With the influx of new legislation allowing more and more businesses to operate cannabis businesses in Colorado, it is crucial for business owners to understand which licenses are required in order to operate.

This article dives into the history of the legislation that has been passed to allow businesses to operate, which licenses you need, and how to go about obtaining each license.

This process can seem confusing and complex. An experienced Colorado cannabis attorney can help you every step of the way. Contact our cannabis legal team here at Newburn Law today to learn how we can help you.

History of Cannabis Legislation in Colorado

The journey to legalizing cannabis in Colorado has been going on for decades. Below we describe a few critical years where the laws changed the way cannabis businesses can operate in Colorado:

• 2000: Colorado voters approved Amendment 20, which legalized medical Cannabis.
• 2010: The Colorado General Assembly passed House Bill 10-1284, which created the Colorado Medical Marijuana Code.
• 2012: Colorado voters approved Amendment 64, which legalized retail cannabis for adult use, and this prompted the state to establish regulatory bodies to govern retail cannabis.
• 2013: The Colorado General Assembly passed House Bill 13-1217, which created the Colorado Retail Marijuana Code.
• 2015: Denver hosted the world's first Marijuana Management Symposium to provide guidance to other cities who were preparing to regulate legalized cannabis.
• 2017: The Denver Department of Public Health released its first Cannabis Environmental Best Practices Guide, which advises Cannabis cultivators on efficient water and energy use, pest control and waste minimization.
• 2018: Mayor of Denver Michael Hancock announced the Turn Over a New Leaf Program, to expunge cannabis criminal convictions for conduct that had since been legalized.
• 2020: Denver City Council passed Council Bill 20-0262, which authorized licenses for medical Cannabis research and development facilities.
• 2021: Denver City Council updated Cannabis codes to adopt social equity in cannabis licensing.

Today, cannabis businesses can operate smoothly, so long as they follow all of the proper policies and procedures that the laws mandate. Our cannabis lawyers can help ensure that you are compliant with all of the legislation that governs cannabis businesses.

Who needs a license?

Coloradans over the age of 21 are permitted to grow cannabis in their homes for personal use, without a license, but it cannot be sold.

However, any person or business seeking to grow, sell, or work in the cannabis industry for commercial purposes must apply for a license and meet the following conditions:

• Demonstrate at least 2 years of residency in Colorado at the time of license application;
• Be 21 years old or older; and
• Pass a criminal background check

It should be noted that individuals applying for and working in the Colorado Regulated Cannabis industry may be subject to Federal immigration consequences.

What type of licenses exist?

Colorado requires various licenses for each type of business. Which licenses you need will depend entirely on your operation.

Here are the licenses that exist that you show be aware of:

Marijuana Enforcement Division New Regulated Marijuana Business License: All new cannabis businesses must fill out this form properly in order to receive a new business license.

Cannabis Grower License: This applies to both medical and recreational Cannabis. Medical Cannabis is categorized in 3 classes, and the licensing fee depends on the class type and can range from $1,500 to $3,500

• Class 1: 1-500 plants
• Class 2: 500-1500 plants
• Class 3:1500- 3000 plants

Recreational Cannabis is classified in 5 tiers and the licensing fee can range from $1,500 to $6,500 depending on the tier.

• Tier 1: 1-1,800 plants
• Tier 2: 1,801-3,600 plants
• Tier 3: 3,601-6,000 plants
• Tier 4: 6,001-10,200 plants
• Tier 5: 10,201-13,800 plants

Cannabis Dispensary License: this includes retail and medical dispensaries. The total fee for retail dispensaries is $5,000. Medical dispensaries can only provide cannabis for medical patients that hold a medical cannabis card (for qualifying debilitating medical conditions) and a dispensary operation plan should be provided with the license application. The fee depends on the number of patients the dispensary serves, which falls under 3 categories:

• 300 or less patients: $9,000
• 300-500 patients: $16,000
• 500 or more patients: $22,000

Why obtaining the right licenses is Important

The license application process is expensive and can be complex. The application process requires a multitude of detailed documentation for the specific type of business, irrespective of whether you are applying for a recreational or medicinal business.

Each type of business consists of sub-categories of license types. Therefore, each sub-category has its own application procedures, addenda, and varying application and license fees.

It is critical to understand your business type and the laws governing that business type to be fully prepared to submit the right application. Otherwise incorrect or incomplete applications will not be processed, and you will not be legally authorized to run your Cannabis business.

You should work with a cannabis attorney that understands the ins and outs of your business to properly obtain the right licenses. Our team takes the time to understand your needs and ensure we obtain the right licenses for your businesses.

Fees associated with licenses

As mentioned, each type of license consists of different types of fees. The chart below provides a summary of the types of fees associated with Colorado licenses:

Check out Colorado's full schedule of fees here.

Local license fees

Each municipality and/or county may charge additional fees on top of those charged by the State of Colorado. Make certain you check with your local authorities to ensure you have paid all required licensing fees. 

Process for obtaining licenses in Colorado

To figure out which licenses you need, you will first need to determine the type of cannabis business that you will operate as.

To get started, you will need to fill and submit the Regulated Cannabis Business License Application, including any addenda required based on your entity type.

Next, you should determine which application you should submit. You can submit your application as:

1. Natural person: any person that holds 10% interest or more of the owner's share of a registered Cannabis business, this can be a Manager, Executive Officer, or any person in an executive decision-making role; or
2. Owner Entity: an entity that holds 10% or more of the owner's share of the registered Cannabis business, which can be an executive or qualified institutional investor that holds 30% or more of the registered Cannabis business.

You will then have to pay all application and licensing fees. Any applications submitted without complete fees cannot be processed.

Please note that you must send separate checks to state and local jurisdictions with the application.

For other licenses and permits, again, you will have to obtain the proper licenses and/or permits based on your cannabis operation. Below is a list of examples of operations that may need additional permits/licenses:

• Social Equity Applicants
• Delivery Operations
• Hospitality Business Licenses

How a Colorado Cannabis attorney can help

Prior to applying for the various Cannabis licenses, you must be up to date with current cannabis laws. When the Colorado legislature passes or amends laws, state agencies adopt their own administrative rules and regulations to interpret their enforcement of those laws.

Under the state legislature, local Colorado agencies have the authority to amend and repeal certain regulations. Therefore, a qualified Cannabis attorney can help you understand and navigate such laws and regulations. Failure to comply with these laws can result in consequences such as fines, citations, and loss of existing licenses.

A cannabis lawyer can also help you confirm if the local authority where you plan on operating allows for medical and/or retail cannabis businesses to operate within their jurisdiction. A lawyer can help you navigate the licensing process at both state and local levels.

Contact our legal team at Newburn Law today for a free consultation and learn how we can help you and your cannabis business!