Marijuana Banking

Oswaldo Barrientos picks dead leaves from marijuana plants at the grow facility where he works near downtown Denver in an April 3, 2019, photo. 

On the eve of the unofficial "holiday" for cannabis, the Denver City Council unanimously passed three bills changing the city’s marijuana policy to allow for social equity delivery and hospitality businesses.

The bills approved Monday — the day before 4/20 — will allow marijuana delivery and marijuana hospitality businesses within Denver later this year and provide $350,000 to the Department of Excise and Licenses for the implementation of the new business licenses.

Delivery licenses will only be available to social equity applicants until 2024. Licenses for stores, transporters, cultivations, manufacturing and the new hospitality establishments will be limited to social equity applicants until 2027.

“We’re really pleased to see this city council vote,” said Eric Escudero, spokesman for the Department of Excise and Licenses. “They demonstrated with their vote tonight that they support social equity and making sure all Denverites can benefit from this multi-billion-dollar industry.”

Social equity applicants are defined as Colorado residents who have never had a marijuana license revoked and meet one of the following social equity criteria:

  • Applicant lived in an opportunity zone or a disproportionately impacted area between 1980 and 2010
  • Applicant or immediate family was arrested, convicted or suffered civil asset forfeiture due to a marijuana offense
  • Applicant’s household income doesn't exceed 50% of the state median income

The bills' social equity applicant structure will replace the city’s current annual lottery system for distributing marijuana licenses and eliminate the cap on stores and cultivations.

By providing exclusivity to social equity applicants, Denver officials say they are trying to make up for the damage caused by the War on Drugs and the unequal persecution of disadvantaged communities for marijuana offenses.

“Denver saw $716 million in marijuana sales last year but only a small portion of our population has been able to benefit from the industry economically,” Escudero said. “We want more people to benefit.”

Though council members did not discuss the bills during their vote Monday, multiple community members called in to voice their opinions on the changes.

Char Day with Americans for Nonsmokers Rights’ opposed the hospitality businesses introduced in the bills, arguing that allowing smoking indoors weakens public health protections and subjects workers to damaging health conditions for a paycheck.

“Given the current public health concerns and the spread of COVID-19 … we strongly suggest maintaining 100% smoke-free environments to protect workers’ and citizens’ lung health,” Day said.

In the new hospitality businesses, patrons will be able to legally consume marijuana on the premises, including options for smoking and vaping. There will be three types of these establishments:

  1. Permanent hospitality establishments: Allow marijuana consumption but are not allowed to provide marijuana; users must bring it themselves.
  2. Mobile hospitality establishments: Allow marijuana consumption within a moving vehicle, like a shuttle or bus. Also not allowed to provide marijuana.
  3. Hospitality and sales establishments: Allow marijuana consumption and can sell 2 grams of marijuana, a ½-gram of marijuana concentrate and products with 20 milligrams of THC or less. Users can't bring their own.

While many anti-smoking advocates have spoken out against the bills, Escudero said the city has worked to develop a plan that expands the marijuana industry while also protecting public health and community exposure.

“We had to find the middle ground,” Escudero said. “There are still very strict rules and regulations.”

Hospitality establishments will not be allowed to overlap with premises that have liquor licenses or medical or retail marijuana licenses. They will be limited to patrons 21 and older, can operate between 7 a.m. and 2 a.m. and must adhere to city odor control and ventilation requirements.

The bills also maintain current advertising and location restrictions for marijuana businesses, but the method for measuring location proximities will be adjusted in some cases.

Current regulations in Denver require marijuana businesses to be at least 1,000 feet away from schools, childcare facilities, city pools, recreation centers, alcohol or drug treatment facilities and other similar license types — leaving only 10 square miles of land available for marijuana businesses.

In addition, new marijuana businesses are also not allowed within the top five Denver neighborhoods with the highest number of businesses. As of February, those neighborhoods were Overland, Northeast Park Hill, Baker, Five Points, Valverde and Elyria-Swansea, with the latter four tied for third place.

Kelly Perez, co-founder of Cannabis Doing Good, raised concerns about these strict location regulations, saying the limits could prohibit the policy changes from achieving desired progress.

"I think it’s going to be really hard for them to find places to operate,” Perez said. “I don’t know where they’re going to fit. It doesn’t mean don’t try … but there are major barriers in terms of zoning.”

The bills attempt to address this issue by adjusting the measuring method for hospitality businesses for recreation centers, city pools and alcohol or drug treatment facilities. The adjusted method will also apply in the case of stores for alcohol or drug treatment facilities.

This adjustment increases land available for hospitality businesses to nearly 34 square miles.

Denver resident Logan Goolsby also called in Monday to argue against the bills’ requirements that marijuana businesses submit a public Social Impact Plan, detailing diversity and inclusion in employment and environmental sustainability practices.

“How does this not violate certain requirements under things like the Equal Opportunity Employment Act by forcing public disclosures from small- and medium-sized businesses?” Goolsby said. “Why would they have to disclose this information to the public when no other business does?”

Goolsby also said it would be difficult for small businesses to maintain diverse employment, claiming the businesses would have to hire employees solely based on race and gender if other employees of that race or gender left the company.

To that, resident David Hagan responded that he was “taken back” by the thought that these businesses would only want to hire white men.

“This city is diverse, it should not be difficult to hire a person of color or a woman if you have to fire one or one leaves,” Hagan said. “That is white supremacy .”

Other people in opposition of the bills have expressed concern for the safety of marijuana delivery and the possibility of minors using delivery to access marijuana, a risk Escudero said the city has already accounted for.

The marijuana delivery program will allow people 21 and older to receive deliveries directly to private residences within Denver and other jurisdictions that allow for marijuana delivery. Delivery drivers will be required to check the receiver’s ID using an ID scanner.

The delivery vehicles must have a locked storage compartment secured to the vehicle to store the marijuana with constant video surveillance of the compartment and the front view of the vehicle. The vehicles are also limited in the amount of cash and product they can carry.

Deliveries will be available from 8 a.m. to 12 a.m. and limited to the same amount of product that can be purchased in stores: 1 ounce of marijuana, 8 grams of marijuana concentrate and products with 800 milligrams of THC. Multiple deliveries cannot be made to a residence in the same day.

Now that the city council has approved the bills, the Department of Excise and Licenses will be working on community outreach and education to make sure as many eligible residents as possible apply to be social equity applicants.

Escudero said the city expects to open applications for delivery drivers in late June and for hospitality businesses in November.

“Now the hard work begins,” he said.

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