The arrival of new recreational dispensaries bring both prosperity and uncertainty

The recreational
cannabis industry in Colorado is an ever-changing landscape. Over 100
recreational shops are getting settled in, but a handful of new dispensaries are
ready to enter the market as well. Before this July, only the owners of
previously existing medical cannabis dispensaries could apply for recreational
licenses in the state. All of these stores were also required to take part in
growing the cannabis that they sold. Now six months into recreational sales,
the tide is starting to turn and beginners are getting on board.

As of July 1,
newcomers to the industry were able to apply for business licenses. In June,
nearly 300 people had filed the optional notice with the state informing them
of their intention to apply for a license. All of these stores are opening
outside of the city of Denver, which has a moratorium that prevents newcomers
from applying until 2016. However, several of the other cities in the metro
area, such as Aurora, recently started accepting applications. Aurora is
capping the number of cannabis stores in the city at 24, and the city plans to spread
them out with only four dispensaries in each of the six City Council wards. While
many cities in the state still have bans on recreational cannabis, several have
lifted those restrictions and are accepting applications.

The new
recreational stores won’t open until October 1, or sometime thereafter.
However, that isn’t the biggest change to come during that month. As the new
businesses enter the industry, the vertical integration rules that have forced
dispensaries to generalize will be lifted. This means that for the first time, cannabis
businesses can apply to be either wholesale growers that don’t operate a
dispensary or dispensary stores that don’t have their own grow and just purchase
product from others. These changes have not yet been implemented and it is
unclear how their execution will affect the existing industry.

As new cities
prepare to add recreational stores and Colorado gets ready for a more
specialized cannabis industry, the only requirement that the state has for
applying for a recreational license is that the applicant must be a legal state
resident. However, it’s not exactly that easy. As many cities have imposed
their own laws, you can’t just open anywhere you like. Zoning restrictions
force many cannabis companies out of residential and school areas. While the
cannabis market has been booming this year, there is a lingering worry that
more recreational stores, which have been falling behind in sales, will spread
the market too thin.