Breckenridge town council votes to extend marijuana moratorium indefinitely
May 11, 2016
Breckenridge town councilmembers voted Tuesday night to extend the town's marijuana moratorium indefinitely. The ordinance passed unanimously on first reading—councilman Jeffrey Bergeron was absent, but had voiced support of an indefinite moratorium at the previous work session.
If passed on a second reading, the town would not accept applications for new marijuana licenses unless the moratorium is repealed in the future.
"The ordinance was drafted to address the upcoming expiration of the moratorium," town manager Rick Holman said, referring to the July 1 expiration date of the current moratorium. The town currently has four dispensaries located on Airport Road, for a total of a nine licenses with the state's Marijuana Enforcement Division (MED), including both medical and recreational sales, cultivations and product manufacturing.
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As it stands, the moratorium would not prevent existing licenses from transferring ownership; it would solely inhibit new licenses from entering Breckenridge's market. However, councilmembers were interested in implementing a lottery system that would apply to business owners applying for existing licenses. A Breckenridge town staff report noted these lotteries are used when there is an existing license cap.
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"Since the Breckenridge Town Council has not established a cap on new licenses, the lottery system adopted by Denver could not be similarly applied to the Town's current marijuana licensing ordinance," the report noted.
Currently, marijuana businesses must renew their licenses every year with both the state and the town. In Breckenridge, the transfer process mirrors state law: if a business is sold, the license is tied to the location, so a license change form is required to change the ownership or location of a marijuana business.
"If you want to sell your business, you can sell the business and the license is transferred with it," Breckenridge Marketing and Communications Director Kim Dykstra explained.
In the event that a license expires, per the moratorium, the town would not take applications for a new license.
"I just feel like this moratorium begs the cap question and begs the lottery question," Breckenridge town councilman Mike Dudick said. "I'm strongly opposed to us making people millionaires. We don't do that with liquor licenses and we shouldn't do it with marijuana licenses either."
He added he was concerned that an indefinite moratorium or hard cap on licenses would artificially inflate their value.
"They have the ability to go forward in a very restrictive environment with a limited number (of licenses). …they can get a boatload of money."
While councilman Eric Mamula shared the same sentiment, he believed an indefinite moratorium would not inflate the value of licenses in the same way a cap would.
"There's no true value like there would be with a hard cap," Mamula said.
Based on the concept of a license cap that passed the Denver City Council in April, an open application process would allow eligible applicants to enter a blind lottery for the chance to open recreational or retail marijuana establishments.
"If you abandon the license or lose it, then it goes into the lottery," Holman explained. However, the lottery would not apply to a direct transfer of ownership.
"It's very difficult to remove someone's right to transfer ownership," he said.
Councilwoman Elisabeth Lawrence noted the previous council had considered a license cap, but never had gotten into a full discussion of the topic.
"Here we are 18 months later. We still haven't had it," she said.
Mamula suggested first addressing the moratorium at hand, before delving into the topic of license caps.
"Let's get through this, and down the road we will give (the town) some time to look into other options, whether that be the lottery or Russian roulette at dawn," he said.
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