product (such as tinctures and food containing medicinal marijuana) manufacturers, and grow operations. It also covers separately-codified notification requirements (Chapter 12, Article III DRMC) and a few state provisions that may be of interest to neighborhood groups. Medical marijuana businesses must also meet all other state requirements in the Colorado Medical Marijuana Code and local building, zoning, tax, and safety regulations related to their type of business. Further, when there is a conflict between state and local law, the local ordinance specifies that the stricter regulation applies in most cases. (Note: Separate local legislation outlines the circumstances under which individuals with state-issued medical marijuana cards may grow up to 12 plants in their homes as well as the limits set for caregivers of six or fewer patients.)
Neighborhood Notification
For all three types of medical marijuana businesses or license applicants, Excise and License must notify registered neighborhood organizations (RNOs) within 200 feet of the locale under the following circumstances: new applications, and/or major modifications to premises and/or transfer of medical marijuana center, medical marijuana optional premises cultivation or medical marijuana infused products manufacturing license; or any action for which a public hearing is required by state or city medical marijuana licensing laws. Similar to the requirements for other RNO notices, it is required within 10 days after the agency gets the appropriate paperwork. There are additional notice requirements for certain grow operations, see later section on Optional premises cultivation license, but they do not affect District 10 since these operations cannot be licensed in District 10.
Medical Marijuana Dispensaries/Centers
Transition Period
Currently, persons operating a medical marijuana dispensary/center in Denver must be licensed by the City. A new state/local system is slated to begin July 1, 2012 and new businesses are barred from applying for licensure during the interim. Some businesses that were operating before passage of the new state law can continue their business while the new procedures are being put in place provided that they met certain specified deadlines and requirements. For example, centers must have applied for local licensure by July 1, 2010, for state licensure by August 1, 2010, and met state requirements to account for the cultivation of at least 70% of their product by September 1, 2010. During this transitional period, grandfathered businesses must continue to meet the existing state and local requirements.
New Dual Licensure
Locational Restrictions
By at least July 2012, the new state/local system takes effect and both grandfathered and prospective medical marijuana business applicants will need to comply with its provisions. As part of this new process, applications must be submitted on state forms with maps indicating land uses within a 1,000 foot radius of the proposed business site. Currently in Denver, medical marijuana centers are prohibited from locating in residential zones and certain retail areas embedded near residential areas (i.e. those zoned MS-2, MS-2x, MX-2, MX2a or MX-2x) with some exceptions for previously-licensed businesses (those whose licenses were approved before July 1, 2010). Additionally, centers cannot locate within 1,000 feet of any school, child care establishment, or alcohol or drug treatment facility, as these entities are defined, or within the same distance from one another. Again, there are some exceptions from distance requirements for centers who were licensed under previous provisions.
Owner Employee Qualifications
The new state/local licensing system requires background checks of applicants for medical marijuana licensure as well as a determination of their good moral character. All officers, managers, employees, and persons with a financial interest in the business are subject to fingerprint-based criminal history checks as well. Officers, managers, and employees must also be Colorado residents. Limits are placed on licensure for applicants and owners with recent felony convictions or sentences and those with any history of felonies involving controlled substances.
License renewals & transfers
Licenses are generally transferable if the new owner/entity meets licensure requirements and must be renewed every two years. A hearing on a renewal application may be scheduled if there are complaints against the business, if it has a history of violations, or for “good cause”. Either the state or local licensing authority can revoke a license for a location that has been inactive, without good cause, for one year.
Misc Provisions Affecting Neighborhood Quality of Life
Centers are barred from operating between the hours of 7:00 pm and 8:00 am by state law. They must comply with local sign laws and are prohibited from deceptive advertising and that appealing to minors. The state requires centers to be affiliated with grow operations and vice versa in an effort to control the source of the marijuana. Consequently, centers must be able to account for at least 70% of their product via association with a separately licensed grow operation. Denver law requires security measures with the capacity to monitor centers 24 hours per day including the use of security cameras and an alarm system. Centers may not deliver medical marijuana to their patients and all transactions between the center and their patients must occur on the licensed premises. (Caregivers serving small numbers of patients as defined can purchase medical marijuana at a center for dissemination to their own card-carrying patients.) Consumption of medical marijuana is prohibited on the premises and centers generally cannot have more than 6 plants and 2 ounces of marijuana per patient.
Licensing Authority
The licensing authority at the state level is the Department of Revenue and at the local level the Department of Excise and License. No public hearing is required to obtain a license and the state and local authorities make the decision based on whether applicants meet state and local requirements.
Infused Product Manufacturing License
Applicants must meet state and local laws related to the business including the Colorado Medical Marijuana Code requirements for background checks, determination of character, and sanitation and labeling. In addition, the City requires that the businesses locate only where there is zoning appropriate for “food preparation and sales” or “manufacturing, fabrication and assembly”. Generally, in District 10, infused product manufacturing could be located in the commercial areas along Colfax, the smaller commercial areas embedded in residential (as long as the business is 500 feet from a residential zone), eastern sections of Capitol Hill, around the downtown portion of the District, and Cherry Creek mall.
Optional premises cultivation license*
Applicants must meet state and local laws related to the business including the Colorado Medical Marijuana Code requirements for background checks and character. In addition, the City limits the location of medical marijuana cultivation businesses to zone districts where plant husbandry is permitted under the zoning code. Limited exceptions are provided for cultivation operations which predate the City licensure law. To attain grandfather status, an applicant must have applied for a plant husbandry zoning permit before July 1, 2010 and for state licensing by August 1, 2010, as well as, proving that the cultivation of medical marijuana began before January 1, 2011. In addition, the license of the grandfathered operation is subject to a public hearing at the time of license renewal, or every two years. At this time, a hearing officer could refuse renewal if a preponderance of the evidence indicates that the grow operation has resulted in specified negative impacts, such as increased crime rates in the surrounding neighborhood. The City Council member from the area and registered neighborhood groups must be notified of the hearing at least 10 days in advance. Grandfathered operations are also limited in their ability to transfer ownership to a greater degree than other medical marijuana businesses and the state limits the number of plants to no more than 500 unless a waiver of this provision is obtained.