Colorado Springs’ scattering of cannabis clubs might soon be required to obtain a new type of cannabis license — and some illegally providing marijuana could close — as part of a proposed state law that will be introduced during the next session of the Colorado General Assembly.
“The [club] license may be issued to a person who operates an establishment where retail marijuana may be consumed, but not sold or provided by the club. The club may serve food or alcohol if the licensee obtains the required state licenses. Entry to the club is restricted to those persons at least 21 years of age,” the bill summary reads.
Colorado House District 17 Rep. Catherine “Kit” Roupe conducted a stakeholder meeting Sept. 10 at Colorado Springs City Hall to discuss the proposed bill.
About two dozen people attended the meeting, including law enforcement, attorneys, lobbyists, concerned citizens, as well as cannabis club and dispensary owners from Colorado Springs and Pueblo. The group discussed the bill’s potential impact, which would require club owners to be licensed and regulated in order to curtail reported illegal sales of cannabis products inside such clubs. They had questions not only about the legitimacy of the licensing process, but also about who might fall under it and why.
“This bill doesn’t talk about what is a club, it talks about how we license individual clubs and what takes place as far as sales within a club,” Roupe told the audience.
Roupe said licensing would be done by local jurisdictions.
“If this bill were to pass and you are a club owner, to seek a license, you would go to the city of Colorado Springs,” Roupe said. “If you were in the county, you would go to the county. Each jurisdiction would have their own process and methods established to process that license.”
But there were questions. Mike Elliott, executive director of the Marijuana Industry Group, asked about the role of the state’s enforcement division.
“It looks like the idea here is to put the club license into the retail marijuana code next to the licenses for testing facilities, grows, processing, manufacturing,” Elliott said. “I guess I’m wondering, what is the authority of the Marijuana Enforcement Division, if at all?”
Colorado Municipal League’s Kevin Bommer said he also had some concerns about the bill.
“That’s one of the issues right off the bat … One of the nuances of Amendment 64 is it doesn’t create a dual licensing process. It’s a state license that hinges upon local approval. There’s no need to specify a local license because a local government can simply approve one of the remunerated types of licenses by any method … This, by displacement, [would be] a state-issued license.”
The MED currently has oversight of the retail cannabis industry, but there is no club oversight.
KC Stark, owner and CEO of Studio A64 cannabis club in Colorado Springs, argued that since he doesn’t sell cannabis products, his club should be regulated like any other private club.
“A cannabis club is not under the authority of the MED,” Stark said. “A cannabis club should be regulated just like a cigar bar under current legislation at the local level. I don’t think we have to complicate this by putting it in the MED’s authority. Private clubs have existed for hundreds of years and those rules are well established.”
Roupe said her bill is meant to address clubs selling or “trading” cannabis without oversight.
“Those who are trying to be slippery don’t want to have a license and they have everything to lose,” Roupe said. “We do this with a variety of agencies. It’s not like we’re trying to create a different class of anything. We’re trying to say: If you’re operating a marijuana club, let your local authorities know.”
If licensing is a way to regulate sales within a club — which, at the recreational level is still illegal in Colorado Springs — Stark said his club shouldn’t be part of the conversation.
“If the only thing that needs to be addressed is sales, then the MED should have no authority over us,” Stark said. “I would suggest we be treated like a retail tobacco business, a retail tobacco bar or the same rights as an airport smoking concession.”
Robert Corry, an attorney with Denver-based Corry & Associates, said the need for licensing needs to be made more clear, adding, “Obviously this bill is motivated by some concern. I think we should start off with what problem we are trying to correct. Are these clubs inherently harmful to the community? I don’t think they are. They’re operating behind closed doors.
“Is the problem that the government wants more tax revenue? … I think we need to understand what the issue is.”
Bommer said part of the issue is determining whether cannabis consumption at a club qualifies as public consumption, illegal under state law.
“What is open and public consumption?” Bommer said. “We don’t really know because the general assembly punted on defining it in 2013 and left it up to individual jurisdictions. [Club consumption is] not private consumption. But then where’s the line? I think that’s where some of these issues occur.”
Bommer said there’s an inherent Amendment 64 conflict if a license is created allowing anyone who is old enough to come in off the street and consume cannabis. Clubs would have to be selective in membership to sidestep the public consumption statute.
Roupe said while there are clubs operating within current laws, there are others using loopholes to distribute cannabis within the city, to include trading marijuana for “favors,” like tying one’s shoelaces.
“I’m not trying to create another layer,” Roupe said. “What has me concerned is … we have some bad actors. The bad actors are actually doing small amounts of sales. They advertise them on their websites. … They do it through membership fees. We’re concerned about the quality and the source and some of the controls we as a community expect to have about marijuana.”
Several attendees who work in cannabis clubs said the license could place them on a path toward legitimacy. But Corry said marijuana legitimacy is an oxymoron.
“We need to be real here,” Corry said. “Every single licensed dispensary … is committing felonies under federal law. We all know that. We deal with that reality. There are industry associations spouting about bad actors and good actors. Industry associations are committing federal felonies. They’re aiding and abetting and conspiring to violate federal law. So let’s get past this whole ‘We have to be audited and regulated and crosschecked by bureaucrats to be legitimate.’ Let’s get past good growers and bad growers, because federal law supersedes it all.”
Jayman Johnson, owner of the cannabis club Speak Easy Vape Lounge, disagreed.
“I think legitimacy is the correct term we’re looking for,” Johnson said. “I think we’re trying to move toward legitimacy on the national level, right? The only way we can do that is to continue to do things in the same aspects that other businesses would do them. If I ran a taxi service, I would need special licensing. I have to adhere to special regulations. If I want to open a restaurant, I need licensing and to follow certain regulations.
“I run a cannabis club and I’ve been looking forward to regulations for a couple years now. We voted for it to be like alcohol and we’ve missed the mark. … I think it’s time we take what the voters asked for a lot more seriously and start regulating this like alcohol. I’m perfectly fine with licensing and paying taxes. … I just find regulation needs to be reasonable. … Why not treat ourselves as seriously as we want to be treated?”