Colorado: Denver’s Businesses: Allowing Indoor Cannabis Consumption

Authored By: Adam Detsky
Wilson, Elser, Moskowitz, Edelman & Dicker LLP


Many tourists come to Denver looking to enjoy Colorado’s cannabis laws. However, once they buy some product and leave the dispensary, they often find themselves without a place to smoke.

Most hotels will not allow it. It’s not legal to smoke and drive, or to smoke in public areas. Even Colorado residents face this dilemma because many residential leases have no-smoking clauses.

In short, purchasers are caught in a conundrum: either find a private residence to consume the marijuana or use it in a manner that violates a law or rule.

Initiated Ordinance 300

The City of Denver has come up with a solution − sort of. Referred to as the “social marijuana” law, Ordinance 300  passed by the narrowest of margins, 53 to 47 percent ( The ordinance will not be the immediate answer hoped for by the marijuana industry and enthusiasts, but it is a starting point for marijuana gaining acceptance in the community.

Ordinance 300 seeks to create a four-year pilot program to allow regular businesses to apply for a license to allow cannabis consumption inside the establishment. This is not the creation of smoking lounges or pot bars such as those found in Amsterdam. Rather, this ordinance allows businesses of many different types to apply, subject to certain conditions. The local yoga studio, hair salon, gift shop – all can apply. In fact, as the law is written, the only businesses that cannot apply are marijuana dispensaries because Colorado law bans on-site consumption in dispensaries.

Although as written, the law means that restaurants, bars and coffee shops soon will allow patrons to smoke on premises, the State’s Department of Revenue has made it clear that this won’t happen without a legal challenge. The Department already has stated that bars, restaurants and other businesses licensed to serve alcohol will not be issued social marijuana permits.

Presumably, restaurants that do not have a liquor license will be allowed to apply for the license. The Department’s primary concern appears to be with establishments that would sell both marijuana and another intoxicant.

The Challenges

  • Even for businesses that are allowed to obtain a permit, there are likely to be relatively few establishments that will want to take on the requirements to obtain the permit. To get the permit, the applicant business must designate a consumption area and submit a plan to the City that includes: A diagram of the physical layout of the premises
  • The boundary for the consumption area
  • A detailed written operations plan describing  (1) how the establishment will enforce laws against consumption by those under the age of 21 and (2) how the establishment will train its employees on identifying and responding to over-intoxicated consumers.

This will mean creating written guidelines, providing training and perhaps even obtaining certification. A bring-your-own-cannabis (BYOC) consumption site is no different in principle from a bring-your-own-bottle restaurant or club. In both cases the establishment does not sell the intoxicant but still must deal with the potential problems associated with intoxicated patrons. These are not the burdens the average business will likely wish to assume.

Procedurally, businesses also will need to seek and obtain the backing of a neighborhood group such as a city-registered neighborhood organization or a Business Improvement District. The neighborhood group would be able to set operating conditions, such as hours of operation and even the duration of the permit. It could be as long as a year or as short as one night. In no event can a permit holder allow the consumption of cannabis between the hours of 2:00 a.m. and 7:00 a.m., and businesses are still subject to the recently passed Denver City Council bill that prohibits smoking within 1,000 feet of any school.

Colorado Clean Indoor Act

But even after a business submits the plans, obtains the license and provides the necessary training to personnel, people will still not be able to smoke marijuana in a traditional manner. Ordinance 300 requires any business allowing cannabis consumption to comply with the Colorado Clean Indoor Air Act (C.R.S. 25-14-202-209), a law that explicitly disallows smoking indoors absent certain conditions. This means that one cannot “smoke” indoors. What they can do, however, is vaporize.

Vaporizing is perhaps the largest growth area within the industry. It generally is considered to be the healthiest way to consume marijuana, as the user is − in theory − only inhaling the vapor of the THC (tetrahydrocannabinol is the chemical responsible for most of marijuana’s psychological effects). Some estimates say the process eliminates as much of 95 percent of the smoke inhaled. These vaporizers come in all shapes and sizes – some take up an entire coffee table while others look like a writing utensil to the untrained eye. The exhaled vapor dissipates quickly but still exists. People fear that vapor, while different from smoke, may present health concerns both for the user and for those who enter premises that are deemed smoke-free.

Gaining Acceptance

While Ordinance 300 has passed, it still has obstacles to overcome. There is already opposition trying to find ways to block its implementation. Opposition groups argue that Amendment 64, the initiative that amended the Constitution of the State of Colorado to allow recreational use, expressly did not legalize consumption that is conducted openly and publicly. For that reason, many have contended that Ordinance 300 is unconstitutional.

Absent a legal challenge to its constitutionality, the Ordinance will likely be implemented. The City Council has 60 days to write the rules governing how businesses apply for the permit, and under the City of Denver’s municipal code, the City Council shall not amend or repeal an initiated ordinance adopted by a vote of the people within six (6) months after final passage. What this means is that the City Council cannot bar the implementation, at least to start. During the four-year trial period, the City Council is tasked with studying the impact of cannabis consumption permits.

Ordinance 300 is not the immediate answer that the cannabis community was hoping for, but it’s a start. It is a first-of-its-kind attempt to prevent and reduce consumption in public parks, streets or areas where marijuana smoking is prohibited. Allowing marijuana use indoors still needs to gain more acceptance, and this ordinance is a productive starting point.

Adam Detsky

Wilson, Elser, Moskowitz, Edelman & Dicker LLP

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