Denver Businesses Can Now Apply for Social Consumption Permits

Social marijuana consumption areas could open in Denver before 2018.
Social marijuana consumption areas could open in Denver before 2018. Ken Hamblin
More than nine months after being approved by voters, Denver's social marijuana consumption initiative is finally ready to take off. As of August 24, the City of Denver is accepting applications from businesses interested in pursuing a social consumption area, setting the stage for some of Colorado's first pot-infused arcades, cafes and yoga studios.

Denver voters approved Initiative 300, a measure to allow social consumption areas, in November; the initiative called for the city to establish a three-year pilot program to be reviewed by Denver City Council in 2020. To create the project, the city pulled together a Social Consumption Advisory Committee made up of initiative supporters, opponents, business owners and neighborhood leaders, which met six times before the final draft of rules was presented to the public in June.

Since then, however, drafters and proponents of I-300 have been vocal with their unhappiness over some rules that they say do not reflect the intent of the initiative, and recently threatened to sue the city if less restrictive rules aren't put in place.

Despite the threat, the city has moved forward with the process, expecting social consumption applicants to begin submitting paperwork as early as this week. Dan Rowland, director of public affairs for the Denver Department of Excise and Licenses, says he believes it will take a few months, at the minimum, for applying businesses to get approval. "It's hard to put a time on it," he adds. "There's a whole quality-control aspect we have to look at, then we have to schedule a public hearing and do inspections, like any other business needs."

In the meantime, I-300 drafters Emmett Reistroffer and Kayvan Khalatbari continue to be critical of the finalized rules, saying that the city is treating social pot consumption unfairly compared to how it treats drinking establishments. They say that legal action against the city is likely, and that they plan to launch a new, separate pot consumption initiative that they believe will better reflect what voters intended.

"Nothing has changed," Khalatbari says of a potential lawsuit. "All of my comments about this inequality between how they're treating alcohol and cannabis are the same. We've even had a lot of conversations with the mayor's office since then, and they continue to say there was consensus, and that's bullshit."

And supporters of I-300 are planning more than just a lawsuit, he says: "We're also going to be pushing some citizen-protest initiatives in public spaces and will continue to hound their office with CORA requests. We're going to get to the bottom of this."

Khalatbari and Reistroffer's complaints largely center on the city's distance requirements, which they say have so severely limited the number of qualified businesses that the implementation of the initiative is "destined to be a bust," Khalatbari says. Currently, the rules require a 1,000-foot buffer between a social-consumption area and any school, child-care establishment, drug or treatment facility, city park, pool or recreation center.

Reistroffer, who was on the Social Consumption Advisory Committee, sent an email to fellow committee members shortly after the application process was announced by the city, reiterating his issues with the restrictions. "Now the pilot program is set up to fail, because there is such little space available in Denver where permits are eligible and none of the original businesses that supported our campaign are able to apply," his email reads. "This means the issue of private consumption clubs and events will continue to proliferate throughout the city without any oversight from the city or feedback from neighbors — and public consumption will continue to occur in public places like parks and sidewalks because there will be no safe access to permitted consumption areas."

Although the city doesn't currently allow marijuana consumption at public events, businesses can now apply for temporary special-event permits for consumption areas – but they must pass the same location requirements as full-time applicants face. However, the private events that Reistroffer mentions in his email have been going on since recreational marijuana was legalized in Colorado in 2012. By holding the events at a private location or residence, only allowing members or invitees 21 and over inside, and not advertising the location as a regular cannabis consumption lounge, many of these events are technically legal – but that hasn't stopped undercover police officers from crashing the party if the city thinks otherwise.

Denver city officials have remained steadfast in their approach to implementing the pilot program. When she announced the beginning of the application process, Excise and Licenses Executive Director Ashley Kilroy said that her department was pleased with the rules and excited to see what businesses apply for a social consumption permit.

Khalatbari says that most of the businesses that worked with his team to gain voter approval of I-300 in 2016 aren't eligible under the current rules, or don't believe that applying is worth it financially because of the restrictions. "Pretty much everybody that we've talked to that was excited about this is either precluded to do so because of distance requirements, or they have zero desire because of other silliness put into these rules," he says, explaining that many of the business owners and organizers he knows are leaning toward setting up private clubs and events spaces that would be outside of the city and thus unregulated.

In an interview earlier this month with Westword, City, O' City owner and committee member Dan Landes said he didn't think many businesses would see a financial incentive in applying for a social consumption area. On a Facebook post shared with the public shortly after the application process was announced, Landes blasted the final rules, saying there were "prohibitionists on the committee." The full statement:

Over the past year I sat on the advisory committee for the city of Denver to institute Initiative 300, which was passed by the Denver voter in order to create public consumption areas within the city limits. On the committee I represented business interests. I was motivated to participate in this civic action because I believe fully in hospitality. I felt Denver was being a bit of a hustler by inviting people into our city, selling them a legal product and then not providing a place for them to consume it legally. That is inhospitable and greedy. I also believed the educated Denver folks who voted for this initiative because they saw a need to provide safe and controlled areas of consumption. It was the committee's job to institute the will of the voter, not debate the merits of marijuana consumption. As I sat in these meetings I realized there were, honest to god, prohibitionists on the committee. They were there to create such legislative obstacles that obtaining a permit for social consumption was so prohibitive that it wasn't possible, or desirable. On the committee were also pro-pot activists that wanted to provide a way for Denver to remain a pot friendly city and keep regulations to a minimum thus allowing for the will of the voter to be instituted. As the process continued I couldn't quite grasp what the debate was about. Pot is here, it's legal. A whole lot of people smoke it. The citizens of Denver voted YES on Initiative 300. The city banks millions of tax dollars because of it. The industry is a major employer. I haven't seen a significant downside to legal weed. So now you can apply for a social consumption permit. I hope some smart entrepreneur figures out a way to create a hospitable environment for guests and residents of our city to consume and make a little money doing it.

It sounds like Landes might get his wish. Denver business licensing consultant Logan Goolsby says he represents two clients interested in applying, but they must first find properties that meet the location requirements and get approved by the surrounding communities. Although he wouldn't disclose the identity of his clients, Goolsby says they have hopes of opening an arcade or cafe with social consumption areas. "They're coming in with optimism, and hope the rules are fair and interpreted as such," he says. "We want them to meet the community desires, both those who voted for it and those who had concerns."

Several dispensaries interested in opening lounges with social consumption areas next to their stores have reached out to the city, Rowland says. (None of them have yet responded to Westword's inquiries.) "I think we're going to see more than one storefront either open something next door or close by," he adds."They obviously can't do it in their store, but there's nothing that says they can't do it next door."

If they fit the other location requirements, that is.
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Thomas Mitchell has written about all things cannabis for Westword since 2014, covering sports, real estate and general news along the way for publications such as the Arizona Republic, Inman and Fox Sports. He's currently the cannabis editor for
Contact: Thomas Mitchell

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