Medical Marijuana License Types Available in Colorado

The follow types, or “classes,” of medical marijuana business licenses exist in the State of Colorado:

  • Medical Marijuana Center: license type necessary to operate a business that sells Medical Marijuana to Colorado Medical Marijuana Registry Patients and Transporting Caregivers. Owners of this type of facility must also own and operate at least one Medical Marijuana Cultivation and produce a minimum of 70% of all on-hand inventory as described in section 44-11-402 C.R.S.
  • Medical Marijuana Optional Premises Cultivation: license type necessary operate a cultivation business to grow and harvest Medical Marijuana. There are no Independent Medical Marijuana Optional Premises Cultivation (OPC) Licenses - these facilities must be affiliated with either a Medical Marijuana Center or Infused Product Manufacturer facility as described in section 44-11-403 C.R.S.  
  • Medical Marijuana Infused Product Manufacturer: license type necessary to operate a business that produces Medical Marijuana Infused Products such as edibles, concentrates or tinctures. These licensees are only authorized to wholesale their products to MED licensed Medical Marijuana Centers as described in section 44-11-404 C.R.S
  • Medical Marijuana Transporter: license necessary in order to provide transportation and temporary storage services to MED Licensed Medical Marijuana Businesses as described in section 44-11-406 C.R.S.
  • Medical Marijuana Operator: license type necessary in order to provide professional operational services to one or more MED Licensed Medical Marijuana Businesses as described in section 44-11-407 C.R.S.
  • Medical Marijuana Research and Development Facility or Cultivation: license necessary in order to grow, cultivate possess and transfer marijuana for use in research only as described in section 44-11-408 C.R.S.

About Colorado’s Adult-Use Program

In a historical vote, Colorado and Washington paved the way for the nation by legalizing adult-use marijuana on November 6, 2012 for those 21 and older. Since these two states paved the way, a total of six additional states and the District of Columbia have legalized adult-use marijuana (at the time of this posting in October, 2018), with more on the horizon. Clearly, the resulting business opportunities for future growth in the marijuana industry is tremendous. But there is also a plethora of Colorado cannabis growing laws, Colorado dispensary laws, and processing laws for entrepreneurs to adhere to, and those who covet a place in this highly competitive market have a much better chance of success by seeking the assistance of those who provide cannabis consulting in Colorado. Even business owners already possessing a Colorado marijuana growing license for medical purposes wanting to expand their opportunities into the recreational market now require an additional recreational cultivation business license in Colorado, and the same applies to processing and dispensing

A year after the initial Colorado recreational laws were approved, voters passed Proposition AA, adding a 10% tax on adult-use marijuana sales in addition to the 2.9% existing standard retail sales tax; the vote also added a 15% wholesale excise tax. Obviously, this has significantly increased the cost to adult-use consumers. The tax revenue, over $247 million in 2017, is allotted to fund construction of schools and to allow the Department of Revenue, which regulates and monitors marijuana retail businesses, to be fully self-supporting through the program instead of requiring state funds from outside sources.Yet the Colorado marijuana growing laws, particularly with respect to the additional taxes, haven’t thwarted Colorado cultivations entrepreneurs from seeking information on how to get a grower's license in Colorado.

In yet another ground-breaking vote, Denver voters passed Initiative 300 in 2016, which created a four year pilot program allowing businesses to apply for a Colorado cannabis license or permit to operate marijuana on-premises “consumption areas.” With the first adult-use consumption permit being issued in February, 2018 to The Coffee Joint, Denver became the first city in the country to allow regulated recreational social use. Until then, adult-use consumers were basically only permitted to use marijuana in their homes.

Here is a recap of key dates and events in legalized adult-use marijuana in the State of Colorado:

  • November 6, 2012 — Amendment 64 passed with 55.3% of Colorado voters legalizing recreational use of marijuana for adults 21 years of age and older, becoming one of the first two states in the nation (along with Washington) to do so. Entrepreneurs begin looking into how to open a dispensary in Colorado.
  • November 5, 2013 — Proposition AA passed by Colorado voters adding a 10% sales tax to retail (recreational use) marijuana in addition to the pre-existing 2.9% state standard sales tax. The proposition also adds a 15% excise tax to the wholesale price of retail marijuana.
  • January 1, 2014 — The first day adult-use marijuana was sold in accordance with the new Colorado dispensary rules and regulations.
  • November 8, 2016 — Initiative 300 passed in the city of Denver with 53.4% of the vote which calls for the creation of a four year pilot program which would allow businesses to apply for city-issued permits to create “consumption areas” for marijuana recreational users.
  • February 26, 2018 — The city of Denver granted the first marijuana social use business license to The Coffee Joint, allowing marijuana use on its premises.

About Colorado’s Medical Marijuana Program

Since the legalization of medical marijuana in Colorado in 2000, development of the program has been a long process with constant legal alterations by state courts, legislature, the Health Department, as well as the Department of Revenue. Both patients and caregivers won a long battle ensuring their rights to provide, receive, and use marijuana for qualifying medical conditions. Beginning with Amendment 20 passed in 2000, medical marijuana was legalized with the stipulation that patients can obtain medication from a recognized caregiver, possession limits were set at two ounces, and Colorado growing laws allowed up to six plants were allowed for self-cultivating.

Four years later, the Colorado Department of Health held a closed meeting and limited the number of patients a caregiver could serve to five. This decision, absent any public input, created a tidal wave of controversy from patients and caregivers alike, making patient access to medicine extremely challenging. Caregiver Sensible Colorado sued the state and won in 2007 when the judge found the DOH did not follow correct protocol for altering the laws for growing marijuana in Colorado, and the patient number restriction for caregivers was lifted. Two years later, the Department of Health held another meeting on the subject, this time open to public input and decided by a narrow margin to continue with no patient limits for caregivers, a decision which has shaped Colorado cultivation laws and increased interest in opening a dispensary in Colorado ever since.

A few months later, the Ogden Memo was issued from the federal government, suggesting that, while marijuana remains illegal, the federal government’s anti-drug resources were better used elsewhere as opposed to focusing on chronically ill patients and their caregivers who were in compliance with state and local laws. This was perceived by many entrepreneurs as an opportunity or informal permission from the federal government to segway into the medical marijuana field which later began developing into a full-fledged, highly-regulated industry with the adoption of SB 10-109, HB 10-1284, and HB 11-1043 by the Colorado state legislature in 2010 and 2011. In 2013, medical marijuana patients were reminded once again that they were still subject to federal law when the Colorado Court of Appeals upheld the ruling that employers could legally discharge employees for off-the-job medical marijuana use in Coats v. Dish Network. Yet, this ruling hasn’t stopped the “Green Rush” phenomena that has entrepreneurs scrambling to obtain a Colorado growing license, also known as a Colorado cultivation license, and information on how to own a marijuana dispensary in Colorado.

Here is a recap of key dates and events in legalized medical marijuana use in the State of Colorado:

  • November 7, 2000 — Amendment 20 is passed by 54% of Colorado voters legalizing marijuana for medical use for specified conditions only.
  • 2004 — The Colorado Department of Health conducted a closed meeting and set a five patient limit per caregiver.
  • July 10, 2007 — Sensible Colorado prevails in a lawsuit against the state of Colorado allowing caregivers to supply an unlimited number of patients with medical marijuana.
  • July 20, 2009 — The Colorado Department of Health held a meeting open to the public that resulted in no patient limit on caregivers by a margin of one vote.
  • October 19, 2009 — The Ogden Memo is issued, the gist of which stated that federal resources should not be wasted on prosecuting medical marijuana patients and caregivers who were in “clear and unambiguous” compliance with state law.
  • June 7, 2010 — The Colorado Medical Marijuana Code is enacted by the state legislature through the passage of both SB 10-109 and HB 10-1284, the most comprehensive system of medical cannabis distribution and regulation in the world to date. These bills created licensing requirements for commercial businesses in the distribution and production of medical marijuana as well as restrictions on patients, caregivers, and doctors.
  • June 7, 2011 — HB 11-1043 is signed by Governor Hickenlooper which served to clarify previously ambiguous legislation. Three of the most noteworthy changes are the required registration of caregivers to register their cultivation grow with the Colorado Medical Marijuana Enforcement Division, including more patient protection, and easing up on some of the requirements for licensed business employees.
  • April, 2013 — Coats v. Dish Network in the Colorado Court of Appeals resulted in an uphold of the ruling that employers could legally discharge employees for off-the-job medical marijuana use based on all marijuana use still being illegal by federal law.

Governing Agency/Agencies

Colorado’s Department of Revenue oversees the Marijuana Enforcement Division (MED), the authority responsible for regulating the Colorado commercial marijuana industry by developing and administering laws and regulations for both the medical marijuana and adult-use programs.

How to Work in the Colorado Marijuana Industry

The marijuana industry is one of the fastest growing industries in the United States — and the world — expected to grow by 220% in 2019 according to a new Salary and Jobs Guide published by Vangst Talent, the cannabis industry’s leading recruitment and job placement platform. The steps for earning a coveted position in the Colorado marijuana industry cultivating, processing or working within a dispensary are as follows:

  • Determine which type of occupational license you will need based on your anticipated scope of work or position. Key Employees will make operational and/or management decisions that directly impact the business. Employees handling cash, product, or determining how much of a specific strain to grow or how much inventory to produce of a specific manufactured product would require a key badge. Support Employees work within marijuana facilities, but do not make operational decisions. Examples of roles requiring a support occupational license include budtenders or trimmers. The vast majority of employees will be classified under the support employee occupational license.
  • Make an appointment. 
  • Applicants for a new occupational license must visit any of the MED offices to submit an application, have fingerprints taken, and pose for a photo placed on their occupational license badge. The MED has four offices: Lakewood, Colorado Springs, Longmont and Grand Junction. Contact the office closest to you by visiting the MED’s website.
  • Prepare payment. 
  • Key Employees will pay $250.00 for their license while Support Employees will pay $75.00 for their license. Both occupational license types are good for a period of two years and must then be renewed. 
  • Complete paper application.
  • Bring a completed Marijuana Support / Key Occupational Employee License Application. Read this packet carefully to ensure you are eligible for the Occupational License you intend to apply for with the MED.

More questions? Visit the MED’s Frequently Asked Questions page for MED Occupational Licensing.

Legislative Update

In 2014, Colorado became the first State to legalize recreational marijuana use for adults 21 years of age and older. Medical marijuana became legal in Colorado in 2000, making Colorado and Nevada, the seventh and eighth states to legalize marijuana use for medicinal purposes. Legislation continues to evolve and the current proposed legislative changes of particular interest to patients, recreational users, Colorado marijuana business owners, and entrepreneurs wanting to obtain a Colorado medical license application or learn how to open a medical marijuana dispensary in Colorado, are the revised and proposed permanent medical marijuana rules (1 CCR 212-1) released by Colorado’s Department of Revenue (DOR), Marijuana Enforcement Division on October 5, 2018 to be discussed in a formal public hearing on October 16, 2018. On the same day, the DOR issued revised and proposed permanent retail marijuana rules (1 CCR 212-2) also to be discussed at the same hearing. A red-lined version of Colorado’s proposed medical marijuana rules may be found here and for the proposed retail marijuana rules here.

Number of Existing Licenses by Colorado Marijuana License Type

According to the Colorado Department of Revenue Marijuana Enforcement Division, the following number of licenses exist by license type:

  • Medical Marijuana Dispensary Licenses (as of 10/01/2018) = 483
  • Recreational Dispensary Licenses (as of 10/01/2018) = 548
  • Medical Marijuana Cultivation Licenses (as of 10/01/2018) = 708
  • Recreational Marijuana Cultivation Licenses (as of 10/01/2018) = 739
  • Medical Marijuana Processing Licenses (as of 10/01/2018) = 242
  • Recreational Marijuana Processing Licenses (as of 10/01/2018) = 286

Associated Key Person License

The majority of individuals that intend to own a Colorado Medical or Retail Marijuana Business should apply for a MED Associated Key License, this includes each natural person, shareholder, officer, director, member, partner or Closely Held Business Entity* that is a:

  • Direct Beneficial Interest Owner* (the large majority of owners fall into this category
  • Qualified Limited Passive Investor* (owns less than 5% of the business)

Colorado statute mandates that any Colorado marijuana business owner has not been a Colorado Resident for at least one year prior to application must first submit a Pre-Suitability Application and receive approval of that application before applying for an Associated Key license.  

Once you have received approval of your Pre-Suitability application, only the first page of the Associated Key Application and your MED Pre-Suitability Approval Letter need be submitted with whatever business license application is necessary to associate you with the Colorado marijuana business of which you plan to be an owner – those options include:

  • An application(s) for a new (Medical or Retail) marijuana business license with at least a 1% owner that meets the Colorado residency requirements; or
  • A Change of Ownership Application that will add you to the ownership structure of a currently licensed Colorado marijuana business.

Permitted Economic Interest* (PEI): an individual (a natural person) that has an unsecured debt against a MED licensed marijuana business that is convertible to an ownership interest in that business. Generally, this is a promissory note, but other financial instruments may be used. Please use the Permitted Economic Interest Registration form to apply for a PEI.