On May 29th, Colorado governor Jared Polis signed a new bill into law that could have a huge impact on the state’s growing cannabis industry. The bill, known as HB19-1090, repeals the statewide ban that prohibits publicly traded corporations from holding a marijuana license.
Why is Colorado’s new cannabis bill so important? And what does it mean for the industry moving forward? For answers to these and other questions, we reached out to someone at the center of the action.
Chuck Smith is the CEO of Dixie Brands, maker of marijuana-infused edibles, headquartered in Denver, CO; and the current board president of Colorado Leads, a pro-business alliance formed to help create a responsible and sustainable cannabis business climate.
BN: What are some of the biggest challenges facing the cannabis industry in Colorado, and how does this new bill help overcome these obstacles?
CS: Because cannabis is still illegal at the federal level, most cannabis businesses still do not have access to financial services like lines of credit or expansion oriented loans, making it very difficult to invest in and grow their business.
Up until the passage of HB19-1090, publicly traded companies, like Dixie, weren’t able to hold licenses or even invest in license holders in the state of Colorado, essentially capping growth and expansion opportunities within the state. HB19-1090 lifts some of these restrictions, providing greater investment flexibility in marijuana businesses, and subsequently, greater incentive for Colorado-based companies to grow their businesses in the state.
BN: What does this new law mean for Dixie brands, and for the CO cannabis industry in general?
CS: This is a defining moment for Colorado’s cannabis industry and a tremendous boost to Colorado’s economy. By permitting access to capital through private and public investments with the appropriate guardrails, this bill ensures that Colorado businesses keep their headquarters in the state, remain competitive, invest in research and development and other innovation, ultimately contributing significant tax dollars to the state.
With the passage of HB19-1090, Dixie intends to explore a transaction to acquire a Colorado-based licensed manufacturer. Any such transaction would be subject to successfully completing a state licensing application, as well as a review by an independent committee of Dixie’s Board. Dixie also intends to explore opportunities to expand investment in Denver-based cannabis operations, once the law is fully in place.
BN: What’s next for the cannabis industry in Colorado? Any other bills on the horizon?
CS: It’s such an exciting time for the cannabis industry in Colorado. There are a few other bills on the horizon that will truly build the industry not only in Colorado, but across the country.
Last month the Colorado Senate passed HB19-1234, which will allow licensed retailers and transporters to deliver marijuana products, including THC-infused products, to private Colorado residents. This bill puts medical marijuana delivery on track to begin permitting on January 2, 2020 and retail marijuana delivery permitting to begin on January 2, 2021.
The passing of this bill is a big win for the Colorado-cannabis industry. It not only allows for a safe and streamlined process of cannabis products, but also brings in money to the municipality where the center or store is located as a $1 dollar surcharge will be assessed on each delivery and will go to local law enforcement costs.
And HB19-1230 authorizes marijuana to be sold and consumed onsite at licensed marijuana hospitality spaces, beginning January 2020. This will provide a space where consumers can enjoy cannabis products in a safe & responsible way, similar to how they would enjoy a beer at a brewery. HB19-1230 will provide an alternative environment for cannabis consumption, outside of the streets, parks and natural land in Colorado. It will also give tourists, who visit Colorado for our marijuana liberties, a space to try a variety of products as the use of cannabis is currently prohibited in hotel rooms.