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Marijuana: Unanswered questions in final Denver retail pot rules

For months, we've been following Denver City Council's efforts to write and pass rules for the retail marijuana industry.

This task was finally accomplished at Monday evening's council meeting (see what we believe to be the final document below), and a pot-biz spokesman is pleased by the results. But attorney Warren Edson, who's been acting as our guide through this process, says some major questions remain unanswered.

The major elements of the ordinance were essentially unaltered at the council's Monday get-together. The application process starts October 1, just twelve days from now, with existing medical marijuana businesses having the field to themselves until January 2016 -- although they will have to take part in public meetings before winning city approval. Moreover, retail and medical centers can share the same space without any physical separation between them.

The results thrilled Michael Elliott, executive director of the Medical Marijuana Industry Group, who released the following statement:

We believe that the Denver ordinance treats the industry fairly, promotes public safety, and respects the wishes of the voters.

We thank the city council members for their dedication and thoughtful consideration of all the issues.

As a new industry, we recognize and accept the responsibility to ensure responsible use by adults and to keep this product away from minors.

We look forward to continuing to work with the city to meet those shared goals.

Edson understands why Elliott was pleased: "His clients are all currently in the industry, and the city council approved a phase-in period until the beginning of 2016. That greatly increased the value of his members' licenses and businesses and gave them a virtual monopoly until that date."

Still, there were a couple of last-minute alterations, with the most intriguing of them dealing with the 1,000-foot distance required between marijuana centers, as well as from a shop and child-care facilities, alcohol and drug treatment operations and schools. Previously, this span was calculated in Denver by pedestrian access -- meaning 1,000 feet needed to walk from one spot to another. But councilman Paul Lopez pushed through a tweak that will now measure the 1,000 feet in a straight line, i.e. as the crow flies; we've got that document on the next page as well. Why?

"He's said that the neighborhood he represents is less wealthy than other neighborhoods; they can't get as many crosswalks and stoplights," Edson notes. "So the distances people would have to walk are supposedly longer than they'd be in a place like District 9 in Stapleton, where they have more crosswalks."

Denver City Council.
Denver City Council.

Does that mean some centers that are legal now have suddenly become illegal? Edson doesn't think so. "There's a grandfather clause for those in an existing MMJ facility for child-care establishments and treatment centers. And because the federal government uses the crow-flies measure, all the centers should already be 1,000 feet from schools" -- or else, presumably, the feds would have ordered them shuttered via U.S. Attorney closure letters sent out during 2012.

However, Edson continues, "it's going to reduce the number of places centers can be built in the city, because it's going to increase the number of places that are prohibited."

In addition, the council said centers that haven't applied for a license with the city in addition to the state by October 1 "are out," Edson says. He's not sure how many current businesses may be effected by this edict, but we've heard numbers as high as a few dozen.

Nonetheless, unanswered questions remain.

Continue for more about Denver's retail marijuana rules, including a photo and document.

Warren Edson.
Warren Edson.

Among the mysteries that remain, Edson says, is when license hearings will begin, and who will go first when they do.

"If there are going to be hearings in January all the way until March or April, that's a pretty big business advantage if you can open up in January as opposed to two or three months later," he says. "Now, we know the applications are coming out next Monday -- and we know they're supposedly due on October 1. But that's about all we know right now.

"I'm hoping the city will start having these hearings quickly, rather than waiting until the new year. But my concern is that nothing has gone quickly in the medical-marijuana-licensing world. Around half of people who applied for licenses in August 2010 are still waiting for them more than three years later."

Another issue. "The licenses appear to run from January 1 to January 1. Let's say you don't get your hearing until April. Will you get credit for the four months you couldn't open?"

Such matters aren't merely academic. As Edson sees it, "these are things people would like to know before they apply for a very expensive license in twelve days. We're talking about investing tens of thousands or even hundreds of thousands of dollars into your business and you've got twelve days to apply. So not knowing these things doesn't help you make appropriate, well-thought-out business plans, which you'd think the government would want given what we're talking about here."

One more vague area: State law requires businesses to cultivate at least 70 percent of their own product until October 2014, at which point they can become independent grows. But in Denver, new businesses can't come into the industry until 2016. So are new grows illegal in Denver even after October 2014? Or will they be allowed -- and if so, under what regulations? Edson doesn't know, and he doubts anyone else does, either. "It'll be interesting to see how the city deals with it," he says.

That sentiment can apply to plenty of other parts of this fledgling industry. Here's a look at the Denver Retail Marijuana Code and the aforementioned Paul Lopez amendment, including his handwritten notes.

Denver Retail Marijuana Code

Denver Retail Marijuana Rules: Lopez Amendment

More from our Marijuana archive: "Marijuana rules in Denver: City Council's 39 key decision points."


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