Shoppers along Main Avenue may soon have the option of buying marijuana. One local medical marijuana dispensary has begun the process to open a retail store downtown, in the 900 block of Main Avenue. Three other dispensaries have applied to convert part of their businesses to retail sales, or “co-locate.” city officials estimate the stores could be open in three months./File photo by Steve Eginoire

Stay on target

Despite challenges, retail marijuana shops likely to open by end of the year

by Tracy Chamberlin

As business owners looking to open retail marijuana stores in Durango closed in on the finishing line, another matter materialized. This time it was about Mixed-Use Neighborhoods.

During the City Council Study Session on Tues., July 8, some residents – including those involved with the Boulevard Neighborhood Association and CHEN, Citizens for Healthy Established Neighborhoods – expressed concerns over allowing retail marijuana stores in some Mixed-Use Neighborhoods that have both residential and commercial buildings.

JusttheFacts What: Public Hearing on retail marijuana regulations and Mixed-Use Neighborhoods When: Tues., July 29, 6:30 p.m. Where: City Hall Council Chambers, 949 E. 2nd Ave. For info: www.durangogov.org

The idea of petitioning for a referendum to stop any retail stores from opening in such neighborhoods caused some confusion.

Currently, one ordinance addresses all the rules and regulations for retail marijuana in the city, including things like hours, application processes and in what zones they can operate.

If a referendum was submitted by those who object solely to zoning, the entire ordinance would be suspended. “If you petition for a referendum, it suspends the entire ordinance,” City Manager Ron LeBlanc explained.

In order to avoid what LeBlanc called an unintended consequence, the council can repeal the existing ordinance, which encompasses all retail rules and regulations, and reenact a series of three to four separate ordinances.

One will address the bulk of the existing rules, like hours, application and buffer zones. The others will contain language that addresses Mixed-Use Neighborhoods.

According to LeBlanc, the council can break these up into three separate zones: MUN-1, MUN-2 and MUN-3, and address each area separately.

This approach would allow businesses applying for licenses outside Mixed-Use Neighborhoods to continue the process while the council addresses the other concerns. 

Council plans to take on this recent development at a special meeting, scheduled for 6:30 p.m. Tues., July 29, when it will hold a public hearing on whether or not to allow retail marijuana in Mixed-Use Neighborhoods. 

Currently, only the eight existing medical marijuana businesses in Durango can apply for retail licenses. Everyone else will have to wait until the Jan. 1, 2015 to join the fledgling industry.

As of press time, three local medical marijuana dispensaries had applied to convert part of their businesses to retail sales, or “co-locate.” One had started the process to open a retail store downtown, separate from its medical dispensary.

In La Plata County, one cultivation facility, which supplies a dispensary in Aspen, has already converted a portion of its business from medical to retail. As far as Deputy County Attorney Todd Weaver knows, it does not supply any local dispensaries.

Both city and county officials, though, are anticipating more applications in the future. “We expect to have all eight apply for retail,” LeBlanc said.

Jonny Radding, owner of Durango Organics, one of the three businesses that chose to co-locate, said the medical side of marijuana is a big part of his business.

With a setting that can house both medical and retail sales, along with a desire to continue to serve medical patients, he chose to house both under the same roof. “Our loyalty is really to our medical patients,” he added.

The Acceptus Group, the first to apply for a limited-use permit with the City on July 1 is looking to open in the 900 block of Main Avenue. 

Only one retail business is allowed per block in the Central Business District. Whether or not to allow any retail marijuana stores in the downtown area was a point of contention between community members and the council.

City Councilor Christina Rinderle was the lone vote in opposing retail marijuana shops downtown, saying she didn’t want to experiment with an already vibrant downtown. “While I voted for Amendment 64 … my feeling was that our downtown is very healthy,” Rinderle explained in an email. 4

With sales taxes up, the community just coming out of the recession and the family friendly image and strong tourism of Main Avenue, she said she felt the potential costs outweighed the possible benefits.

“That said, the majority of Council was for it, and as a Council we move forward together,” she said. “We were able to restrict one retail shop per street segment, and given this shop pursuing a second story location on Main Avenue, my concerns have been diminished.”

According to Nicol Killian, planning manager with the City’s Community Development Department, it should take about three months for the doors to open at retail establishments within the city.

“We’re hoping it’ll take a couple of months,” Radding said of his expected opening. “The city (application process) will take the longest.”

The County expects to start processing applications for retail businesses and facilities on Tues., July 15, according to Weaver.

Durango Organics has a grow facility located within La Plata County and a dispensary within the city limits, so, it needs to comply with the rules and regulations for both entities.

With fees and expenses in the thousands of dollars, it’s a costly process.

The first step with the city is to apply for a Limited-Use Permit, which costs $350. After that, the business needs to go through the State of Colorado Marijuana licensing process, the City Clerk’s Marijuana licensing process and the Local Licensing Authority process.

It’s a similar situation with La Plata County, which charges an operational fee of $3,500, which is refunded if the applicant doesn’t get the license.

On top of that is the application fee with the state, adding another $5,000, half of which goes to the county.

Not everyone, staff and commissioners, were in agreement on the fees. Therefore, it’s something the commissioners are going to revisit each year.

In the end, it will take thousands of dollars to open the doors for any retail establishment.

The fees and other charges associated with the application process are intended to cover the cost of time and effort to file the paperwork and perform inspections and all the other tasks associated with processing the application.

Radding thinks the fees are high, especially considering the potential for tax revenue, something he would like to see Durango and La Plata County take into consideration.

According to the Colorado Department of Revenue, between Jan. 1 - April 30, sales tax specific to retail marijuana sales, which is 10 percent, brought in almost $7 million. The excise tax, which is paid by the business not the consumer at the time of the purchase, comes to $1.8 million.

Then there’s the local and state sales taxes. The state’s portion is 2.9 percent, which meant more than $2 million from retail marijuana and $9.6 million from medical marijuana were added to Colorado coffers. None of that, however, includes the $6.6 million for licenses and fees.

The total for taxes, licenses and fees through April statewide is $27.2 million.

Although Radding considers the costs and regulations tough, he said he’s also pleased the city and county are allowing for medical and retail sales.

“At the end of the day, I’m grateful to be working with the city, working with the county,” he added, “but it is constantly an uphill battle.”