Pubdate: Sun, 01 Jul 2012
Source: Denver Post (CO)
Copyright: 2012 The Denver Post Corp
Author: Tegan Hanlon


Experts Don't Expect a Boom in Business License Applications

The moratorium that stalled market entries into the medical-marijuana 
industry for two years lifted Sunday - but officials say Coloradans 
shouldn't expect centers to pop up at an exponential rate.

The regulation was passed in 2010 in order to give the state more 
time to develop how to regulate the then booming number of 
applicants. Originally, the moratorium was set to last only a year, 
but a February 2011 ordinance extended it to Sunday.

So why, after two years, are applicants expected to take their time? 
Budding dispensaries face an already widespread market, and licensing 
costs at the state and local level exceed tens of thousands of 
dollars and are accompanied by 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."

In 2000, voters passed Amendment 20, legalizing medical marijuana in 
Colorado but not specifying how to set up a system of caregivers.

But for a range of complex reasons, it wasn't until 2009 that 
dispensaries quickly multiplied across the state. Government agencies 
struggled to chase 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.

After local approval, the Medical Marijuana Enforcement Division 
reviews applications for state licenses. Application fees range 
from$7,500 to $18,000 for the larger centers.

Julie Postlethwait, spokeswoman for the Medical Marijuana Enforcement 
Division, said she has no expectations forMonday but receives about 
three to four calls a week from interested applicants.

Postlethwait did not have an estimated time frame for application 
approval and said it's all contingent on the size and number of 
partners involved.

Meanwhile, the moratorium has left medical-marijuana enforcement 
cashstrapped, as regulators' budgets are funded in part by the 
application fees. The division has sliced its 37-person team to 17. 
That number will be down to 12 by August.

As of May 31, 113 of the 552 centers currently in the application 
system have been licensed. There are 235 waiting on a background 
investigation and 229 stalled at local-authority approval. The new 
applications will string onto the end of the line.

Javier Stone, 41, already owns a nightclub and restaurant. He's in 
the market to operate a medical-marijuana center.

"We're here in limbo," Stone said. "We don't know what's going to happen." 
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MAP posted-by: Jay Bergstrom