Denver now appears to have more marijuana dispensaries than liquor stores, Starbucks coffee shops or public schools, according to city and corporate records.
A push by City Council members to regulate the medical marijuana industry and restrict where dispensaries can locate appears to have prompted a surge in sales-tax license applications, city officials say.
As of last week, Denver had issued more than 300 sales-tax licenses for dispensaries. That number slightly exceeds the number of Starbucks coffee shops in Denver and surrounding areas, calculated within a 50-mile radius. It is roughly twice the number of the city’s public schools. It exceeds the number of retail liquor stores in Denver by about a third.
The pace picked up, acting City Treasurer Steve Ellington said, after the council put the public on notice that restrictions are coming on where new dispensaries can set up shop. (The increase also followed an opinion from Attorney General John Suthers that medical marijuana was not exempt from sales-tax laws.)
At least 170 of the dispensaries got sales-tax licenses in December.
Ellington said his office is getting about 25 sales- tax applications a day for dispensaries.
That pace prompted the National Organization for the Reform of Marijuana Laws to recently name Denver “America’s Cannabis Capital.”
On a per capita basis, there are now slightly more medical marijuana dispensaries with a sales-tax license in Denver than there are dispensaries in the city of Los Angeles, where medical marijuana has attracted national media attention.
To receive a Denver sales-tax license, dispensaries must show they have a location where they plan to do business and must show they plan to open up within 90 days.
Possessing a license doesn’t mean a dispensary is operating, but that its owners have applied to collect taxes at a specific location within 90 days.
The state constitution’s Amendment 20, passed by voters in 2000, legalized medical marijuana. The amendment created a patient registry but did not specify how the system of “caregivers” would be set up. As a result, dispensaries have cropped up across the state, offering medical marijuana with little or no regulation or zoning.
New regulations under consideration could reshape the dimensions of the medical marijuana industry in Denver.
A majority of the Denver City Council seems intent on restricting dispensaries from locating within 1,000 feet of one another. Most council members also want to ban dispensaries from operating within 1,000 feet of schools or child-care facilities.
The council met in committee recently and grappled with determining a deadline for when those new restrictions should take effect. The committee ended up forwarding to the full council a proposal that would allow those dispensaries that had a sales-tax license on or before Jan. 1, 2010, to escape the new distance requirements.
Some council members wanted an earlier deadline, which would winnow down the number of dispensaries.
If the council moved the sales-tax deadline up to before Dec. 1, more than 100 of the dispensaries would be in violation of the new distance regulations, the treasury department determined.
Councilman Charlie Brown, who is pushing the package of regulations, said he now wants to move the active sales-tax deadline to Dec. 15 as a compromise between council members wanting a tighter deadline and those who want looser restrictions. The treasury department is preparing a new analysis that would determine how that Dec. 15 deadline would affect dispensaries.
Brown said he thinks the marketplace will end up thinning out many of those rushing to get into the dispensary business anyway and will bring the number of dispensaries down to a lower level. He adds that new criminal background checks that the council probably will require also probably will shut down some operators.
The full council is scheduled to meet Monday to give initial consideration to the regulations, which would bar people who have completed any portion of a felony sentence within the past five years from opening a dispensary.
The regulations also would bar on-site consumption of medical marijuana at dispensaries.
The council is scheduled to meet again Jan. 11 for a public hearing and final consideration of the new regulations.
– Article from The Denver Post on January 4, 2009.