LED lights are used in the flower rooms at 3-D Denver Discreet Dispensary in Denver, CO December 04, 2013. (Denver Post file photo)

New marijuana industry caps clear Denver panel as deadline looms

A proposal that would create citywide caps on stores and grow houses to protect marijuana-saturated Denver neighborhoods cleared its first hurdle Monday.

But when the City Council introduces it on the floor April 11 and takes a final vote as early as April 18, the measure isn’t guaranteed an easy ride.

A special issue committee advanced Councilwoman Robin Kniech’s proposal 9-3, but some who voted in favor — including Albus Brooks and Debbie Ortega — still had misgivings. A top concern was that the proposal would allow pending license applications for dozens more locations to be processed before the city establishes caps.

The measure, while winning mild support from some in the marijuana industry and some neighborhood advocates, also stokes worries across the board with competing visions of the city constraining businesses too much — or failing to protect residents and schools near existing clusters of businesses enough.

The council may juggle several floor amendments aimed at making big changes in the next two weeks.

After three months of discussion, the committee acted on a proposal that Kniech characterized as a true compromise — offering fairness to the marijuana industry and more protection to residents.

“What we have is a bill that has drastic new restrictions that will protect communities (and) that will for sure have some negative impact on business,” she said. “But they are important because they protect communities.”

Council president Chris Herndon said after Monday’s two-hour session that he was fast-tracking the proposal, speeding up consideration by a week because the clock is ticking. The caps and other new rules would replace a temporary city moratorium on new entrants to the medical and recreational industries that is due to expire May 1.

Herndon pushed the committee to advance the proposal, despite his opposition. Other “no” votes came from Kevin Flynn and Paul Lopez. Jolon Clark was the only member absent.

Among the major elements of the proposal are:

• The city would set caps on the number of locations for cultivation facilities and marijuana stores.

• In addition to more than 400 existing grow house and store locations across the city, those caps could include roughly 50 new locations of either type that are under consideration in pending medical and retail license applications. Supporters argue that processing those is a matter of fairness to investors, including some who testified Monday, who have sunk millions of dollars into starting those ventures already.

• No caps would apply to locations for marijuana testing facilities or edibles manufacturers.

• After pending applications are processed, the city no longer would issue licenses for new medical marijuana dispensaries or grows. But owners still could transfer their licenses to new owners. They also could add a retail license to a current location.

• Once a year, starting in 2017, the city would hold a lottery for qualified applicants for new retail stores licenses under the cap. Those available licenses would come from licenses revoked by the city or surrendered by owners when they close a location, if they don’t transfer the license to a new owner.

• New grow locations — whether opened by new licensees or those that move — must be at least 1,000 feet from schools and 1,000 feet from residential zone districts.

The last item is intended to protect neighborhoods from cultivation smells and other effects. Separately, the city’s Department of Environmental Health has proposed a sweeping odor ordinance that would set rules requiring grow houses to have odor control plans and to use scrubbing technology. The council will consider that measure in coming weeks.

Kniech estimates the new buffer rules in her proposal would reduce industrial areas where new grow locations are allowed by 60 to 70 percent, a prospect some in the industry argue is too constraining.

This story was first published on DenverPost.com