Denver tweaks marijuana delivery rules as businesses struggle to get off the ground
Marijuana delivery services in Denver will exclusively be the realm of business owners from marginalized backgrounds after the city council voted on Monday to tweak the city’s rules for the fledging wing of the cannabis ecosystem.
The city set up its framework for marijuana transporter businesses and home delivery as part of a regulatory overhaul approved by the council in April 2021. Part of the arrangement was reserving licenses for delivery businesses for social equity applicants — entrepreneurs from disadvantaged backgrounds or with immediate family members harmed by the criminalization of marijuana. That exclusivity period was supposed to last through July 1, 2024.
With the delivery wing of the industry struggling to make headway in Denver, the council on Monday night made the exclusivity permanent. Social equity applicants will be the only people eligible for delivery licenses going forward. The council also significantly reduced licensing fees for those businesses and marijuana stores that want to work with them.
The changes passed unanimously as part of the council consent agenda Monday night without discussion, signaling broad support.
The impetus for the changes, in part, was the rumblings within the industry that cannabis retailers were waiting out the exclusivity period. In the more than a year since the delivery business type became available, 14 social equity transporter businesses were approved to operate but just 18 of the city’s more than 208 stores signed up to work with them. Of those 18 stores, only nine were actively conducting deliveries as of the end of last month, according to Abbey Borchers, a policy analyst with the city’s Department of Excise and Licenses.
“We heard a lot of feedback from our social equity transporters about challenges they were seeing,” Molly Duplechian, the director of the licensing department, said at a council committee hearing on Aug. 31. “We think there is a lot of great opportunity ahead for these businesses, for these new operators, but we have identified a few areas for opportunity and changes.”
Right now, delivery sales account for less than half a percent of all cannabis purchases in Denver, Borchers told the committee. Marijuana sales across Colorado are down this year from historic highs they hit during the peak of the COVID-19 pandemic.
In addition to making the license exclusivity permanent, Monday’s vote also significantly decreased fees for new licenses and license renewals both for the social equity transporters and the stores that may partner with them.
Delivery application fees for stores, previously $500, are now $25. Annual renewals for both stores and delivery businesses are now being reduced from $2,000 a year to $25. Additional fees for transporter licenses, which go hand-in-hand with home delivery licenses, are also being lowered significantly.
Collins Buckner is the founder of Puff Pass Delivery and also sits on the board of the Colorado Cannabis Social Equity Group, an organization committed to growing the number of minority- and women-owned businesses in the industry. He spoke in favor of the code changes at last month’s committee meeting. He knew of two transporter businesses that were licensed but folded before ever getting a store to sign on to partner with them, evidence the program was not working and needed to be updated, he said.
“The program was designed to help people that have been marginalized and crushed by the war on drugs,” Buckner said. “If Denver’s city council really believes in improving social equity, I believe this is honestly the least you can do.”
Councilwoman Kendra Black supported the measure at committee and voted with the rest of the council to approve it Monday. But she expressed skepticism last month that delivery is a viable option in a city with so many retail pot shops.
“I think the problem with the teleporter license is the business model,” she said. “We’ve got 14 licenses and the size of the market, the demand, is pretty low.”
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