Cannabis Business Licensing and Regulations

Ballot questions 2A and 2B passed regarding cannabis taxes and businesses. View election results on the Election Information webpage

This page is the official source for information regarding cannabis business licensing and will be updated as new information becomes available. Interested persons will be directed to this page to receive updates.

City Council Workshop Summary

The Council has discussed cannabis businesses at several meetings and workshops prior to, and since, the municipal election. In those discussions, Council has clarified that first consideration should be given to establishing cannabis retail business (i.e. stores or dispensaries) regulations with other types of cannabis business to be considered later. Council also directed staff to solicit public input on questions related to the regulation of stores. 

City staff facilitated a public survey in May and June. The survey and response to it were designed to support the Council in determining the most appropriate response to a range of key policy decisions. The public outreach process included seven staff listening sessions and a Council listening session. 

Following public comment and numerous City Council workshop, council direction provided to date includes:

  1. Establish zoning regulations for cannabis stores that reflect the zoning of general retail sales under the existing Land Use and Development Code. Zones where general retail sales are currently permitted are the C-1 (Light Commercial), C-2 (General Commercial), B-1 (Neighborhood Business), B-2 (Downtown Business), M-U (Mixed Use), MXG-3 (Mixed-Use General), and MXOC (Mixed Use Opportunity Corridor) districts. In addition, consider the preference of the Downtown Development Authority to develop additional restrictions for Main Street between 1st Street and 8th  Street, including the prohibition of cannabis stores on the ground floor of buildings. And consider the preference of the Horizon Drive Business Improvement District (BID) to limit the number of stores within the BID to two (2) stores. 
  2. Establish regulations to include buffering from: Schools including Colorado Mesa University (CMU) and Western Colorado Community College (WCCC) (1000 feet); Parks and Park Land (500 feet); and Rehabilitation Facilities (500 feet). 
  3. Amend the Municipal Tax Code to set a 6% special cannabis sales and use tax rate. 
  4. Numerically cap the number of stores to ten (10) stores. 
  5. Create a weighted lottery system for selecting operators that includes both sufficiency and merit-based criteria. 

For more details, full Council workshop packets are available on the Agendas and Minutes webpage

Upcoming Workshops/Public Meetings/Hearings

Staff continues to work with the City’s appointed and elected officials to develop the next steps regarding cannabis licensing and permitting of cannabis-related businesses. Any consideration for the adoption of local regulations will be heard at a public hearing(s). Upon scheduling, meeting dates will be listed below:

  • December 13, 2021 Rescheduled to January 10, 2022 | City Council Workshop (City Hall Auditorium, 250 N 5th Street) | 5:30 p.m. Public comment will be accepted.

Cannabis Business Licensing

Cannabis businesses (except for testing facilities) remain prohibited land-uses under the City’s Municipal Code.

No licenses or license applications have been made available to potential cannabis business owners by the passage of this legislation. Further action by City Council would be required to license cannabis businesses. For more information, visit the official State web portal for cannabis regulations in Colorado.

Use of Cannabis Funds

The passage of 2A and 2B constitutes a new funding source to support enforcement and implementation related to the new cannabis-related businesses that will be coming to the community. Revenue from retail cannabis is also dedicated to build, operate and maintain the highest priorities in the Parks, Recreation, and Open Space (PROS) Master Plan, which was adopted by City Council on January 6, 2021. A summary of the plan, as well as the full plan, can be found on the Parks Recreation Open Space Master Plan webpage

The PROS plan, driven by community engagement, lays out over $157 million in projects and priorities for the next 8 to 10 years. Since this new revenue stream will take many months to establish, funds for the PROS projects will not be available for several months. The City will follow the regular budgetary process for considering capital projects city-wide, including parks and recreation. Priorities in the PROS plan will be folded into the 2022 budgeting process, as well as subsequent annual budgets, and the new funding source will enable deeper and more rapid progress towards those priorities.