As marijuana consumption licenses stall, some entrepreneurs see opportunity

Taylor Rosean has visions of opening a marijuana consumption business in Denver.

By Kristen Nichols

More than three months after setting rules for the nation’s first licensed marijuana consumption clubs, Denver has yet to receive any applications.

The stalemate has officials in other states and jurisdictions holding off on licensing consumption clubs or lounges until they see how it goes in Colorado’s capital.

Denver reglators are brushing off complaints that the rules for setting up public consumption lounges are too burdensome, even as social-use activists mull a lawsuit.

Despite all that, a few cannabis entrepreneurs are hoping the apparent standstill gives them an opportunity to be the first in Denver to open for business.

“The cannabis industry has a long history of having to deal with obstacles from regulation, and we do nothing but clear them,” said Taylor Rosean, a Denver entrepreneur who is planning to apply to open a cannabis consumption lounge where visitors could vape and dab while playing arcade-style games or video games.

Rosean’s company, Denver Easy, won’t say where it plans to site a club that Rosean intends to call Denver Vape & Play, where marijuana consumers would pay an admission fee of about $15 and be required to sign a waiver showing plans to get home safely before they’re allowed inside.

The club would not allow edibles or burned marijuana, only vaporizing, he said.

Denver Easy is currently trying to raise money and garner the neighborhood support necessary under the city’s rules to receive a cannabis club permit.

Prohibitive rules

Denver has come under fire for setting up elaborate rules for consumption clubs, which voters approved last November after years of foot-dragging by city officials on requests to permit consumption clubs or events.

Some say Denver’s rules are still too strict.

“They’re completely unworkable,” said Emmett Reistroffer, a Colorado-based marijuana industry consultant who worked on the lounge campaign last year and served on a Denver panel to set up the club rules.

Among the hurdles:

  • Prospective clubs can’t serve alcohol nor allow indoor smoking.
  • They can’t sell marijuana or share an address with a dispensary.
  • They face zoning restrictions that exceed those faced by bars.
  • They can’t advertise in a way that could be “visible from a sidewalk.”
  • They must show evidence of community support from groups approved by the city.
  • They must submit an “odor control plan,” along with policies to deal with intoxicated customers.
  • They must pay $1,000 to apply for a license, with no appeals process for a rejection.

The rules severely limit potential locations, which is why Reistroffer is considering a lawsuit.

“We’re talking about industrial areas and empty lots by the railroad tracks,” he added.

Dan Rowland, a spokesman for the Denver agency that oversees the marijuana industry, insisted that potential consumption-club owners are pursuing applications.

“Folks are still negotiating leases, gathering community support, etc.,” Rowland wrote in an email to Marijuana Business Daily.

Denver Vape & Play’s Rosean agreed, saying he thinks his company can navigate the rules in time to open in the first quarter of 2018.

Others at a standstill

The situation in Denver has other states holding off on licensing consumption clubs or lounges.

Officials with authority over the Las Vegas Strip decided last month to wait until Denver approves the nation’s first marijuana club before they further discuss licensing marijuana lounges.

In California, proposed rules to regulate the state’s marijuana industry don’t address cannabis consumption clubs.

Alaska officials are taking public comment through Oct. 27 on a proposal that would allow authorized recreational marijuana shops to provide a place for people to consume the cannabis products they buy.

And in Maine – where the voter-approved marijuana measure approved last expressly calls for consumption clubs – rules are still pending for how they would work.

So it’s no exaggeration to say marijuana regulators coast to coast are waiting to see how Denver’s clubs work – or don’t.

But Denver entrepreneurs still planning to apply say they’re up to the challenge.

“It’s our job to show this can be done responsibly,” Rosean said.

Kristen Nichols can be reached at [email protected]

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