2020 Colorado Cannabis Laws Update

On January 1st, two new marijuana laws went into effect in Colorado. The first was House Bill 1234, which allows for the commercial delivery of medical marijuana.

While I recognize the market need for delivery services, I’m grateful that at the onset of recreational legalization Colorado began with a brick and mortar model.

Dispensaries Critical in Normalizing CO Cannabis Industry

Dispensaries have been, and still are, critical in normalizing the Colorado cannabis industry, from policy makers to moms and dads to our youth. Ultimately, this normalization plays a significant role in the industry’s continued success.

As the industry has developed, dispensaries have matured from stereotypical “ganja-centric” to now, where it’s difficult to tell the difference between a cannabusiness and any other business.

California was the opposite. Marijuana delivery has been a pivotal issue in California where last year the state’s Bureau of Cannabis Control allowed for delivery even in jurisdictions where commercial cannabis activity was banned. More and more, cities planning for marijuana legalization are considering not allowing brick and mortar dispensaries, in favor of a delivery only-model. However, that comes with a number of issues.

What are the advantages of the brick and mortar model? It’s safer. It creates a verifiable revenue stream and it keeps all the operational dollars within your jurisdiction because you have an actual store that collects sales taxes. As opposed to a delivery service where, despite rigorous tracking, there’s inherently more “grey-area” room for illicit activity.

All that being said, there’s a huge demand from California tourists to order products for delivery at their hotel while they’re still waiting to de-board at LAX.

Colorado House Bill 1230

The second of Colorado’s new laws is House Bill 1230. It allows for on-site marijuana consumption at licensed hospitality establishments. I’m somewhat perplexed by this; even though Colorado has had permissive licensing laws on the books in and around Denver for consumption clubs,  we don’t have substantial capital invested in these spaces.

There are limits to what’s allowed at a consumption club. You can’t serve alcohol and in most cases you can’t serve food. And unless you have an outdoor area, you’re restricted to vaping-only.

Denver Missed Investment Opportunity

Nonetheless, I’m amazed that nobody in Denver has seized this investment opportunity. It’s hard to imagine a consumption club that wouldn’t be successful, especially in a densely populated neighborhood like LoDo or RiNo, where food vendors and beer gardens are right next door. Everyone’s talking about it, no one’s doing it, and I don’t quite understand why.

You can bet if Los Angeles outright allowed regulated, authorized, and licensed on-site cannabis consumption, entrepreneurs would invest millions of dollars to completely blow up that scene. I understand different cultural sensitivities, but Denver’s lack of these businesses so far is puzzling.

The State of Colorado’s move to allow common consumption areas for alcohol may set a precedent for how consumption areas in general might become more acceptable, especially as cannabis becomes more and more normalized. Still, Colorado continues to be a progressive cannabis regulatory mover and shaker and a success story in the great American cannabis experiment. Inspiration, move me brightly as we watch new developments in 2020.