Colorado cannabis cafes fail to cultivate clients

Apr 17, 2019

In Colorado, there are over 200 dispensaries but only two cannabis cafes. In a state that already blazed the cannabis business industry, many in the Centennial State are wondering why these so-called “pot cafes” are failing to garner more business.

Six simple words: the Colorado Clean Indoor Air Act. The Clean Indoor Air Act went into effect in 2006 and prohibits people from smoking anything inside business establishments.

Additionally, Amendment 64, the bill that legalized the recreational use of cannabis in Colorado, established regulations against the open and/or public use of marijuana. In other words, clients of dispensaries are not allowed to sample products on dispensary grounds.

[University of Colorado study on marijuana and driving pays applicants to smoke their own stash]

Unlike breweries or wineries that are allowed to operate tasting rooms, dispensaries do not have the same luxury.

Coloradans attempted to remedy the issue in 2016 with a city initiative in Denver, which would allow cannabis-entrepreneurs to own and open “pot cafes” so that customers could consume cannabis in a social setting.

Fast forward three years later, and Denver only has two licensed cannabis cafes.

Zoning issues and purchasing problems

In the initial city initiative to allow cannabis cafes, the regulations stipulated that a cafe could operate so long as it wasn’t within 1,000 feet of a school. Unfortunately, the initiative was amended to include schools, child care facilities, recreational centers, city-owned pools, and substance-abuse treatment facilities also known as rehabs.

Cannabis cafes are also not allowed to operate out of bars, due to state law. So every bar is out as an option for a storefront.

The Denver Excise Office stated that there are approximately 9,000 storefronts that currently adhere to the 1,000 foot-limit, meaning that there are 9,000 potential shops that could be serving cannabis.

Unfortunately, only five marijuana-based businesses have applied for a cafe license. One business’s application was denied, two were approved, one withdrew their application due to an issue with the applicant’s owner, and another application is still pending.

[California legislation hopes to address lag in approvals for cannabis business licenses]

Additionally, current Colorado law would prevent cannabis cafes from selling marijuana. Amendment 64 prevents marijuana businesses from allowing clients to consume cannabis products on-site.

Unlike a brewery or a winery where the business owner can sell the product that is meant to be consumed on site (alcohol), cannabis businesses are not allowed to sell their products if the product (marijuana) is going to be consumed on site.

In summation, cannabis cafes in Colorado would have to ensure that their clients purchased marijuana elsewhere before they could consume it at the cafe. Even then, clients would only be allowed to vape or eat edibles because of the Clean Indoor Air Act.

Learning from California

California, unlike Colorado, took the social aspect of smoking marijuana into consideration when it was drafting its reefer-regulations. Under California law, the Golden State’s version of Colorado’s Clean Indoor Air Act was suspended for cannabis cafes, allowing marijuana shops to have “tasting rooms”.

[Panel submits recommendations for cannabis cafés and home delivery rules in Massachusetts]

While Colorado doesn’t have any pending legislation that might waive, or at least relax, the tasting room rule or the Clean Indoor Air Act, they might be able to learn from their friendly neighbors to the west.

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