Earlier this year the Colorado legislature passed House Bill 19-1230 (the “Bill”), which created two new types of marijuana licenses to be issued by the Colorado Department of Revenue Marijuana Enforcement Division (the “MED”). The first is a Marijuana Hospitality Business license (“MHB”), which may be mobile, and which will permit licensees to allow the on-site consumption of marijuana. An MHB licensee will not be permitted to sell marijuana at its premises. The second is a Retail Marijuana Hospitality and Sales Business license (“RMHSB”), which cannot be mobile, but will allow licensees to sell marijuana at its premises and will allow customers to consume retail marijuana and retail marijuana products that were purchased on the premises. These licenses are separate and distinct from any other type of license, meaning that established businesses will not be allowed to permit the consumption of marijuana at their facilities, but they must apply for and obtain an MHB or RMHSB license at a completely separate establishment. The MED may issue licenses as early as January 1, 2020, and both the MHB and RMHSB licenses must be renewed with the MED every year.
The Bill contains some restrictions on the locations of an MHB or RMHSB. First, the local jurisdiction where an MHB or RMHSB may be located must opt-in to allow the operation of such business by implementing its own regulations. It is not yet clear which jurisdictions will permit these new licenses. The City and County of Denver is a likely contender since Denver approved Social Consumption Licenses in 2016. However, the few businesses that have obtained social consumption licenses in Denver will need to apply for one of the new licenses issued by the MED before the end of this year to continue operating. In addition, neither license will be permitted in an establishment that holds an alcohol beverage, fermented malt beverage, or special event liquor permit. However, an existing retail food business may apply for one of the new licenses in an isolated portion of the premises, provided that the licensee does not also hold an alcohol beverage, fermented malt beverage, or special event liquor permit.
Pursuant to the Bill, no consumption of marijuana products may be visible from outside of the establishment. Further, patrons may not smoke tobacco products on the premises of an MHB or RMHSB, and license holders may not permit the use or consumption of marijuana by any patron who displays any signs of intoxication. The Bill also requires that mobile MHB: (i) have surveillance cameras inside their vehicles; (ii) have GPS tracking and route logging in an established route manifest system; (iii) must ensure that activity is not visible outside of the vehicle; and (iv) operate only adequately ventilated vehicles.
The MED will create new rules for licensees and will create and oversee training requirements for employees of new hospitality and social-use businesses. All employees of an MHB or RMHSB must complete an annual responsible vendor training program, and the establishment must educate consumers by providing informational materials regarding the safe consumption of marijuana. A rulemaking workgroup meeting was held on August 8, 2019, in which the proposed rules to implement the Bill were discussed in some detail. The MED may hold another rulemaking meeting, and the proposed rules are subject to change.
A public hearing regarding the permanent rules for these licenses is scheduled on October 15, 2019, at 9:00 a.m. The public hearing will be held at the MED’s offices located at 1707 Cole Blvd., Suite 300, Red Rocks Room, Lakewood, CO 80401. The Rodman Law Group will continue monitoring these new licenses as the rules and processes develop. If you have any questions, please do not hesitate to contact us.