A Cloud Divided: Tensions Rise as Social Pot-Use Program Struggles

Nearly five full years after recreational cannabis sales began on January 1, 2014, Denver is home to 216 dispensaries and 275 grows, yet it has just one fully permitted place where consumers can consume cannabis: the Coffee Joint, a coffee shop next door to a dispensary in an industrial area off I-25 in central Denver. Another applicant, Vape and Play, has received approval from the city and expects to open in mid-January on South Broadway.

And that's it.

To explain the paucity of social consumption spots, the Denver Department of Excise and Licenses points to state bans on alcohol sales and indoor smoking, saying they make it difficult to find a profitable business model. But having an I-300 license isn't the only way to throw a social pot party. Private clubs, events and tour companies have popped up as ways to circumvent the ban on "open and public" cannabis use that was written into the wording of Amendment 64. Private limos, invitation lists and members-only designations are used to keep from being labeled "public."

click to enlarge The Coffee Joint is currently Denver's only licensed cannabis lounge. - JACQUELINE COLLINES
The Coffee Joint is currently Denver's only licensed cannabis lounge.
Jacqueline Collines
So far, though, the city has been unimpressed with many of these attempts, shutting down some of the private clubs while citing and arresting tour company employees for public consumption and Colorado Clean Indoor Air Act violations and even DUIs. Crackdowns haven't stopped these businesses from continuing to sprout up, however.

That's led to a growing tension between I-300-observing entrepreneurs and unlicensed private pot clubs and tour companies. Denver City Councilwoman Kendra Black has headed the city's task force looking into the I-300 pilot program for almost a year, and at the group's meeting in November, Vape and Play co-founders Taylor Rosean and Megan Lumpkins called for a crackdown on unlicensed clubs and tour companies.

"There are several private interests that intend to open more private clubs in the coming years. Even though these business owners are fully aware of the current regulations, they are choosing to open 'grey market clubs,'" Rosean said. "These clubs continue to shirk the will of Denver voters and residents."

Rosean and Lumpkins pointed to the lack of regulations affecting private clubs, which they charge are illegal. Although neither mentioned a specific company at the meeting, their now former marketing director pointed a finger at the Loopr mobile cannabis lounge, accusing it of giving away free samples without checking IDs at an event in another state.

Loopr co-founder Hal Taback denied the allegation, calling Vape and Play's comments an "irate outburst." Still, "I understand their frustration," he says. "They've invested money, time and energy in this, so they feel treated unfairly when they see what else is going on. I voted for I-300. It's always better if we have more bus stops, but we foresaw a lot of these problems coming with it. Its a really great thing with a really bad codex."

Taback would rather work more closely with the Colorado departments of Transportation and Public Health and Environment or the state Marijuana Enforcement Division than try to fit within I-300 regulations, since state law allows for cannabis or alcohol consumption in the back of a privately owned limousine. "For oversight, it'd be easier for us to just work with the CDPHE or MED than Denver agencies," he explains. "I wouldn't have dared try this if it weren't legal. We did follow the rules, and we're in good standing with the city right now."

click to enlarge Loopr co-founder Hal Taback rides one of his buses through the Denver metro area. - EMILY MCCARTER
Loopr co-founder Hal Taback rides one of his buses through the Denver metro area.
Emily McCarter
That's after hitting a rough patch, though. In June, Loopr competitors My 420 Tours and Colorado Cannabis Tours both saw their buses boarded by Denver police officers, who arrested the drivers and cited the staff and riders for public consumption — a first for cannabis tour companies in Denver. Both businesses are pushing their drivers who were cited with DUIs to take their cases to trial. If they do, the outcome could change the shape of social consumption in this city.

Initiative 300 proponent Emmett Reistroffer helped draft the language that voters approved just over two years ago; he currently provides consulting to prospective social consumption businesses around the country and is working with a group that wants to open an I-300-compliant music venue with musician Dean Ween. But Reistroffer became so frustrated with the red tape surrounding social consumption in Denver that he's moved to Las Vegas, where he believes there is more of a future for social consumption. So he understands the frustrations of would-be entrepreneurs still in Denver.

"From Vape and Play's perspective, I totally get it," Reistroffer says. "I don't necessarily agree with it, but I get it. They're learning how difficult it is to get a permit, but then they're seeing other people just calling themselves a private club and not following the rules. ... I just don't think further enforcement is the answer. It's one of the reasons why I left Denver. I put close to four years of my life into this process, and I received almost no help from city officials."

Cities such as Seattle, Portland and Anchorage — all of which sit in states with recreational pot — have also struggled with regulating social consumption, getting little help from their state legislatures. But California has addressed the issue; state laws there give localities the right to allow or ban tasting rooms in dispensaries, while the Las Vegas Strip could see cannabis consumption lounges open in early 2019.

Reistroffer recognizes that Denver officials can't do much in regard to state laws banning alcohol or cannabis sales at I-300 businesses, but wishes they'd push state regulatory agencies to be more cooperative. "Las Vegas, Los Angeles, San Francisco — all these major cities that are legalizing — look at Denver as a failure on this issue," he says. "Public consumption is already going on. You can't make this any worse by not making any permits for this."

click to enlarge Denver City Councilwoman Kendra Black. - DENVERGOV.ORG
Denver City Councilwoman Kendra Black.
Despite the challenges, Denver's potrepreneurs are continuing to push their plans. Rosean says he's had to talk to over seventy organizations in order to satisfy I-300's regulatory requirements, and would like to see I-300's restrictions loosened in order to get more social consumption spots open. "The Denver City Council is just as frustrated as anyone else," he adds. "It's smart to re-evaluate and redraw lines."

Those lines include some that the city has drawn; numerous obstacles were added to the measure by Excise and Licenses during I-300's implementation, including a 1,000-foot buffer between a social-use location and any rehabilitation center, city-owned recreation center or daycare center. While there's not much that Denver officials can do to change state laws, they can address the location issue.

Bars and restaurants serving alcohol are subject to just a 500-foot buffer, Black pointed out at one recent task force meeting, explaining that because of the current 1,000-foot requirements, most of the locations where a social pot spot can operate are in industrial and lower-income neighborhoods already saturated with cannabis businesses.

"We talked about not having more of these businesses in those neighborhoods, but when you look at the maps, that's exactly what we're seeing," she said. "The idea when they started this was to put them where people socialize."

The task force is expected to take up the locations issue at its January meeting.

Update: This article was updated on December 19 to fix information from the Denver Department of Excise and Licenses; it had previously reported that there are 230 dispensaries in Denver, but now says the correct number is 216.