Once again, the state of Colorado demonstrates the free market nature of the United States of America by implementing new marijuana laws designed to keep Colorado’s competitive lead in a now nationwide marijuana industry. Faced with growing competition from other states, Colorado can no longer rely on an early entry into the marijuana market to maintain its leadership position but must actively compete with other states and provide legislative updates to enable Colorado’s blossoming marijuana industry to maintain a high level of consumer protection and serve the competitive needs of the industry at the same time.
Towards that end, Governor Jared Polis signed three bills into law on Wednesday, May 29, 2019 to increase the viability and competitiveness of Colorado’s marijuana industry:
- Part 1: Regulated Marijuana Delivery (HB19-1234);
- Part 2: Marijuana Hospitality Establishments (HB19-1230)
- Part 3: Publicly Licensed Marijuana Companies (HB19-1090).
In this three part series I will briefly break down the key points of these new laws and discuss some opportunities they create for Colorado’s marijuana industry.
Part I. Regulated Marijuana Delivery
Colorado’s Regulated Marijuana Delivery law provides a regulated, safe and efficient solution to the long standing problem of how to deliver medical marijuana to medical marijuana patients with mobility issues that would otherwise have limited or denied them access to medical marijuana. Once this solution is in place there is no additional hardship to make marijuana delivery options available for recreational consumers as well other than scaling the business model to take into account increased number of deliveries.
What are the key points?
- Delivery permits will be issued by the Colorado Department of Revenue: Marijuana enforcement division based on the applicant’s suitability to participate in Colorado’s marijuana industry.
- Local municipalities will have the opportunity to ban delivery within their jurisdiction or implement time, place and manner restrictions on deliveries.
- Medical marijuana delivery will begin no earlier than Jan. 2, 2020 and recreational marijuana deliver will begin no earlier than Jan. 2, 2021.
- Delivery permits will be approved for medical marijuana centers, retail marijuana stores and both medical and retail marijuana transporters only. Marijuana cultivation and manufacturing facilities, medical or recreational, will not be permitted to deliver direct to consumer.
- Deliveries are only permitted to residential addresses. Residential addresses will have to be verified using a residential delivery indicator available through third-party service providers.
- -A $1.00 surcharge on each delivery will be assessed and remitted to the local municipality where the source store is located.
- Only one delivery per address, per person or per patient per day is permitted.
- No deliveries to educational campuses or public property are permitted.
What is the opportunity?
Colorado’s regulated marijuana delivery bill completes a critical component in the marijuana seed to sale cycle of regulations. Before this bill, medical marijuana patients that faced mobility restrictions were severely limited in their options to safely obtain medical marijuana. They were held hostage by limited free market options to have medical marijuana legally delivered to them or required to take their chances with unregulated grey market solutions with obvious safety implications.
Now, Colorado has approved a “last mile” solution this problem which will benefit the consumer by providing a regulated and trustworthy modality to obtain marijuana within the system rather than having to possibly seek questionably legal delivery solutions outside the system. Further, the marijuana industry benefits from this legislation by opening up a larger consumer base by not requiring consumers to physically enter their brick and mortar marijuana business locations. Additionally, one barrier to entry into the marijuana industry has been navigating local zoning rules to find a physical location to your business that also generates enough foot traffic to support your business. Marijuana delivery options will open up the option to locate your marijuana business anywhere that is zoned correctly and focus on marijuana delivery as a component of your business model.
The recreational marijuana industry is the sparkly and glittery gem that attracts the most attention in the public sphere but that is often to the detriment of the various state medical marijuana businesses, and their reliant medical marijuana patient, that are competing with state recreational marijuana businesses for investment dollars. The hardest hit in this competition are the medical marijuana patients that don’t have the strongest voice or lobbying resources to promote legislation in their interests.
With the passage of this bill, an essential piece to their treatment is addressed and resolved.
Underlying all free markets is the doctrine that all industries must grow to survive and Colorado’s marijuana industry is no different. Eleven states and the District of Columbia have legalized recreational marijuana and these states are competing with each to entice high end investment opportunities into their respective multi-billion dollar marijuana markets to the benefit of their respective economies. To court investors, Colorado has to demonstrate the viability of their marijuana markets to grow and facilitate this growth with legislation that promotes both public and industry interests.
Adding regulated marijuana delivery options to Colorado’s marijuana industry’s arsenal of competitive services is another step in the evolution of the marijuana industry nationwide and will benefit both the industry and consumers as businesses compete to provide the highest level and quality of services at the lowest price.
Stayed tuned for Part 2: Marijuana Hospitality Establishments
Craig Small is a Senior Attorney at Hoban Law Group. Mr. Small is a Past President of the Boulder County Bar Association and is an active member of the Colorado Bar Association and the National Organization for the Reform of Marijuana Laws.
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