New Law Finally Authorizes Cannabis Cafés in Colorado, the First State to Allow Recreational Sales

Marijuana merchants, restaurants, and "mobile premises" can let customers partake if they get state and local approval.

Seven years after Colorado legalized marijuana, the state legislature has finally authorized options for people who want to use it somewhere other than private residences. A law that takes effect on Wednesday will allow cannabis consumption in specially licensed pot shops, restaurants, and other businesses, including mobile "marijuana hospitality establishments" such as tour buses. The law addresses a predicament that has long puzzled out-of-state visitors who stop by dispensaries in cities such as Denver and Pueblo, only to discover that there are virtually no places where they can legally consume the marijuana they have just legally bought.

That gap will not be filled immediately, since businesses that want to create cannabis consumption spaces have to obtain both state and local permission. The Colorado Department of Revenue's Marijuana Enforcement Division has posted a license application form, along with the relevant regulations, which take effect on January 1. But cities need not allow on-site consumption at all. Assuming that local governments go along, Coloradans should eventually see something like Dutch-style "coffeeshops" where customers can enjoy marijuana with food and beverages in a social setting.

Restaurants that serve alcohol are not eligible for the new licenses, and tobacco use will not be allowed either, although the law amends the Colorado Clean Indoor Air Act to allow pot smoking in licensed locations. Licensees have to make sure that cannabis consumption is not visible to passers-by, prevent employees from partaking, and destroy any unused products that customers leave behind. Outdoor consumption areas are allowed, provided they are surrounded by "a sight-obscuring wall, fence, hedge, or other opaque or translucent barrier," such that marijuana "is not visible from a public place without the use of optical aids, such as telescopes or binoculars, or aircraft."

Denver, where marijuana retailing is concentrated, already has a program, created by a 2016 ballot initiative, that notionally allows "cannabis consumption establishments," which may not sell marijuana but may allow customers to use marijuana they bring with them. The licensing process has been slow and arduous, however, and currently there is only one such business in the entire city: The Coffee Joint, which is next door to a dispensary. Before the new state law can have any impact in Denver, the city will have to write rules expanding what is currently allowed.

It sounds like that will not happen anytime soon, if ever. "Denver has not officially determined whether our city will opt in or opt out of the hospitality law," spokesman Eric Escudero says by email. "Our focus right now is taking steps to address social equity, so more people disproportionally impacted by the war on drugs are positively impacted by cannabis legalization." He says the city has commissioned a study of that issue, which should be completed in January or February.

"If Denver decides to go forward by creating new licenses for hospitality," Escudero says, "we believe it is vital to have improvements in our licensing process so equity applicants have an improved opportunity for greater participation in the cannabis industry," assuming "the study shows there is a lack of participation by people disproportionally impacted by the war on drugs….Our goal is to get it right and not accelerate the process based on when a state law goes into effect."

The state's allowance for "mobile premises" that could be licensed as marijuana hospitality establishments would explicitly legalize the weed-friendly tour buses that Denver entrepreneurs thought offered a way around the city's strict consumption rules. Last year Denver started cracking down on those operations. Because of such policies, Colorado has fallen behind Alaska, California, and Nevada in providing cannabis consumption options, even though it was the first state to allow recreational sales.