100+ Colorado MMJ Dispensaries Seek Recreational Marijuana Permits on 1st Day

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At least 100 medical marijuana dispensaries in Colorado queued up to submit applications for recreational cannabis licenses on the first day of the process, reflecting sizable interest in the new industry and promising to pump hundreds of thousands of dollars into state coffers.

The Colorado Marijuana Enforcement Division (MED) said it accepted 14 applications for retail centers (as well as 14 for their associated cultivation sites) on Tuesday and scheduled appointments for another 119 applicants seeking marijuana business licenses.

Most of the applicants awaiting appointments are dispensary owners looking to transition into recreational cannabis.

In total, at least 20% of medical marijuana dispensaries in the state threw their hat into the ring on Tuesday, which marked the first day Colorado began accepting applications for adult-use cannabis business licenses.

The actual number of dispensaries seeking licenses is much higher, though.

The state requires interested parties to get an appointment before officially submitting their applications, a bid to ensure the initial paperwork is complete. At the appointment, applicants can seek multiple licenses. The owner of a chain of five dispensaries, for instance, might apply for five retail marijuana shop licenses and several cultivation site licenses at one appointment. So there’s a good chance at least some of the 119 applicants who secured appointments will apply for multiple retail locations.

Additionally, dozens – if not hundreds – more will likely submit applications in the weeks to come.

Still, moratoriums and bans on recreational marijuana operations in cities across Colorado prevent many business owners from applying. And other MMJ leaders have decided not to move forward with recreational immediately, taking a wait-and-see approach.

Despite the huge profit potential – the Marijuana Business Factbook estimates that Colorado’s adult-use market will generate $500 million in sales next year – there are some notable downsides to pursuing the market.

The biggest: high taxes on adult-use sales could erode profit margins. Colorado voters will weigh in on a proposal that calls for a 10 percent sales tax on recreational cannabis and a 15 percent excise tax. Individual cities are also implementing their own taxes.

The rates are much higher than the current tax on medical marijuana. Additionally, there are still dozens of question marks surrounding the nascent recreational marijuana industry, as Colorado is navigating uncharted waters. So the risks are even higher than they are on the medical side.

It’s also not cheap. The application fee totals $500, but applicants must also pay for the actual licensing fees – which range from $2,750 for a cultivation, testing and products manufacturing permit to as much as $14,000 for a large retail store – when they apply.

Given these factors, the prudent decision for some dispensaries with lower risk tolerance and fewer financial reserves may very well be to stay the course and stick to medical.

The application process is only open to current MMJ business owners at this time. Other entrepreneurs can apply for licenses starting next fall.

Once the marijuana enforcement division “accepts” an application, the agency then begins an in-depth review and must make a final decision within 90 days under the state’s cannabis laws. Those that apply before Oct. 31 will get a decision before the end of the year, an MED spokeswoman said. That will allow them to open as early as Jan. 1 – when retail marijuana shops are allowed to launch.

Aside from the 14 retail and 14 cultivation centers, the MED also accepted an application Tuesday from an infused-products provider. Additionally, it gave the initial thumbs-down to eight applicants trying to tap the recreational cannabis market in cities that currently don’t allow recreational sales.

Daily News | Colorado Medical Cannabis Business & Marijuana Legal News | Recreational Marijuana News

 2 Comments

  1. Regina Nelson October 2, 2013
  2. Mike Vendetti October 14, 2013

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