Denver’s marijuana regulators are asking the City Council to expand rules that would bar any new players from entering the state’s largest market.
A two-year moratorium that allowed only existing medical marijuana businesses to open recreational dispensaries, grow houses or edible manufacturers is set to expire Jan. 1, which had given hope to entrepreneurs and investors waiting on the sidelines. But new proposals submitted Tuesday by the city’s marijuana policy office would extend that restriction another two years.
And a new proposed moratorium would bar any new medical marijuana businesses.
Itap been nearly two years since the world’s first retail marijuana shops opened, thanks to Colorado’s voter-passed Amendment 64. In that time, the older medical marijuana industry, which has been open to new entrants, continued to expand.
City officials say that with more than 1,000 businesses now open to serve the medical and retail markets — including 210 locations with dispensaries of either kind — Denver has reached what they see as a saturation point.
They want to hit a pause button. Ashley Kilroy, the marijuana policy director for Mayor Michael Hancock, said that would give officials time to continue assessing the effects of legalization before allowing further growth that could risk overproduction, potentially sending some legally produced marijuana into the black market.
“We already have an abundance of marijuana products in Denver and marijuana businesses in Denver,” she said, with the city home to about 40 percent of the state’s marijuana licenses. “Itap pretty clear that access to marijuana is not an issue.”
But the notion that Denver has reached a saturation point divides Colorado marijuana advocates.
Some question the city’s proposal to extend and expand the moratorium on new businesses, arguing city leaders should stand back and let the market decide.
“What you’re doing is the city and county is picking winners and losers in this industry,” said Tyler Henson, president of the Colorado Cannabis Chamber of Commerce. “By continuing the moratorium, itap saying that there’s something wrong with this industry, which there’s not, and itap boxing out those who want to get into this industry,” including local entrepreneurs.
Striking a different note is the Marijuana Industry Group, which also represents business owners. It said in a statement that its leaders still were looking at the details of the city’s proposals.
Executive director Mike Elliott, while saying market demand should drive expansion, didn’t dispute the city’s contention that itap nearing saturation.
“The marijuana industry has helped spark an economic boom in Denver but at this point it appears the number of businesses is in line with market demand,” he said.
Another change recommended by city policymakers to the council is to strengthen the scrutiny on new marijuana licenses of all types.
When changing locations or opening a new business, applicants would face a “needs and desires” hearing — similar to those for liquor licenses — that would assess whether a neighborhood already has enough similar businesses and whether there is a need or demand for the new one. Currently medical marijuana applicants face no hearing, and the hearings have been less stringent for new retail shops and applicants seeking to convert a license from medical to retail.
The City Council’s Business Development Committee is set to consider the proposals, including other smaller regulatory changes, on Nov. 24.
This story will be updated.
Jon Murray: 303-954-1405, jmurray@denverpost.com or @JonMurray
