Pubdate: Tue, 10 Jun 2014
Source: Denver Post (CO)
Copyright: 2014 The Denver Post Corp
Author: John Ingold


The Businesses All Have Outstanding Licence Applications.

Denver officials could soon shut down as many as 41 medical marijuana
businesses as the city cleans up outstanding license applications that
have been pending for years.

All medical marijuana businesses in the city must be licensed by July
1, and the city has sent letters to dozens of businesses ahead of the
deadline, warning that they must cease operations if they don't get
their licenses by then.

"Failure to comply may result in law enforcement and administrative
action," cautioned a letter sent to the businesses last week.

Ashley Kilroy, Denver's coordinator for marijuana policy, said city
officials have also visited the businesses - mostly cultivation
facilities - to urge them to finish up the licensing process.

"We hope that they'll be in compliance and, if not, we'll have to
figure out how we go about enforcing the order to cease operations,"
she said.

The issue reaches back to the genesis of Colorado's regulated
marijuana industry. Marijuana businesses in Colorado need both a state
and local license to operate.

When state and city officials began licensing medical marijuana shops
in 2010, they allowed stores and affiliated businesses that were
already operating to stay open while their applications were being
reviewed. In regulatory parlance, such businesses were "operational

Dozens of businesses remained in that licensing limbo for years, and
state and city regulators have only in the past year significantly
chipped away at the backlog. When Denver officials sent a letter about
the July 1 deadline earlier this year, it went to 101 businesses that
still needed a city license.

That number is now down to 41, though almost none of them are
stand-alone businesses. Three of the still-unlicensed businesses
applied to make marijuana-infused products. The remaining 38 are
cultivation facilities that are attached to already-licensed stores.

For instance, the Little Brown House dispensary on South Broadway has
two business applications - for a grow and a products-making facility
- - on the list, even though the dispensary storefront is licensed. A
woman who identified herself as a manager at the store but refused to
give her name said Monday the business is wrapping up inspections that
were left over when the company was sold to a new owner.

"We'll be open on July 1," the woman said.

State officials, too, have addressed their licensing backlog in recent

Nearly 100 businesses were operating with pending state applications
in Colorado late last year. That number dwindled to only eight by this
spring. A spokeswoman for the state Department of Revenue could not
provide a tally for the current number of operation-pending businesses.

As the state backlog shrunk, regulators denied a larger percentage of
the applications - including several for businesses embroiled in
allegations of criminal conduct.

Earlier this year, Conley Hoskins, the owner of several medical
marijuana businesses involved in a state grand jury indictment, sued
the Marijuana Enforcement Division, arguing he was denied due process
in his license denials. Last week, a judge in Denver dismissed the
lawsuit because Hoskins had not first exhausted all administrative

Other applicants, though, have complained they were denied a state
license for comparatively minor problems. Brooke Schott, who ran the
Burnzwell dispensary in Denver with her husband, said the state
Marijuana Enforcement Division denied her store's applications by
citing violations like inadequate security camera coverage or
operating procedures. When her husband tried to fix the problems,
Schott said state regulators ignored the effort.

Schott said she and her husband plan to appeal the denial, though a
hearing date has not yet been set. Burnzwell also received a letter
from Denver about its local licenses. Right now, Burnzwell is closed,
Schott said.

"We would have been able to finish our (city) permits," she said. "But
with the state not letting us go forward, we're not going to be able
to meet that, either."

"We're probably going to end up bankrupt over it."
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