Social pot use: A cheer goes up among supporters of Initiative 300, the Neighborhood-Supported Social Cannabis Consumption Initiative, as they listen to polling updates during an election night watch party at downtown Denver bar El Charrito. (Andy Colwell, The Cannabist)

Bars just got nixed from seeking Denver social marijuana use permits

Ruling by Colorado regulators puts crimp on voter-approved Denver Initiative 300 that allows businesses to seek a permit for marijuana consumption on premises

State licensing officials delivered a blow Friday to Denver’s voter-passed Initiative 300 by announcing a new rule that will keep bars and many restaurants from applying for new social marijuana use permits.

The new regulation starting Jan. 1 will make clear that liquor licensees cannot allow the consumption of marijuana on their premises. It greatly expands the types of businesses that likely will be disqualified from applying for the new permits for on-site marijuana consumption areas when the city makes applications available in late January, as required by Initiative 300.

Already, licensed marijuana businesses, including dispensaries, can’t allow consumption on site under state law. Now add to that all bars and other businesses that serve alcohol, potentially including event venues.

Some of Initiative 300’s backers were caught off guard by the new rule, while others had state discussions on their radar. The Liquor Enforcement Division of the Colorado Department of Revenue developed the regulation administratively in recent months, and the department’s director approved it.

Marijuana legalization activist Mason Tvert, who was part of the Initiative 300 campaign, said the big restriction still leaves plenty of businesses eligible to seek Denver’s consumption permits.

“This doesn’t completely hinder the entire law,” he said. “Remember that this whole thing kind of got started with the Colorado Symphony Orchestra fundraiser that was held in an art gallery,” sparking a crackdown by the city in 2014 because of the event’s cannabis theme.

Initiative 300, which Denver voters passed in the Nov. 8 election, calls for the creation of a four-year pilot program that allows most businesses, including cafes and even yoga studios, to seek permits for separate cannabis consumption areas indoors or outdoors. Patrons must bring their own marijuana.

But applicants first must win backing from a single local neighborhood or business group, giving the outside group a chance to set operating conditions in exchange for support.

A DOR news release said discussions that led to the new rule for liquor licensees came up this summer during a series of annual stakeholder workshops that reviewed existing liquor regulations. The liquor industry raised concerns about consumption of marijuana at businesses that serve alcohol and “the need to expressly prohibit it,” the news release says.

Ron Kammerzell, DOR’s senior director of enforcement, confirmed that the rule will keep all Denver liquor licensees from taking advantage of the voter-passed ordinance.

But he said the prospect that Denver voters might pass Initiative 300 wasn’t the major impetus.

Supporters of the new rule, including the Colorado Restaurant Association and Mothers Against Drunk Driving, focused more generally on how to address the prospect that bar and restaurant patrons might use marijuana with or without explicit permission.

“The CRA, along with many other stakeholders, expressed concerns about the public dual consumption of marijuana and alcohol,” according to a statement issued by the group Friday.

Among concerns outlined by the restaurant association: possible liability for establishments if patrons mix alcohol and marijuana consumption; a lack of clarity for insurance companies that have indicated they wouldn’t insure restaurants and bars that allow pot use on site; and potential confusion for customers, business owners and police if bars and restaurants adopt a patchwork of policies toward marijuana use, perhaps by opting in to Denver’s new law.

The restaurant association supported a group called Protect Denver’s Atmosphere that campaign against Initiative 300.

Ultimately, Denver voters approved Initiative 300 with 53.5 percent support.

Tvert called the new state liquor rule “absurd” and suggested in an e-mail that marijuana was not as large a factor as alcohol in “the fights and rowdy behavior that plague LoDo every weekend at 2 a.m.,” when bars let out.

“It is astonishing that the Department of Revenue is so openly fighting a turf battle on behalf of the liquor industry,” he said. “They seem to think it’s fine for patrons of bars and concert venues to get blackout drunk, but unacceptable for them to use a far less harmful substance like marijuana instead.

“This will not prevent adults from using marijuana and alcohol at the same time, but it will ensure that the marijuana gets used out in the alley or on the street rather than inside of a private establishment.”

Denver Relief Consulting’s Kayvan Khalatbari, who led the Initiative 300 campaign, told a City Council committee in a briefing before the election that a new state rule barring marijuana use in bars might bring the benefit of alleviating any perceived concerns associated with consuming cannabis at the same time as alcohol.

The DOR’s Kammerzell said that under the new regulation, liquor licensees could fall under scrutiny and face penalties, from a warning up to revocation of their license, if they repeatedly allow marijuana consumption to occur.

After last week’s election, city officials are starting discussions about how to make Initiative 300 reality.

“We clearly will be taking this new rule into account as we assess how to implement 300,” said Dan Rowland, a spokesman for the Denver Department of Excise and Licenses.

This story was first published on DenverPost.com