Smoking Lounges and Hospitality Licenses

Governor Polis recently signed a marijuana hospitality bill into law on May 29, 2019 which bill has generated excitement among current license holders. While such establishments have been illegal or operating in a grey area in the past, this bill will allow the MED (Colorado Marijuana Enforcement Division) and local licensing authorities to issue licenses for facilities where customers can consume marijuana.

The bill sets up two new license types: Marijuana Hospitality Establishments and Retail Marijuana Hospitality and Sales Establishments.

Marijuana Hospitality Establishment

A Marijuana Hospitality Establishment is a facility where marijuana may be consumed but not sold. The advantage of this license type is that the facility can be mobile and customers can bring their own marijuana.

Retail Marijuana Hospitality and Sales Establishment

A Retail Marijuana Hospitality and Sales Establishment allows both consumption and sales but cannot be mobile and must only allow consumption of products sold by the facility. No outside product is permitted in Hospitality and Sales Establishments.

MED Requirements

The bill also requires the MED to create rules and regulations to govern the specifics of these businesses and allows them to begin issuing licenses after January 1, 2020. Even after MED has issued its rules and begins accepting applications, the facilities will be disallowed in most local jurisdictions by default since the bill only allows the MED to issue hospitality licenses if the local licensing authority permits such establishments to operate.
The highlights of the regulation requirements given to MED include a sales limit, a separate license for cultivation and processing, and insurance requirements.
Mobile establishments will also be subject to regulations which include vehicle registration, surveillance cameras, GPS tracking and route logging, and ventilation standards.
Other Rules
The legislature also established other regulations that do not require MED to set new rules. For example, Retail Marijuana Stores and Infused-Product Manufacturers will be permitted to sell product to marijuana hospitality and sales licenses. Retail food establishments may get licensed to allow a portion of the premises to operate as a hospitality establishment. Marijuana-infused food and other Infused-Products manufacturing will still be prohibited by these establishments. If a retail food establishment already holds a liquor license, they will not be eligible to obtain a marijuana hospitality license.

Restrictions on Retail Hospitality Establishments

There are several restrictions the bill places on Retail Hospitality Establishments. They may not engage in or permit the sale of marijuana, allow on-duty employees to consume marijuana, distribute free samples of marijuana, allow alcohol consumption, allow smoking of tobacco, allow use of butane lighters or matches if prohibited by local ordinance, permit patrons who display signs of intoxication to consume marijuana, or allow anyone under 21 years of age to enter the premises.

Restrictions on Retail Hospitality and Sales Establishments

There are also several restrictions the bill places on Retail Hospitality and Sales Establishments. These restrictions are the same as the Hospitality Establishments, with added restrictions against allowing multiple sales to the same patron when the sales may lead to the patron possessing more than the legal limit, allowing on-duty employees to consume marijuana, distribute free samples of marijuana, or sell any marijuana products that contain nicotine or alcoholic beverages.

Finally, any businesses already operating under local ordinances will be permitted to continue operating but must apply for one of these new hospitality licenses prior to December 31, 2019.

Be sure to read the full bill here:
https://leg.colorado.gov/bills/hb19-1230