Guest blog by Kathy Patchel, RZA Legal summer extern
(Continued from last month's Part I - The Marijuana Hospitality Establishment)
Two new business categories will be rolled out in January of 2020 to entrepreneurs looking to enter the Colorado marijuana industry: The Marijuana Hospitality Establishment License and the Retail Marijuana Hospitality and Sales Establishment License.
These new business licenses will open the doors to many different types of marijuana consumption spaces. The specific rules governing these licenses are being crafted as this blog gets published, but this two-part blog takes a look at what the opportunities may be available with these new types of businesses.
Part 2 – The Marijuana Hospitality and Sales Establishment
The Marijuana Hospitality and Sales Establishment license will be available to Retail Food Establishments including restaurants and hotels that serve or otherwise provide food to customers. These establishments cannot be mobile (no infused food trucks, sorry), and the consumption area must be isolated and concealed from the public. The establishment will be able to sell marijuana and marijuana products in an amount that is intended for customers to enjoy on site.
There is an exception to the Colorado Clean Air Act carved out specifically for these establishments, so that smoking of marijuana flower will be authorized so long as in compliance with local regulations as well. HB19-1230 did not provide the specific limits to be placed on sales to each customer (this will be established in the rules that the Marijuana Enforcement Division is busy crafting this summer), but they did include a provision that allows for unconsumed marijuana to leave with the customers as long as it has been packaged in a way similar to the requirements for dispensaries.
Establishments will not be allowed to create their own marijuana products or add marijuana to any food produced or provided at the establishment (so a bakery concept would not work under this license-type), but this doesn’t stop customers from being able to add marijuana to products sold at the establishments. This seems to be a great opportunity to make suggestions for pairings of marijuana products and food offered by the establishment. For example, an establishment could provide ice cream that pairs well with bakery-type edibles or smoothies that are a perfect vehicle for water-soluble THC packets. Advertising will be allowed inside the establishment which creates great branding opportunities, especially if any existing cannabis brands wish to create an exclusive consumption space for its customers to enjoy its products. One important thing to note, though: these establishments will not be permitted to serve alcohol or tobacco products of any kind.
These licenses are subject to the same licensing requirements as the rest. Each license will have to be approved by both the state and local ordinances. Local municipalities will have the opportunity to vote on whether they will allow these licenses to be given in their territory. So, make sure you vote in the local elections to help provide opportunities in your neighborhood.
Working with an experienced cannabis business attorney when preparing to open a cannabis consumption business can help you avoid set-backs and make sure you have done all you need to do to ensure success.