A city task force has recommended several changes to Denver's social cannabis consumption licensing program after reviewing the program's first year.
Initiative 300, Denver's social consumption licensing system, was approved by voters in November 2016 as a three-year pilot program. Because social pot consumption is such a new regulatory area, the initiative mandated that a city task force implement the program; meanwhile, Denver created a separate committee to meet throughout I-300's first year and subsequently provide Denver City Council with recommendations on how the program could be improved.
There's definitely room for improvement: Despite being open for applications since August 2017, Denver's social cannabis consumption license program has only approved two business permits. And so far, just one, the Coffee Joint, has opened its doors. The other approved business, Denver Vape and Play, received approval from the Denver Department of Excise and Licenses in August and is expected to open in November.
Opponents of the current social consumption regulations point to location restrictions that were added by the city after voters approved the initiative, as well as other prohibitions that make it almost impossible to come up with a profitable business plan. For example, under Denver rules, social-use establishments cannot allow smoking or sell cannabis or alcohol; they can only provide a space for vaporizing cannabis or eating edibles.
Excise and Licenses, the department responsible for implementing the changes to the I-300 program and reviewing social consumption applicants, has consistently defended the city's program, pointing to a number of locations that qualify and also citing a lack of entrepreneurial interest. However, both drafters of the initiative and members of the task force representing local cannabis businesses, restaurants and event promoters say the rules attached to the ordinance after it passed destined the program for failure, with ordinance drafters even threatening to sue the city in 2017.
The lawsuit never came, but the task force evaluating Denver's social consumption program seems to agree with some drafters' gripes. After meeting a handful of times over the summer, the task force, headed by Denver City Councilwoman Kendra Black, recently released a report of its findings and recommendations, which argue I-300 isn't working as is. City regulations "should not be based on fears of bad behavior that might occur," the report warns.
"Multiple challenges are preventing the successful implementation of I-300," it continues. "These challenges include: distance requirements that restrict available locations; limited opportunities for business to earn revenue; the 2020 sunset on the pilot; and the state rule prohibiting social consumption in a venue with a liquor license."
The location requirements have been the focus of the most public complaints. Added during implementation meetings, they require that any social consumption area be at least 1,000 feet from rehabilitation centers, schools, city-owned recreation centers and daycare centers. These rules have blocked potential social consumption businesses from opening in prime spots while forcing them to consider areas already saturated with dispensaries or growing operations, according to the report.
"These additional distance requirements restrict where neighborhood-approved businesses may locate and are more onerous than the approved initiative intended. They prevent social consumption permits from being considered in some neighborhoods where they are desired and supported by neighborhood organizations and business improvement districts," the report reads. "The distance requirements may perpetuate the concentration of marijuana-related businesses in neighborhoods where there is already a high number of marijuana businesses. Through interviews with interested potential applicants and a careful study of maps showing the impacts of distance requirements, it is evident that the additional distance requirements set by Excise & Licenses are thwarting the intent of the voter-approved initiative by restricting available locations."
According to the task force, some of the rules, "specifically the distance requirements, created an overly burdensome regulatory process that is not experienced by other types of businesses." It's requested that the city re-evaluate the location requirements, as well as the high application fees for a social consumption business:
Recommendation 1: Maintain all the current 1000-foot setbacks, but allow applicants to seek an exception to a distance requirement by showing support from the subject of the setback. For example, if an applicant meets all requirements, but falls short of the 1000- foot setback from a daycare, the applicant can seek a letter of support or non- opposition from the daycare thereby granting an exception. The letter would remain on file with Excise & Licenses and would not need to be resubmitted on an annual basis.
Recommendation 2: Honor the will of the voters by adhering to the distance
requirements that were set forth in the ballot language (1000 feet from schools) and removing the additional distance requirements added by Excise & Licenses (1000 feet from day cares, treatment centers and pools/recreation centers.)
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As for other restrictions, task force members say they understand that Excise and Licenses' hands are tied when it comes to allowing smoking, alcohol consumption or cannabis sales at businesses that allow social pot use. The Colorado Department of Revenue bans cannabis use in establishments that hold liquor licenses, while a state law bans pot consumption at businesses that sell cannabis, and the Colorado Clean Indoor Air Act bans any business with more than three employees from allowing smoking inside.
There are also three words in Amendment 64 that make regulating social pot use difficult for Denver: "Open and public" cannabis consumption is banned in Colorado. But what, exactly, does "open and public" mean?
"For clarity in developing policy and rules, the state needs to define 'open and public,'" the reports urges."Should there be any exemptions from the Colorado Clean Indoor Air Act for private clubs? Should the state reconsider the Liquor Enforcement Division rule prohibiting marijuana use in a business with a liquor license?"
The full report will be presented to the Denver City Council Marijuana Committee during its next meeting in November.