Denver, Colorado Springs Pot Lounges First to Apply for State Licenses

The Coffee Joint, the first establishment to hold a cannabis consumption license in Denver, is now the second pot lounge business to apply for a state social consumption license.

Colorado Springs social lounge Studio A64 successfully applied for a social consumption license at the state Marijuana Enforcement Division office three hours before Coffee Joint owners Rita Tsalyuk and Kirill Merkulov could beat them to it.

Studio A64 could not be reached for comment, but Tsalyuk and Merkulov say the opportunity to apply for a state license is a big step for all cannabis businesses. "This is bigger than us. It's just a bigger step in the industry," Tsalyuk explains. "It opens the door to do something different and plan ahead for the next year."

According to the MED, the Marijuana Hospitality Business Applications were published online Monday, December 16, with several options for licenses, including mobile lounges, establishments with micro sales (limited pot sales), and establishments without micro sales. MED communications director Shannon Gray says that the new application aligns with state regulations, and local jurisdictions can opt in or out of the applications as well.

"The applications are based on regulations and state law and state rule," she says. "And since Colorado has a strong history of enforcing local jurisdiction, local jurisdictions can decide whether to opt in or out of these state applications."

The Colorado General Assembly passed House Bill 1230 earlier this year, allowing qualified businesses to apply for pot consumption areas, including marijuana dispensaries, hotels, restaurants, art galleries, yoga studios and more. Similar to the application breweries have, dispensaries could now apply for a tasting room license, while businesses such as hotels or art galleries could apply for private consumption licenses — but no alcohol sales would be allowed at any of these businesses.

Denver is a rare Colorado jurisdiction to have already created a social consumption program, with voters approving Initiative 300 in 2016. The initiative lets businesses apply for a social pot consumption license in limited designated areas throughout town, and doesn't allow smoking indoors. Under the rules, the Coffee Joint is the only businesses that has been able to stay open, although city officials are likely to revisit Denver's local pot use rules in 2020.

Colorado Springs also allows several cannabis clubs to operate, but their local licenses are temporary, with social use also likely to be revisited by city officials in 2020. According to Gray, these businesses have a grandfather option for them to get a state license, but must still maintain local approval.

"It feels like a relief to get the application done, but it feels like we accomplished something," Merkulov says. "This isn't really a material thing we can measure, but we can at least tell it's one step further to expanding."