Legal Weed Rules Set to Change in Colorado

The rules for legal weed are about to evolve in Colorado, and the change could lead to better access for customers.

When the state approved the first pot shops late last year, only existing medical marijuana dispensaries were given licenses. Whether they converted their medical stores into recreational shops or split the dispensaries in two, these business owners were given a head start on the licensing process.

Recreational Marijuana in ColoradoBut come July, that will change. Newcomers to the cannabis business will be allowed to seek licenses for the first time, regardless of their experience with the drug.

“We are going into uncharted territory,” said Sam Kamin, a law professor at the University of Denver. “It’s something that hasn’t happened in medical, and it hasn’t happened in recreational.”

Another current provision of the state’s pot law will also change when the first new businesses open shop in October. Recreational marijuana companies will now be allowed to specialize. No longer will the state require that dispensaries grow their own weed.

One rule will remain, however: Business owners must be Colorado residents.

By the middle of June, nearly 300 people had registered with the state as potential applicants. The records don’t specify whether businesses plan to grow pot or sell it.

Not every place in Colorado will welcome the new entrepreneurs. Denver has blocked them from locating in the city until at least 2016, while a host of other communities have banned all recreational weed. That includes Colorado Springs, the state’s second-largest city.

And local zoning rules in many places will make it harder to open the businesses that are allowed. So will the difficulties of finding suitable, legal real estate.

“It’s tough to know how many people are really going to apply, said Mike Elliott, executive director of the Marijuana Industry Group. “Running a marijuana business is much, much more difficult than it might initially appear.”

Nor is it clear that demand is strong enough to support more than a few new pot shops. Business has been booming in the retail pot industry, but sales figures are below initial predictions. If the existing stores are satisfying customer demand, it may be hard for new shops to break into the market.

Colorado Marijuana FlagThe recreational market is only about half the size of the medical market, and that too could mean fewer available customers.

“Right now, we don’t really know what the market can bear,” Elliott said.

Colorado voters legalized recreational cannabis in 2012, along with voters in Washington State. The first retail pot shops opened in Colorado Jan. 1. Legal weed has generated more than $10 million in tax revenue since the start of the year.

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