Colorado Cannabis Licenses
On November 6, 2012, Colorado voters passed Amendment 64, legalizing the use and regulation of recreational cannabis. Two years later, Colorado started issuing licenses, and since then, the cannabis business in Colorado has boomed. Sales have increased every year since the market opened in 2014, and they show no signs of stopping. Even the economic slowdown COVID-19 pandemic caused could not slow the industry down. In fact, cannabis sales in 2020 increased 25% to $2.19 billion when compared to 2019. If you’re looking to get involved in this lucrative industry, we have some helpful information for you below; keep reading to learn more!
There are eight types of cannabis business licenses available in Colorado; four recreational licenses and four are medicinal licenses. A business can hold both a recreational license and a medical license, but will have to apply for each one separately.
Cannabis (Marijuana) DispensaryDispensaries are divided into two types, a retail or recreational dispensary, where customers at least assuming they at least 21 years old, and having a valid form of government ID like a driver’s license or a passport, can purchase cannabis and a medical dispensary, where customers require medical cannabis card to make purchases. While medical cards can technically be acquired by individuals over 18 but below 21, it is important to note that businesses selling both medical and recreational cannabis at a single location cannot sell to anyone younger than 21 at that location. |
Cannabis Cultivation FacilityThese businesses grow and cultivate cannabis for sale to marijuana stores or product manufacturers but cannot sell directly to consumers. A cultivation license allows such businesses to cultivate, prepare and package cannabis. Operating one of these businesses requires significant horticultural knowledge and typically requires material capital investments.
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Cannabis Product ManufacturerManufacturers are allowed to purchase cannabis and incorporate it into new products, like edibles and oil. These products are then sold to dispensaries which sell them to consumers. Cannabis product manufacturing requires a separate license and is subject to additional regulations including regular testing of the product.
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Cannabis TransporterBusinesses (or individuals) can be separately licensed to transport cannabis from one business to another, like from a Cultivation Facility to a Products Manufacturer. In addition, Colorado has recently began issuing retail cannabis delivery licenses pursuant to which delivery directly to homes and businesses will be permitted.
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Work with our expert consulting firm to get your Colorado cannabis business plans ready
Cannabis Licenses in ColoradoLike all businesses, a cannabis-focused enterprise needs to first pick and name and incorporate with the Colorado Secretary of State. Cannabis companies can use any form of entity incorporate available in Colorado including corporations, limited liability companies, or limited liability partnerships. The choice of entity type could have significant legal and tax implications so we recommend speaking with one of Newburn Law’s experienced business lawyers prior to taking this step. A consideration unique to licensed marijuana businesses in Colorado is that the Colorado Marijuana Enforcement Division (“MED”) must be kept up to date on any changes made to the trade name or any DBA (doing business as) a business may undertake. Before submitting any applications to the MED, a prospective cannabis business should have already:
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Business Fees in ColoradoTo get started in the cannabis industry, a business is going to need a substantial amount of capital. To apply for the Regulated Marijuana Business License, for example, a business will already need to possess the property where the business will be located, which could be a costly endeavor. In addition, it will also need to pay several fees to state and local governments, among them are:
These are just the initial license fees. Each license needs to be renewed annually. |
