Want to be in the legal pot industry in Colorado? Open your checkbook.
Colorado's pot regulators opened three days of hearings Tuesday to lay out licensing specifics before retail sales begin in January.
The proposed rules require would-be "ganjapreneurs" to pay up to $5,000 just to apply to be in the recreational pot business. Operational licenses cost another $2,750 to $14,000.
Successful applicants must also pass a gauntlet of criminal background checks and residency requirements.
The result is expected to be an industry that will have as much red tape as green leaves. Colorado is trying to show it can strictly regulate and control a drug that has been operating in the shadows for decades, despite the advent of medical marijuana more than a decade ago.
Officials say steep application fees are needed to properly screen marijuana workers, checking fingerprints and checking for recent drug felons and people with possible ties to criminal drug cartels.
Colorado will also be screening future marijuana businesses to make sure no owners live out of state, a requirement set forth by state lawmakers earlier this year. The residency requirements — which apply from owners all the way down to so-called “bud-tenders” who man the counters and measure out marijuana — are a holdover from Colorado’s existing medical marijuana industry.
The hefty operational license fees, according to state officials, are needed to pay for enforcement of the nascent industry. Plans call for an ambitious seed-to-sale tracking system in which Colorado will require video surveillance of all plants as they grow and are prepared, packaged and sold to customers.
The Department of Revenue aimed to use seed-to-sale tracking for Colorado’s medical marijuana business, but the agency ran out of money before getting the program fully operational. The Department doesn’t plan to make the same mistake twice, so operational fees are high. Retail stores will have to pay $3,750 to $14,000 a year, depending on their size. Growers will pay $2,750 a year.
Retail pot stores will also have to submit detailed floor plans to show they’re meeting security requirements. They’ll have to get surety bonds to ensure contract completion in the event of contractor default.
Once the retail stores clear all the tests for state licensing, they’re not done yet. Local governments can add their own layers of specialized licensing and zoning requirements, taking up to a year to review applications for would-be recreational pot shops. Local governments can also ban the retail sale of marijuana altogether, as many have already opted to do.