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City of Denver Votes to Make Social-Use Cannabis Businesses Permanent

March 1, 2019

As the first state to legalize recreational marijuana, Colorado has attracted a wealth of cannabis inquisitive tourists. The city of Denver has embraced this aspect of the cannabis industry and in 2016 voted to approve social-use cannabis businesses but with a four year expiration date.

Sunset Date for Social Use

The sunset date for social-use cannabis businesses is rapidly approaching and with only two businesses currently having a social-use license the Denver City Council recently voted 10-1 in favor of making it a permanent opportunity. As of now only a coffee shop in a Denver strip mall and a new lounge on Broadway, which is now up for sale, have acquired licenses to for social-use cannabis.

The limited time period was a major deterrent for many businesses as securing a business loans was virtually impossible for such a short time span. Additionally, most commercial real estate requires the owner to sign a 3 to 5 year lease which would leave owners stuck paying rent even after closing their cannabis cafe or lounge.

City Council Makes it Permanent

Denver Councilwoman Kendra Black explains, “With less than two years available, it’s difficult to get financing. If you’re leasing a space, most leases, they’re three to five years. And then you’d have to get funds to build out the space. And so it’s just really not feasible for a prospective business to open a business in that time frame.”

Financial constraints combined with a small window of time to establish social-use cannabis businesses simply didn’t make much sense to many entrepreneurs. Now that the Denver City Council has removed the operational time limitation, council members are hoping more businesses will be incentivized to invest in cannabis cafes.

Denver Considers Rezoning

Councilman Kevin Flynn was the only nay vote and thought there might be other ways to address the slow start. Flynn noted that, “I think that we ought to have a more comprehensive package of changes that could address the problems that we’re looking to solve.”

In addition to eliminating the sunset date, city officials are also reconsidering the zoning requirements for social-use cannabis businesses. Currently all cannabis cafes must be at least 1,000 ft. from schools, child care centers, city parks, and drug addiction rehabilitation centers.