As of January 1, sections 12-24 of Colorado House Bill 19-1230 – which collectively enact rules for Marijuana Hospitality Establishments – have all gone into effect. One track of licensing permits the consumption of marijuana on-site, which is a huge win for cannabis consumers, not to mention for local businesses.  The other track permits businesses that are not dispensaries so that they may lawfully sell marijuana and THC-containing products.   

Overview of CO HB 19-1230 

At a high level, as outlined in its summary, the bill authorizes two types of spaces to be created in Colorado: Marijuana Hospitality Establishments (which the bill also refers to as Hospitality Establishments), and Retail Marijuana Hospitality and Sales Establishments (which this blog post will refer to as Retail Hospitality Establishments). The former allows for the consumption of marijuana on-site, while the latter allows for the sale of cannabis and cannabis-infused products on-site as well. And it appears that the applications for both are accepted on an ongoing basis. 

Retail food establishments may apply for a Hospitality Establishment license for a portion of their space, so long as they do not have a liquor license for the same spot. The bill also excludes these hospitality spaces from the Colorado Clean Indoor Air Act, which is a key to permitting smoking marijuana indoors.  

Another important component of this act is the role of local government – these kinds of spaces are subject to their approval and local regulations. For example, if local ordinances do not allow for the use of butane torches, liquid petroleum gas, or matches in the licensed premises, then they will not be permitted for use in either a Hospitality Establishment or a Retail Hospitality Establishment in that jurisdiction. 

Wait – I thought Colorado already allowed consumption spaces? 

Though the city of Denver already enacted rules for consumption spaces, CO HB 19-1230 creates opportunities throughout the state, all of which depend on local adoption. NOTE: The bill also, as of Jan. 1, overrides the city-defined regulations for Denver consumption spaces, meaning that those organizations must obtain a new license and comply with the new regulations or, as the bill puts it, cease operation.  

Hospitality Establishments vs. Retail Hospitality Establishments and the Legality of Mobile Consumption Spaces

There is a lot of overlap between these two kinds of spaces – primarily that they both allow for the consumption of marijuana. As such, they must follow many similar rules, as outlined in sections 44-12-408(4-6) and 44-12-409(4-7) of the bill. For example, both are expected to operate in a “decent, orderly, and respectable manner,” provide educational materials about the safe consumption of marijuana to their customers, require all employees to pass a Responsible Vendor Program training, and only permit customers who are at least 21 years of age. Neither kind of organization may allow employees to consume marijuana on the job, allow the smoking of tobacco or tobacco products, allow the consumption of alcohol, or provide free samples of marijuana or marijuana-containing products. Nor can either kind of space can be in a facility that holds another kind of cannabis-related license, such as a cultivation facility. 

Because Retail Hospitality Establishments can sell marijuana and marijuana-infused products, they have their own set of guidelines about what they can sell and how to track their inventory. In addition to not permitting alcohol or tobacco being consumed on site, these spaces cannot sell products with those ingredients either.  

One of the most significant differences between these establishments is that Hospitality Establishments CAN be mobile (44-10-103(35.5)), whereas Retail Hospitality Establishments cannot. This creates opportunities for businesses like cannabis tours or consumption spaces that can set up outside of other events. Those businesses canNOT, however, sell any marijuana or marijuana-containing products.  

A big step forward for social consumption 

All told, both of kinds of spaces outlined in CO HB 19-1230 are a major step forward for social consumption, which has been a subject of debate in many states where cannabis has been legalized. Given that it’s still illegal for someone in federal housing to consume cannabis in their home, and that building owners have the right to prohibit the use of marijuana on the premises (meaning that many apartment renters also cannot consume in their homes), many people all over the country are left with the ability to legally purchase cannabis but have nowhere legal to consume it. Colorado’s new law sets a promising stage not only for their state, but for other states where similar designations are sorely needed.