The rising tide of cannabis legalization is creating exciting new business opportunities for companies across the world. But with these opportunities comes a new consideration for cannabis entrepreneurs—where to locate your new cannabis business. Choosing a local jurisdiction can be tricky, and you should carefully consider several jurisdictions before applying for a license in any location. Some basic considerations to keep in mind when figuring out where to locate your business are as follows:
Do my city and county permit cannabis business licensing and my desired license type?
This may seem obvious, but the first question to ask is whether your proposed local jurisdiction permits cannabis business licensing at all. Colorado allows local jurisdictions to choose whether they will permit cannabis business licensing. Although most of the larger municipalities in Colorado have chosen to permit cannabis business licensing and offer a variety of license types (e.g., cultivations, dispensaries, infused-product manufacturers, etc.), there are also many towns and counties that have voted to prohibit cannabis business licenses.
“Amidst the excitement of legalization and growing acceptance of a regulated cannabis industry, it is easy to forget that some local communities are not yet fully supportive of regulated cannabis.”
Is there a range of available properties that meet the applicable zoning and distance requirements?
Colorado’s state laws impose several distance restrictions on cannabis businesses, such as requiring medical cannabis businesses to be located over 1,000 feet from schools, alcohol or drug treatment facilities, residential child care facilities and campuses of colleges, universities or seminaries. The state laws also permit local jurisdictions to change these distance restrictions and impose their own location restrictions. Predictably, most local jurisdictions impose at least a land use or zoning restriction that dictates where cannabis businesses can be located. In addition to zoning restrictions, many jurisdictions also require that cannabis businesses be located a certain distance from schools, daycares, other cannabis businesses and drug or alcohol treatment facilities. The number and severity of these zoning and distance restrictions will dictate the number of available properties at which your cannabis business can be located.
Does the local licensing authority and community support and encourage cannabis business licensing?
Amidst the excitement of legalization and growing acceptance of a regulated cannabis industry, it is easy to forget that some local communities are not yet fully supportive of regulated cannabis. To that end, it is prudent to determine whether your proposed local jurisdiction and community are supportive of the cannabis industry. Even in larger cities, resistance to regulated cannabis can lead to more stringent regulations on cannabis businesses, and consistently impact these businesses in a way that makes sustaining the business difficult. Additionally, many local jurisdictions have public hearing or community input requirements, which allow and encourage local residents and business owners to weigh in on your proposed business.
Am I able to sell my business or move my business location?
Colorado’s state laws permit cannabis business owners to sell their business or move their business location. However, some local jurisdictions prohibit the transfer of cannabis business licenses, either to another business or another location. Other local jurisdictions only permit such transfers in cases of emergency or “good cause.” You should carefully consider local laws and restrictions regarding the transferability of your license when determining whether to apply in a certain local jurisdiction.
What is the cost going to be?
Although Colorado’s state licensing authority for cannabis businesses has a set fee schedule for each type of cannabis business licenses, local jurisdictions in Colorado may set their own application and licensing fees. That means applicants must pay between $2,500 and $9,000 for a new state cannabis business license, plus anywhere from around $1,000 to $15,000 or higher in local application and licensing fees. Be sure to carefully review your local application and licensing fees to confirm the exact cost of your cannabis business license.