Rollout of Social Use in Denver

Author: Jeff Wilson

Following the election victory for Initiative 300 (“I-300”), Denver is ironing out how to issue permits for social use of cannabis in businesses, private clubs, and at special events.

Currently, adults in Denver can lawfully consume cannabis only on private property not open to the public, such as private homes (including yards and porches). Hotels, bed and breakfasts, and cannabis tour services may allow consumption in limited circumstances. Open and public consumption (in personal vehicles, parks, or businesses open to the public) is unlawful. All consumption must comply with the Colorado Clean Indoor Air Act (“CCIAA”), which requires, subject to very limited exceptions, that all smoking be outdoors (https://www.colorado.gov/pacific/sites/default/files/Indoor%20air%20LE%20Key%20Points_0.pdf).

Social use permits will allow cannabis consumption in a Designated Consumption Area (“DCA”). The text of I-300 (http://limitedsocialuse.org/initiative/) gives some parameters for DCAs and the permitting process, but also allows the Denver Department of Excise and Licenses to make additional rules that do not frustrate the intent of I-300. Denver formed a committee of diverse viewpoints, including both proponents and opponents of I-300, neighborhood and professional organization leaders, law enforcement, lawyers, city council members, and a law professor, to debate issues and make recommendations to Excise and Licenses for final rulemaking. Final rules are expected by late spring, and applications for permits are expected to be accepted beginning this summer.

Without final rules, the exact process and expense for obtaining a permit is not clear, but certain details from the committee discussions and the text of I-300 include:

• DCA permits may cover any length of time up to one year, from one-time events to full-time consumption establishments and anything in between. Permits may allow consumption during only a portion of business hours or only on certain days.
• Unless changed by the city council, a DCA permit application will cost $1,000 and the annual fee for a DCA permit will be $1,000.
• DCAs may be as large or as small as the property holder chooses.
• DCAs may not operate between 2:00 a.m. and 7:00 a.m.
• Only adults over 21, including employees, will be allowed in a DCA.
• At least one Registered Neighborhood Organization (“RNO”) that encompasses the DCA must provide written support for a permit to be issued. The supporting RNO must have existed for at least two years.
• A supporting RNO may place conditions on the permit in addition to the basic legal requirements, such as limitations on time, dates, types of consumption, noise, odors, and maximum number of guests.
• No public hearing or public posting requirement currently exists for issuance of a permit, but both are expected in the final rules.
• State liquor regulations prohibit liquor licensed businesses from allowing cannabis consumption on their premises, but this is currently the subject of a lawsuit (http://www.westword.com/marijuana/businesses-sue-over-rule-preventing-liquor-license-holders-from-applying-for-social-use-8775816). Even if the lawsuit fails, it may be possible for a single event or establishment to have separate physical boundaries for a liquor license and a DCA, so long as each type of consumption is restricted entirely within its respective boundaries.
• DCAs must be at least 1,000 feet from schools and not visible from places where children congregate. Similar setbacks are expected for childcare centers and drug and alcohol treatment facilities. Setbacks between DCAs and other cannabis businesses or other DCAs are unlikely.
• Unless meeting an exemption under the CCIAA, a DCA may not allow smoking inside. The CCIAA permits vaping indoors (including dabbing without open flame). Outdoor DCAs may allow smoking if compliant with all visibility and odor rules. Cannabis edibles may be consumed in a DCA.
• State statute appears to prohibit anyone licensed by the Marijuana Enforcement Division (“MED”) from holding a DCA permit, but the limits of this prohibition are unclear. MED licensees may be able to sponsor events that have DCA permits. We anticipate that the MED will provide guidance on these issues.
• A DCA may not be on the same property as a business licensed by the MED.
• Only guests may bring cannabis or cannabis products for use in a DCA. Cannabis sales of any kind are not allowed. Sale of other goods and services will be permitted.
• Guests may share cannabis with each other, but may not store cannabis at a DCA. It is expected that all guests, both medical and recreational, will be restricted to possessing no more than one ounce of cannabis in a DCA.