Colorado Marijuana Hospitality and Sales Business License

What Is a Marijuana Hospitality and Sales Business in Colorado?

In Colorado, marijuana hospitality and sales businesses operate licensed premises where marijuana can be sold by the business owners and consumed by adults 21 years and older. Such businesses only permit the consumption of recreational marijuana or recreational marijuana-infused products on their premises. While people often take marijuana hospitality and sales business for a marijuana hospitality business, it is essential to state that the latter cannot sell marijuana or marijuana products on its premises. Unlike a marijuana hospitality business establishment, a marijuana hospitality and sales business establishment cannot be mobile.

Persons or entities operating licensed marijuana hospitality and sales businesses in Colorado can obtain their marijuana from state-licensed retail marijuana cultivation facilities or retail marijuana stores. They can also get recreational marijuana products from licensed marijuana products manufacturers for sale to patrons of their business establishments. Patrons can only consume the marijuana products sold at the establishment. As such, they cannot bring any marijuana product to the premises of licensed marijuana hospitality and sales business establishments for consumption.

Does Colorado License Marijuana Hospitality and Sales Business?

House Bill 19-1230, passed by the Colorado Legislature and signed into law by the State Governor in 2019, requires the Marijuana Enforcement Division (MED) to license marijuana hospitality and sales businesses. Besides licensing, the MED also regulates the activities of such business establishments. No person or entity can legally operate a marijuana hospitality and sales business establishment in Colorado without the requisite license. This license is only valid for one year, after which the holder may renew it.

How to Apply for a Marijuana Hospitality and Sales Business License in Colorado

The Marijuana Enforcement Division (MED) requires marijuana hospitality and sales business license applicants to have been residents in Colorado for at least two years before their application date. The first step in the application process is for a license applicant to decide whether to apply online or use the paper application. The MED manages an online application portal for persons or entities with a preference for digital applications. However, new users of this portal must first register to use the portal for their license applications. The Marijuana Enforcement Division provides a quick guide on how to navigate the online application portal. Once an applicant opts for this option, they will not be required to apply using paper forms and vice-versa.

When applying for a Colorado marijuana hospitality and sales business license using paper forms, an applicant must complete the Marijuana Hospitality Business License Application Form. This form has three options in the license types field, but an applicant must select "hospitality and sales business" as their license type of interest.

Generally, the MED requires any marijuana license applicant to pass credit and criminal background checks. As part of the application process, applicants must have their fingerprints taken by any MED-approved third-party fingerprint vendor in Colorado and submit evidence of complete fingerprinting with their application to the MED. These vendors usually issue receipts for fingerprinting services which applicants can tender as evidence of fingerprinting.

Besides completing the Marijuana Hospitality Business License Application Form, an applicant must also determine their suitability for the license before application submission. To achieve this, the MED provides applicants with two different "finding of suitability application forms." The first is the Marijuana Finding of Suitability Application Form - Owner Entity for any entity that holds a minimum of 10% interest of the marijuana business owner's interest. Such entities include an executive or qualified institutional investor with 30% or more of the business and any affiliate or entity with authority to exercise control of the marijuana business. The other form is the Marijuana Finding of Suitability Application Form - Natural person. Any natural person who holds at least 10% interest of the marijuana business owner's interest must complete this form. Such persons include managers, executive officers, or other individuals who can exercise control of the business.

A license applicant must submit the appropriate suitability application form (completed) with the Marijuana Hospitality Business License Application Form and other supporting documentation to the MED. The MED requires any applicant who completes the owner entity suitability form to fill out the natural person suitability form and attach it with their application submission.

When applying for a marijuana hospitality and sales business license in Colorado, an applicant must ensure that the proposed municipality of operations allows the establishment of marijuana businesses. If they apply to the MED while their proposed municipality does not permit marijuana establishments, the Division will deny their application. The MED updates a list of local authorities in Colorado that allow marijuana businesses in their jurisdiction periodically.

Like every other regulated business in Colorado, the MED requires marijuana hospitality and sales businesses to obtain a state tax license. As such, a marijuana license applicant must get the one suitable for their proposed marijuana business. They must equally fulfill specific state and federal employment requirements specified by the Colorado Department of Labor and Employment (CDLE). The CDLE provides an employer checklist to assist new business entrants in the state, including marijuana business licensees.

Before submitting application forms and supporting documentation, applicants must pay all required application and license fees. The MED requires them to raise separate checks for any fee meant for the local jurisdictions in which they intend to run their business. The proof of payment must accompany their application submissions via mail to any of the following MED's offices:

Marijuana Enforcement Division

1697 Cole Blvd., Suite 200

Lakewood, CO 80401

Northern Regional Office

Marijuana Enforcement Division

275 South Main Street, Suite 101

Longmont, CO 80501

Western Slope Regional Office

Marijuana Enforcement Division

632 Market Street, Suite G3

Grand Junction, CO 81505

Southern Regional Office

Marijuana Enforcement Division

2447 North Union Boulevard

Colorado Springs, CO 80909

Applicants who wish to hand-deliver their applications can do so 8:00 a.m. and 5:00 p.m., Mondays through Fridays at the Lakewood office of the MED located at:

1697 Cole Boulevard, # 200

Lakewood, CO 80401

Typically, the MED approves or denies a submitted marijuana license application between 45 and 90 days after receiving it.

What Restrictions and Limitations Apply to Marijuana Hospitality and Sales Business Establishments in Colorado?

HB 19-1230 permits the patrons of marijuana hospitality and sales business establishments in Colorado to consume the marijuana purchased from such establishments on their licensed premises. However, the bill restricts certain activities on the premises of licensed marijuana hospitality and sales business establishments and places some limitations on their operations. These include:

• Prohibition of the consumption of alcohol and smoking of tobacco or tobacco products
• Restriction of entry into their licensed premises by persons under 21 years of age
• Prohibition of the sale of retail marijuana or marijuana products containing nicotine
• Prohibition of the use of matches, butane torch, butane lighter, or any device using liquid petroleum gas if forbidden by local laws
• Prohibition of multiple marijuana sales transactions to one customer in a day to avoid overshooting the daily sales limit per person set by the Marijuana Enforcement Division (MED)
• Restriction of on-duty establishment's employees from consuming marijuana in the business licensed premises
• Prohibition of the distribution of free marijuana samples by anyone within the establishment's licensed premises
• Prohibition of the sales and consumption of marijuana on the establishment’s licensed premises between 2:00 a.m. and 7:00 a.m., Mondays through Sundays

How Much Does a Marijuana Hospitality and Sales Business License Cost in Colorado?

The emergency rules adopted by the Colorado Department of Revenue (DOR), effective July 1, 2021, outline the costs of obtaining marijuana business licenses in the state. According to these rules, the total cost of getting a Colorado marijuana hospitality and sales business license is $7,440, a breakdown of which is a $5,000 application fee and a $2,440 license fee. The Marijuana Enforcement Division (MED) requires applicants to split the total cost between the state and the local government. They must pay $4,940 to the state, while $2,500 goes to the local jurisdiction they propose to operate their marijuana and hospitality and sales businesses. The total cost of renewing this license is $2,130 annually; licensees pay $300 for the renewal application fee and $1,830 as the license renewal fee.

Typically, the MED will not process a license application or renewal request until the requisite payment is made. The acceptable means of payment by the MED include checks and money orders. The Division does not accept cash payments for either new license applications or renewals. License applicants or holders (for those seeking renewals) must make their checks or money orders payable to the Colorado Department of Revenue. Alternatively, they can settle these fees via credit card authorization. The MED also offers applicants and licensees an online payment solution via a Colorado Interactive Payment System. The MED usually advises persons who opt for the online payment option with payment links via email once the Division receives such applications.

Can Marijuana Hospitality and Sales Business Licensees Hold Other Cannabis Licenses in Colorado?

It is not clearly stated by House Bill 19-1230 if marijuana hospitality and sales business license holders can obtain other marijuana licenses in Colorado. The bill, however, prohibits them from engaging in the manufacture of retail marijuana products or medical marijuana-infused products. Cannabis hospitality and sales business licensees are also not eligible for the Colorado marijuana testing license.