Initiative 300

Author: Dan Garfield

Initiative 300 has passed in Denver! Initiative 300 will create a four-year pilot program allowing businesses to seek permits for bring-your-own marijuana, over-21 consumption areas. These areas may be both indoors and outdoors. Indoor areas will allow for vaping and edibles, but not smoking (as that would violate the Colorado Clean Indoor Air Act). Outdoor areas will allow for vaping, edibles, and smoking.

Perhaps the largest impact that the passing of Initiative 300 will have is on Colorado’s tourist industry. Tens of millions of tourists come to Denver every year, with roughly 18% indicating that they were drawn to Colorado in part because of legalized cannabis. However, unless these tourists have a local friend or relative to stay with, many of them find out after they get here that there is no legal place for them to consume the cannabis that they lawfully purchased. Similarly, many Colorado residents live in HOA- or landlord-controlled properties with restrictions on cannabis use. Still others live in federal housing, which does not allow on-site cannabis consumption. These tourists and residents who have nowhere to smoke cannabis end up smoking it anyway – in hotel rooms, in their vehicles, and in public spaces where they may not legally consume cannabis.

Initiative 300 is a step in the right direction for responsible social use of marijuana. Denver has until January 21, 2017 to develop rules for Initiative 300. Our contacts at the Department of Excise and Licenses have suggested that the City might take even longer to promulgate the permit application. We do not expect any swift government action on this initiative and anticipate that the City will accept the first applications sometime in late January or February. A sunset clause will end the program and rescind the permits if Denver’s city council does not decide to make the program permanent by the end of 2020.

Applicants for social use permits will need support from neighborhood groups, such as a city-registered neighborhood organization. Those groups could set operating conditions in exchange for their support, limiting eligible hours of use, requiring heightened security, and more. It appears that those seeking a permit pursuant to Initiative 300, much like cannabis dispensary applicants, will need to show some form of neighborhood need. However, it is unclear at this time how the social use permit process will differ from cannabis or liquor permit processes. Additionally, there will be limitations on the types of businesses that may obtain a social use permit. The Colorado Department of Revenue passed a new regulation last Friday, prohibiting establishments with a liquor license from allowing on-site marijuana consumption. This new regulation greatly restricts the types of businesses that may apply for social use permits.

We are monitoring the City’s implementation of the initiative closely and we are conferring with a team of lawyers that may file suit to challenge the Colorado Department of Revenue’s new rule prohibiting establishments with a liquor license from allowing on-site marijuana consumption. Please do not hesitate to contact us if you have any questions.