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9 Steps to Obtaining a Colorado Marijuana Cultivation License in 2024

The cannabis industry in Colorado stands out as one of the most established and regulated markets for legal marijuana in the U.S. Entering this market can accelerate your business’s growth and provide valuable insights into the standards expected of a legitimate cannabis enterprise. This guide outlines the key steps involved in obtaining a cultivation license in Colorado and ensuring ongoing compliance for your business.
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The Cannabis Market in Colorado

In November 2012, Colorado voters approved Amendment 64, which legalized and regulated recreational marijuana use [1]. Implementation of the law began in 2014, with the issuance of licenses. Since then, the marijuana industry in Colorado has experienced significant growth, with sales consistently rising each year [2].

Even the economic slowdown COVID-19 pandemic caused could not slow the industry down. In fact, marijuana sales in 2020 increased 25% to $2.19 billion when compared to 2019. Stated by NBL.

Can I Get a Marijuana Cultivation License in Colorado?

According to Walter Skulwer, oversight of the medical and retail marijuana sectors is the responsibility of the Marijuana Enforcement Division (MED) under the Colorado Department of Revenue. To apply for a license, individuals must prove at least two years of residency in Colorado and successfully pass criminal and credit background checks [3].

If you engage in the business of cultivation, dispensing, transferring, transporting, manufacturing, sales, or testing medical marijuana or retail marijuana products, you must be properly licensed according to Colorado law.

Steps to Obtaining a Colorado Marijuana Cultivation License

To get a marijuana cultivation license in Colorado, you need to follow these general steps:

  • Review the Requirements: Understand the specific requirements and regulations set by the Colorado Marijuana Enforcement Division (MED) for obtaining a cultivation license. These can include zoning, security, and operational requirements
  • Create a Business Plan: Develop a detailed business plan that outlines your cultivation operation, including the type of cultivation (indoor, outdoor, or greenhouse), planned production capacity, staffing, security measures, and financial projections
  • Form a Business Entity: Establish a legal business entity that complies with Colorado laws. This can be a sole proprietorship, partnership, corporation, or limited liability company (LLC)
  • Obtain Local Approval: Before applying for a state license, you must obtain approval from the local jurisdiction where you plan to operate. This may involve obtaining a local permit or license
  • Submit an Application: Complete the MED's application for a marijuana cultivation license. You will need to provide detailed information about your business, your proposed cultivation facility, security plans, and more
  • Pass Background Checks: You and other key individuals involved in the business will need to undergo background checks as part of the application process
  • Pay Fees: There are application and licensing fees associated with obtaining a cultivation license. The amount varies depending on the type and size of the cultivation operation
  • Comply with Regulations: Once you obtain your license, you must comply with all state and local regulations, including those related to security, record-keeping, testing, packaging, and labeling of marijuana products
  • Renew Your License: Marijuana cultivation licenses in Colorado must be renewed annually. You will need to submit a renewal application and pay the required fees

It's important to note that the process and requirements for obtaining a marijuana cultivation license can vary depending on the specific jurisdiction within Colorado. It's recommended to consult with legal counsel or a licensing specialist familiar with Colorado's marijuana laws and regulations to ensure compliance throughout the application process.

The Legalization of Marijuana in Colorado: Statistics

According to a 2021 study conducted by the National Institute of Health, the Rocky Mountain High-Intensity Drug Trafficking Area (RMHIDTA) program has published annual reports every year since 2013 tracking the impact of legalizing recreational marijuana in Colorado. The purpose is to provide data and information so that policymakers and citizens can make informed decisions on the issue of marijuana legalization [4].

Among the findings:

Section I: Traffic Fatalities & Impaired Driving

  • Since recreational marijuana was legalized, traffic deaths where drivers tested positive for marijuana increased 138% while all Colorado traffic deaths increased 29%
  • Since recreational marijuana was legalized, traffic deaths involving drivers who tested positive for marijuana more than doubled from 55 in 2013 to 131 people killed in 2020
  • Since recreational marijuana was legalized, the percentage of all Colorado traffic deaths involving drivers who tested positive for marijuana increased from 11% in 2013 to 20% in 2020

Section II: Marijuana Use

  • Past month marijuana use (ages 12 and older) increased 26% and is 61% higher than the national average, currently ranked 3rd in the nation
  • Past month adult marijuana use (ages 18 and older) increased 20% and is 62% higher than the national average, currently ranked 3rd in the nation
  • Past month college age marijuana use (ages 18–25) increased 10% and is 53% higher than the national average, currently ranked 3rd in the nation
  • Past month youth marijuana use (ages 12–17) decreased 22% and is 39% higher than the national average, currently ranked 7th in the nation

Section III: Public Health

  • Marijuana-only exposures increased 185% from 2013 when recreational marijuana was legalized compared to 2020
  • Treatment for marijuana use for all ages decreased 34% from 2013 to 2020
  • The percent of suicide incidents in which toxicology results were positive for marijuana has increased from 14% in 2013 to 29% in 2020

Section IV: Black Market

  • RMHIDTA Colorado Drug Task Forces (10) conducted 294 investigations of black market marijuana in Colorado resulting in:
    • 168 felony arrests
    • 5.54 tons of marijuana seized
    • 86,502 marijuana plants seized
    • 21 different states the marijuana was destined
  • Seizures of marijuana reported to the El Paso Intelligence Center in Colorado increased 48% from an average of 174 parcels (2009–2012) when marijuana was commercialized to an average of 257 parcels (2013–2020) during the time recreational marijuana became legalized.

Section V: Societal Impact

  • Marijuana tax revenue represents approximately 0.98% of Colorado’s FY 2020 budget.
  • 66% of local jurisdictions in Colorado have banned medical and recreational marijuana businesses.

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References:

1. https://leg.colorado.gov/sites/default/files/14_marijuanalegis.pdf
2. https://www.newburnlaw.com/setting-up-a-cannabis-business-in-colorado
3. https://www.wolterskluwer.com/en/expert-insights/commercial-marijuana-license-colorado
4.https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8672945/