Lottery System to Select New Denver Marijuana Businesses

Scott Lentz
It's not quite Shirley Jackson's classic short story, but the winners of this lottery will still want you stoned.

In a bulletin sent to marijuana business owners today, February 21, the Denver Department of Excise and Licenses announced a timeline for an upcoming marijuana business location lottery for new dispensaries and growing operations. The proposed lottery would take place in 2021, and would be the first time the city opened itself to new marijuana cultivation and storefront applications since 2016, when Denver City Council set a limit on the number of marijuana dispensary and grow locations.

While dozens of new marijuana business locations have opened since then, those were all grandfathered in, their applications filed before the 2016 cap was set. Now that those businesses have either come to fruition or fizzled away, the city is considering allowing new players.

Under the new system, Excise and Licenses anticipates setting a cap on the number of marijuana dispensary and cultivation locations each year, and will then hold a lottery to allot any remaining opportunities. To align with the council ruling, the lottery would be for locations, not licenses, as one marijuana business location can have separate licenses for medical and recreational pot operations, such as growing, infused product manufacturing and sales.

Excise and Licenses has proposed caps of 220 dispensary locations and 299 cultivation locations in 2021. That means there won't be a lot of new locations available for the lottery; according to the department, there are currently 212 total dispensary storefront locations and 247 marijuana cultivation locations in Denver.

The cap and lottery system only applies to dispensary and grow locations, not infused products, testing laboratories or research facilities, nor will the cap apply to potential marijuana delivery businesses if Denver decides to allow them, or to social consumption locations. The new plan will be presented to the city council on March 17 by Excise and Licenses, when the department will recommend pushing the lottery back to 2021 instead of an unannounced date in 2020.

"This is being recommended to give [Excise and Licenses] time to explore new marijuana license types, including hospitality and delivery licenses. Additionally, prior to the first open application process, the City would like to develop a successful social equity plan to ensure equitable access for any new applicant into the licensed marijuana industry," according to a city announcement of the lottery.

The department also announced that it would begin issuing local licenses to medical marijuana research and development facilities. Although licensed at the state level and operating since 2018, Denver's MedPharm Holdings (a branch of Medicine Man Technologies) still doesn't have a local license to operate because Denver hasn't created them yet, but Excise and Licenses "is introducing an ordinance to create this new type of marijuana license," according to the city's bulletin.

In advance of the March 17 presentation before Denver City Council, there will be a public feedback session on March 5 at the Denver City and County Building.