Summit County medical marijuana dispensaries react to town actions on recreational pot
August 29, 2013
Representatives in towns throughout Summit County are grappling to respect the mandate of Colorado voters while wading into uncharted territory with marijuana retail outlets.
Retail marijuana will become legal on Jan. 1, 2014, and towns must decide where they stand by Oct. 1. While retail marijuana has the potential to create a significant revenue stream for local municipalities, questions remain surrounding the regulation of these businesses.
In addition to Colorado state regulations, the towns will require a local license application for retail sales, like with medical marijuana. The town councils are currently working on an ordinance to regulate licensing.
Breckenridge, Frisco and Silverthorne seem to be taking an open, yet conservative approach to rules and regulations around retail marijuana – not banning it all together, but placing restrictions on operations within city centers, limiting the locations in which they can do business, designating specific hours of operation and enforcing rules about the way businesses conduct themselves.
Currently operating medical marijuana dispensaries will have the first chance to offer retail marijuana. But while many dispensary owners expressed interest in expanding into the retail market, they'll likely have hoops to jump through.
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The Frisco Town Council came into their meeting on Tuesday evening with what they agreed to be a solid plan regarding the rules and regulation of retail marijuana. But after hearing concerns from one of the town's two medical marijuana dispensary owners, several councilmembers expressed the desire to further explore the issue before adopting the final retail marijuana ordinance.
"I think there were some issues brought up that I don't think some of us ever even thought of," said Frisco council member Kim Cancelosi. "But I think we know that the medical people right now are doing a good job and have been in compliance."
The regulations laid out by the ordinance allow only two marijuana outlets within town limits. The businesses can be either medical or retail marijuana, or a combination of the two.
While Medical Marijuana of the Rockies owner Jerry Olson told the council he appreciated them taking current medical marijuana business owners into consideration by restricting further growth, some of the rules enumerated by the council place obstacles in his ability to expand into retail.
"It's not in the best interest of a medical marijuana patient to be around recreational people," Olson said.
"I'm not against recreational marijuana whatsoever, I just think that the product is completely different and the discussions that occur around those intentions are going to be completely different. The two communities don't want to mix all the time," he said.
Olson expressed the interest to add a retail marijuana business separate from his, but the town's regulations wouldn't support that.
The medical marijuana owner also requested the council expand the hours retail marijuana stores could operate. The Frisco ordinance contains the hours between 8 a.m. and 7 p.m. Monday through Sunday, but Olson urged councilmembers to let the stores stay open later, until about 10 p.m.
"You are going to have a lot more opportunity for revenue with the 5 percent sales tax," he said. "I did $2,200 in sales tax for Frisco in July. If I can produce enough, it could be 10 times that."
After Olson spoke, council members expressed interest in thinking over some of the issues brought up by the medical marijuana dispensary owner.
"You raise an interesting question about the hours of operations, and the number of licenses that are allowed," council member Kent Willis said.
Willis proposed further discussion before the second ordinance is passed.
Council member Tom Connolly said he thinks the zoning regulations set forth by the ordinance would successfully limit the number of marijuana outlets in town, and that he thought Olson was trying to create a monopoly for himself by asking the council to limit retail opportunities specifically to current business owners.
"To me it has to be fair to everyone," Connolly said.
Bernie Zurbriggen, a Frisco resident with a history of involvement in town government, used the meeting's public comment period to voice his opinions on the matter.
"I see this whole thing blossoming throughout the United States, and I see this as an opportunity for our community to lay some groundwork and develop a template to figure out how to do this right," Zurbriggen said.
"We can see what's bad about this thing, but I suggest we have some vision for how to make it right," he said. "I think government has a role in facilitating the ability to do it right."
Connolly addressed Zurbriggen's concerns at the close of the council meeting.
"I think we are doing it right. It's just like anything else. What are the unintended consequences these things could create? You have to think about those things."
Medical Marijuana of the Rockies owner Olson had mixed opinions after the council meeting.
"I have yet to find out if they are going to work with me," he said. "However, it was comforting hearing that people wanted to review the issue more in depth after hearing me speak."
On Tuesday, a majority of the council agreed the Breckenridge Cannabis Club will have to move from their downtown location at the end of their current lease. This change will be included in the second reading of the ordinance in two weeks. The medical marijuana dispensary, located at 226 S. Main St., has been in business since January 2010. At press time, the owner could not be reached for comment.
The ordinance also specifies no new marijuana dispensaries will be allowed in the downtown district. The ordinance has to be passed by October 1.
Organix is one of the five current medical marijuana dispensaries in Breckenridge, located north of town on Airport Road. Manager Tyler Cooper said he doesn't think it's fair to propose mandating the Breckenridge Cannabis Club move from their current location.
Under the proposed ordinance, there would be no limit to the number of licenses. But Cooper isn't worried about increased competition, since location is so restricted.
"There's only a limited number of spaces available for dispensaries," he said. "Even with unlimited licensing, we're still limited to one area."
Organix is leaning toward expanding to retail, but Cooper said he wasn't sure what kind of impact those sales might have on the town.
"It could add a lot of tourism for Breckenridge, and people will be drawn to Colorado in general," he said. "I'm not positive it'll help our city, but I don't know why people are against it. I haven't heard too much negativity."
Blue Sage Spa is located downtown right next to the Breckenridge Cannabis Club. Owner Caren Mapes said while she has no issue with retail marijuana sales personally, she could see the potential negative impact downtown.
"It might send the wrong message to tourists," she said. "It's great that it's available, but if people want it, they're going to seek it out anyway."
Mapes said she hasn't had any problems with the Cannabis Club for a neighbor, except the occasional smell.
"I'm all for [marijuana] being legalized, but I just don't think it needs to be in your face on Main Street," she said. "It might be better for us to have something more complementary to what else is in the plaza."
There will be a public hearing at the second reading of the ordinance on Sept. 10, when the Breckenridge town council will vote on the proposed changes.
At press time Silverthorne Town Council had not yet taken action on two items of marijuana-related business during its regularly scheduled meeting Wednesday. On the agenda are two ordinances; one to regulate retail marijuana business licenses in much the same way as it does for medical marijuana dispensaries and a second to propose a 5 percent excise tax on retail marijuana sales as a ballot question in November. Although action had not yet been taken, Nick Brown, owner of High Country Healing, Silverthorne's only medical marijuana dispensary, said Wednesday he's always appreciated the town's approach to marijuana issues.
"The town was very proactive with medical marijuana regulations and they're being very proactive with retail marijuana regulations as well," Brown said. "I have a very good relationship with the town and the police department. I invited them into my store from day one and showed them who I am and what I'm about."
Although the ordinance dealing with retail licenses would still need to be approved on second reading next month, Brown said he is following the ordinance and would begin looking into expanding into the retail marijuana business.
"I would keep my dispensary as well because there is still going to be a need for the medical marijuana industry to stay intact after retail establishments begin to open," Brown said. "However, there is a gigantic, pent up demand for cannabis as a whole, so I would certainly look to expand into retail as well."
Brown said he also would support a local excise tax even though a similar statewide tax initiative is being proposed to voters in November.
Funds from the local excise tax would be earmarked to offset the anticipated increase in workload for the licensing of new retail marijuana stores, DUI enforcement and mental health support services within the town.
"I would support a local excise tax in general because no one knows exactly what the costs are going to be to process licenses or for enforcement," Brown said. "I don't believe costs are going to be high, but this is ground level type stuff they're doing, so I wouldn't have a problem compensating governments to implement this thing."
The state ballot proposition will ask voters to approve a 25 percent tax on marijuana sales across Colorado — 15 percent on wholesales and 10 percent on retail sales, Brown said. Those taxes would be paid in addition to any local excise and sales taxes.
Considering Silverthorne's sales tax rate is 7.775 percent, local retail marijuana sales could be taxed at a total rate of 37.775 percent if the town's excise tax and the state's tax question are approved by voters.
"It's not an easy game, but I'm proud of what I do, I'm blessed to have a great staff that really cares about helping people and I've always believed in the plant," Brown said.