Additional license types currently in the law include:
Cannabis Dispensary: businesses that intend to retail medical cannabis to qualifying patients will require a dispensing license
How to start cannabis growing legally in Colorado
Cannabis Grower/Cultivator: this license is for entities that wish to grow medical marijuana plants from seed or clone, to flower and finish. Growers wishing to provide clones, but who do not intend to flower or finish plants, may apply for a specialty nursery license.
From the legislative perspective, the inclusion of the “distributor” model was a necessary compromise to address the trust deficit with people who do not believe the cannabis industry is effectively and consistently self-regulating.
Currently there are two sides of Colorado cannabis businesses, medical and retail, and the state allows the below businesses to operate legally within the state:
Cannabis Transporter: business intending to transport medical marijuana from one licensed facility to another.
Like 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.
The bill authorizing recreational marijuana delivery services went into effect in January 2021. However, as is the case with most, if not all, marijuana legislation in Colorado, local governments were given wide discretion on how to implement it. Denver, for example, has made recreational delivery licenses available only to Social Equity Applicants until 2024.
Marijuana Product Manufacturer
After a completed MED Regulated Marijuana Business License Application is submitted, and the required fees paid, the state has 45 to 90 days to respond. If the state approves the application, it will be forwarded to the local governments listed therein. The specific local government’s response times vary but can be as long as six months.
How to Open a Recreational Cannabis Dispensary
To 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:
Local governments may forbid cannabis companies or certain locations, so check city and county regulations.
Testing lab: Consumers and regulators alike demand consistency and quality control in cannabis products, which creates demand for marijuana testing labs. These labs use methods like liquid or gas chromatography to analyze products for CBD and THC content, pesticides, terpenes, bacteria, fungi, and heavy metals, to name a few. Colorado cannabis testing facilities have to have a laboratory director on staff who has a valid Colorado M.D. license.
Application fees: Applying for a cannabis business license in Colorado costs $1,000 for a medical cultivation business, testing lab, or infused product maker. Application fees for a medical dispensary are $5,000. Application fees are $5,000 for recreational cultivation or infused product manufacturing. Recreational testing labs have to pay $1,000 in application fees. New recreational dispensaries have an application fee of $5,000.
What to include in your business plan
Thanks to amendment 64’s passage in 2012, Colorado adults 21 and over can possess up to 1 ounce of flower or 8 grams of concentrate for recreational use. Recreational dispensary sales could hit $2.1 billion in 2021. Businesses can grow and sell medical and recreational marijuana and products, as long as edibles aren’t shaped like a fruit, animal, or person.
Inventory tracking system: Medical marijuana centers, grow operations, and testing facilities have to use an inventory tracking system that identifies, weighs, and tracks cannabis, including post-harvest waste. Plus, at least one medical marijuana business owner must be trained in administering the tracking system.
Do you need a cannabis business plan in Colorado?
Medicinal and recreational marijuana sale and use are legal in Colorado. Patients can possess up to 2 ounces of usable cannabis and grow up to six plants at home for medicinal use if they have an online certification from a doctor. More than 86,000 patients have registered for medical marijuana use, but this has decreased since recreational use became legal. Medical cannabis sales via dispensaries could be as high as $410 million in 2021.
Criminal record: Cannabis business license applicants must be of “good moral character,” can only receive investment from people also of “good moral character,” and can only employ people whose (lack of) criminal history confirms they’re of “good moral character.” Applicants also cannot have been convicted of a felony in the past five years. (See page 44 here.)