Marijuana trimmings are collected while plants are processed at a Denver warehouse in March 2014. (John Leyba, Denver Post file)

Plan to cap Denver marijuana biz touted as way to help neighborhoods

Denver City Council members want to replace a moratorium restricting the growth of the state’s largest legal marijuana market with caps that they argue would protect saturated neighborhoods.

In some ways, the upshot of setting location caps on dispensaries and grow houses — both citywide and within smaller geographic areas — would be similar to the recently expanded moratorium, which bars new players from entering the market.

But supporters who are hammering out details, including how to set the limits, point to key differences: The caps would allow some new business owners to dive in without increasing the number of locations. They also would offer more protection to low-income neighborhoods with industrial areas that complain about cultivation odors.

And by limiting locations, the new rules would encourage the industry to convert medical marijuana dispensaries to recreational shops, which face more regulation and charge higher taxes.

Councilwoman Robin Kniech unveiled the outlines of her ideas Monday in the council’s Marijuana Moratorium Committee. They haven’t been drafted yet into a formal proposal.

“With the citywide approach, you can move around pieces on the chess board, but you can’t add new pieces,” Kniech said.

But under her proposal, potential new entrants could apply for a lottery when existing businesses close or have their licenses revoked.

That’s not the case now. Late last year, the council extended through May 1 a 2-year-old moratorium that has allowed only businesses that had medical marijuana licenses in late 2013, a few months before retail sales began, to open recreational dispensaries, grow houses or edibles manufacturers.

The council also added a moratorium on new medical marijuana license applications. Mayor Michael Hancock’s administration had sought another two years for that expanded moratorium, but council members approved a shorter extension so they could consider permanent rules that address concerns about the industry.

The administration and representatives of the industry, and pending applicants, are finding elements to like in Kniech’s proposal, but all are waiting for more details. Some advocates say the industry should be able to grow as Denver grows.

So far, edibles manufacturers aren’t being targeted.

On Monday, 11 of the council’s 13 members took part in a discussion that found wide consensus on Kniech’s goal of creating caps, along with concerns about some details.

Those include whether to set the caps so they include dozens of still-pending applications for dispensaries and cultivation facilities, as Kniech would do, or set them lower to bar more locations than exist now — or even contract the number of locations in some areas over time.

The Denver Post reported last month that residents in some low-income areas live amid higher concentrations of marijuana businesses.

Council president Chris Herndon said the March 2 meeting will focus on getting input and reaction from the industry as well as community and issue advocates.

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