Authored By:  Nate Reed, Esq.

CMRE
GreenLight Group
 

Initiative 300: Denver Tackles Social Cannabis Use   

The November 2016 election results in the United States have brought about sweeping changes to the legal marijuana landscape, both at the state and local level.

In Denver, Colorado, ballot Initiative 300, also known as the Neighborhood-Supported Cannabis Consumption Pilot Program (hereby the “Consumption Pilot Program”), narrowly passed.

Initiative 300 establishes a legal framework for businesses within the city of Denver to apply for permits that will allow public marijuana consumption in designated areas on or adjacent to the business premises.

This article aims to address some of the glaring conflicts that Initiative 300 has with current Colorado state law, as well as predict how the effects of the new city ordinance will take shape. The actual impact of this newly passed ordinance remain to be seen—and may not be seen for some time—as this is entirely unprecedented territory.

It is well established that state laws generally preempt laws of local municipalities, so if state law contains explicit prohibitions, issues are raised when the voters of a municipality within that state decide they want to legalize something in contradiction to the statewide prohibition. The pertinent Colorado state statute, widely known as Amendment 64, contains a provision stating,  “Nothing in this section shall permit consumption [of marijuana] that is conducted openly and publicly.” This stands in stark contrast to the language of Initiative 300, which opens the proverbial door for “areas inside or adjacent to licensed premises or other business” to designate marijuana consumption areas.

With the passing and implementation of the Consumption Pilot Program very likely leading to legal, “open and public” consumption of marijuana in the city of Denver, it is important to remember that the Consumption Pilot Program will have no effect on the interpretation or enforceability of state law, especially the aforementioned provision of Amendment 64, and any other state criminal law on this subject.

In its infancy, we have already seen the state legislature push back against the Consumption Pilot Program. Just four days after the proponents of Initiative 300 were declared victorious, Colorado state licensing officials announced a new rule making clear that liquor licensees cannot allow marijuana consumption on their premises.

This essentially eliminates bars and the majority of restaurants from participating in this new frontier of marijuana “social-use”. However, proponents of the Consumption Pilot Program would be quick to point out that the program still potentially allows for many other businesses—ranging from cafes, to yoga studios—to apply for a permit.

This all begs the questions, why was it necessary for the state to pass this legislature specifically addressing liquor licensees and marijuana consumption? And, will any Denver businesses be allowed to move forward with plans to designate marijuana consumption on their premises in the face of the seemingly contradictory language contained in Amendment 64?

As to the first question, that particular piece of legislation was primarily championed by a coalition comprised of those concerned with the effects of simultaneously consuming alcohol and marijuana (groups such as Mothers Against Drunk Driving) and the local liquor industry voicing their desire for the people to choose alcohol over marijuana.

The concerns and desires of this coalition were apparently strong enough for the state legislature to explicitly forbid liquor licensees from partaking in the Consumption Pilot Program, but the state has thus far been quite on the issue of other businesses and ventures.  The best estimate as to why the Consumption Pilot Program will be allowed to fly in the face of Amendment 64 (with the exception of liquor licensees) is that the Initiative is very reasonably worded, full of potential “outs”, and gives a great deal of say to the people whose neighborhoods would be affected most.

Perhaps the most vital aspect of the Consumption Pilot Program is how much power it places in the hands of the community. Prior to receiving a permit, a business must receive the support and guidance of their local eligible neighborhood association. Not only do the neighborhood associations have to give their blessing to any business seeking to establish a designated marijuana consumption area, but the associations can dictate any number of specific rules and guidelines. These include, but are not limited to, requirements for training managers, restrictions on advertising, restrictions related to hours of operation, and requirements that permitted businesses provide transportation to any person consuming cannabis on the premises.

Another key component of the Consumption Pilot Program is that it will expire in 2020 unless extended by the city council or another voter initiative. Knowing there is an expiration date on this experiment likely disincentivizes the state to go after the program. The language of the Consumption Pilot Program also allows for both the City Council and the Denver Director of Excise and Licensing to implement additional restrictions or modifications to the program, including wholly discontinuing it.

Lastly, it is important to point out that the Consumption Pilot Program aims to coexist with state law on a number of issues relating to consumption of marijuana. For example, the measure points out that all businesses must comply with the Colorado Clean Air Act. This means that even if a business is permitted to allow consumption of marijuana in their premises, that smoking marijuana will not be allowed (this may lead to a spike in the purchase of vaporizers and edible marijuana in Denver, although that remains to be seen). Furthermore, the Consumption Pilot Program specifies that only person 21+ will be allowed to consume marijuana in the designated areas, a restriction that is in line with state law.

To reiterate, the Consumption Pilot Program in Denver is still incredibly new and its impact on the city and relationship with the state law enforcement is anyone’s guess. While this does create conflict between state and local municipal law, the drafters of the program appear to have gone to great lengths to ensure that the program will be implemented, as the voters of Denver intended.

Nate Reed, Esq.
VP/Broker Associate – CMRE
Manager – GreenLight Group
 
W: CMRE