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Cannabis Hospitality License is Approved in Denver

The cannabis industry is undergoing a metamorphosis. From the days of a few lone dispensaries opening, we’re entering a new era for the industry, marked by expansion and diversification. Nothing exemplifies this trend more than the announcement that businesses are being granted cannabis hospitality licenses in Denver.

It’s a major turning point for the industry. Below we’ll be exploring what this landmark decision means for the cannabis business owners and how to apply for a cannabis hospitality license.

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Colorado Approves Cannabis Hospitality License

Cannabis hospitality license applications were accepted starting in November 2021. After the initial applications were processed, the first licenses were granted in March 2022. Perhaps the most notable business granted a license was Tetra Lounge, located in downtown Denver.

Owner Dewayne Benjamin, speaking to Westword, stressed the importance of a legal place to consume cannabis.

“We’re already one of the biggest tourist attractions for the cannabis industry in Colorado, and we want to use Tetra as a social place and a spot for education for the state.”

It’s a view shared throughout the cannabis industry. Previously, The Coffee Joint was the only operator permitted for on-site consumption, so long as it occurred outside. However, after reworking the city’s rules, the new cannabis hospitality licenses allow for more liberal use of cannabis on business premises.

Not everyone will be able to apply for a cannabis hospitality license at first, however.

“For the first six years of the program, only people designated as social equity applicants are authorized for a hospitality establishment”, explained Eric Escudero, the Denver Department of Excise and Licenses’ Communications Director. “We want to achieve the full promise of legalization, and that in our mind is making sure there’s equitable access so more people can benefit economically – not just those who have financial advantage or advantage of connections.”

What does this mean for cannabis entrepreneurs?

With more business owners applying for cannabis hospitality licenses – like The Patterson Inn – it opens new potential revenue streams for marijuana businesses. The city will still be charged with regulating and enforcing existing laws, but this continues the journey towards a cannabis-friendly environment for a varied assortment of businesses.

For example, cannabis rooms in hotels would allow guests to consume marijuana they had purchased elsewhere. It’s a significant factor behind Chris Chiari, owner of The Patterson Inn, applying for a license.

But it also creates the potentiality for so-called “Bud and Breakfasts” – marijuana-friendly hotel combining the classic allure of a B&B with a cannabis twist.

There are a number of these hotels dotted throughout the country, albeit concentrated in Colorado. Although it should be noted, guests still aren’t allowed to smoke in their rooms. It’s a potentially highly lucrative opportunity when paired with tours of local grow facilities and major dispensaries.

Background to the cannabis hospitality license

Back in 2016, Denver approved Social Consumption Licenses, allowing certain businesses to accommodate smoking outside on their premises. However, such businesses could not also hold alcohol beverages, fermented malt beverages, or special event liquor permits.

Three years later, in 2019, the Colorado legislature passed House Bill 19-1230. It defined two types of marijuana license:

  1. Marijuana hospitality license, permitting the on-site consumption of marijuana without the sale of marijuana. It may be mobile, e.g., a vehicle.
  2. Retail marijuana hospitality and sales business license allow the sale and consumption of retail marijuana and retail marijuana products purchased on the premises.

After Denver passed Council Bill 21-0217 in April 2021, adopting a marijuana hospitality program, social equity applicants were able to apply as of November 2021.

Who qualifies as a social equity applicant?

Perhaps the most notable part of the decision is the restriction of application to social equity applicants until Jul 1, 2027. Social equity applicants must fulfill the following criteria:

  1. Be a Colorado resident
  2. Never previously had a marijuana license revoked
  3. Meet one of the social equity criteria
    1. The applicant resided in an opportunity zone or disproportionately impacted area for at least 15 years between 1980 and 2010; OR
    2. The applicant or immediate family was arrested, convicted or suffered civil asset forfeiture due to a marijuana offense; OR
    3. The applicant’s household income did not exceed 50% of the state median income as measured by the number of people who reside in the applicant’s household.

For approval, social equity applicants must own at least 51% of the marijuana business license being granted, and it must remain majority-owned until 2027.

How to apply for a cannabis hospitality license

There’s a standard process for hospitality license applications:

  1. State Applications. Apply to the State Licensing Authority to determine suitability and designation as a social equity applicant. You can then apply for a state marijuana business license.
  2. Apply online. Apply for a marijuana business license using the relevant webpage. Pay the required fees.
  3. City application review. The Department of Excise and Licenses will review the application in 20 days or longer.
  4. Complete a Needs and Desires Hearing. You’ll be asked to complete a public meeting discussing your needs and desires. There is no hearing for mobile premises.
  5. Complete inspections. Finally, if your application is recommended for approval, you’ll receive an inspection of your business premises to ensure it meets all the relevant regulations.

Marijuana hospitality license: An industry turning point

It’s been a long time coming. With cannabis sales being fully legalized for most of the 2010s, granting cannabis hospitality licenses marks another hurdle for the industry. Now, hospitality businesses can feature cannabis smoking areas on the premises, further opening the industry to innovation and adaptation.

Can your business benefit from a cannabis hospitality license? Find out more on the Denver Government site.

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