The moratorium that delayed new businesses from entering the medical-marijuana industry for two years was lifted Sunday. Yet, officials say Coloradans shouldn't expect centers to open up at an exponential rate.
The regulation was passed in 2010 with the intention of giving the state more time to figure out how to police the then-flourishing quantity of applicants. Originally, the moratorium was set to last only a year, but in February 2011 the ordinance was extended until Sunday.
One might wonder why after two years there is not a rush to open new medical marijuana business? Thriving dispensaries face an already prevalent market, and the costs for licensing at the state and local levels exceed tens of thousands of dollars, along with strict building regulations and zoning changes.
"Medical marijuana is one of the most regulated industries in Colorado, and to comply with those regulations costs money," said attorney Josh Kappel, associate at the law firm Vicente Sederberg LLC. "I think there will be some applicants but not a lot."
Amendment 20 was passed by voters in 2000, which legalized medical marijuana in Colorado but did not specify how to set up a system of caregivers. It wasn’t until 2009, barring a range of multifaceted reasons, that medical marijuana dispensaries began popping up all over the state.
Government agencies fought to keep up with the industry. "It's the regulation catching up to what's happening on the ground," said Tom Downey, director of Denver's Department of Excise and Licenses. Downey estimates that a "couple dozen, not a couple hundred" business owners will apply in July.
The Medical Marijuana Enforcement Division will review applications, following local approval, for state licenses. Application fees will start at $7,500 and could be as high as $18,000 for the larger centers.
Julie Postlethwait, spokeswoman for the Medical Marijuana Enforcement Division, said she has no expectations for how many applications will be received on Monday as she has been receiving about three to four calls a week from interested applicants.
Postlethwait does not have an estimated time frame for application approval and said it all will be contingent on the size of the center and the number of business partners involved.
In addition, the moratorium has left those regulating the medical marijuana industry broke since their funds are supplied partially by the application fees. The unit has downsized its employees from 37 to 17, and will be cut down again to 12 by August.
As of May 31, 113 of the 552 centers currently in the application system have been licensed. 235 are still waiting on a background investigation and 229 are held up at local-authority authorization. The new applications will be added onto the end of the line.
One entrepreneur, Javier Stone, 41, already owns a nightclub and restaurant and is in line to own a medical-marijuana center. "We're here in limbo," Stone said. "We don't know what's going to happen."