Is Colorado Ready to Accept Marijuana Tourism?
Marijuana Stocks, Finance, & InvestingUncategorized October 3, 2019 MJ Shareholders
Colorado’s tourism industry has had a complicated relationship with cannabis since the state legalized the plant in late 2012. National hospitality businesses remain scared to touch a federally prohibited substance, while a state law banning public pot consumption has kept the majority of out-of-state dispensary shoppers without somewhere to legally light up.
But that tide may finally be turning.
A bill legalizing social pot consumption permits for qualified businesses passed the Colorado Legislature in the 2019 session, opening up new opportunities for cannabis users and entrepreneurs alike; the law will take effect at the beginning of 2020. Meanwhile, Governor Jared Polis appointed Wanda James, a cannabis advocate and dispensary owner, to the state tourism board in August.
These moves point to a more welcoming landscape in Colorado for cannabis tourism.
“Restrictions in law regarding open and public consumption have raised challenges regarding visitors in our state,” Dominique Mendiola, state Marijuana Enforcement Division deputy director, explained during a September 30 panel at the Colorado Governor’s Tourism Conference. “Things like outdoor patios, rooftops — things like spas and other things we’re accounting for as we write these [social consumption] regulations.”
Since voters approved Amendment 64 legalizing recreational cannabis in 2012, just two local governments — the city councils of Colorado Springs and Denver — have approved regulations for social pot use businesses. And because of the restrictions on public pot use established by Amendment 64 as well as a state law banning public smoking and vaping of tobacco and cannabis, most hotels shy away from allowing social pot use. And now the few lodgings that had allowed vaping are no longer able to.
“As of July, we’re not to have smoking rooms, and vaping is banned indoors, so that changes the landscape,” MARS Hospitality executive and Colorado Tourism Board member Tammie Thompson-Booker told the panel. “But we are going to give them a place to go.”
Hotels interested in allowing pot use will likely have to apply for a common-use consumption area, according to Polis’s deputy legal counsel, Courtney Krause, as the regulations tied to the new law probably won’t allow for consumption within private rooms — though the final regulations haven’t yet been officially completed, she noted.
We do know that the new pot law will allow dispensaries, restaurants, hotels, music venues and other businesses to apply for social pot use permits. But there are some catches: Local governments must still opt in to the program, and no establishment allowing pot use will be able to sell alcohol at the same time.
James, who was also on the panel, pointed out that Colorado has already fallen behind states like California in reforming social pot use laws, despite Colorado being the first state with a commercial pot industry. “The whole social consumption idea is something we really need to figure out. We immediately turn around and make people criminals for something we invited them to do here legally,” she said, adding that many of those people cited or arrested for cannabis use are people of color.
Giving tourists a place to safely consume a product that’s legal to purchase in Colorado is just one of the cannabis-related issues that the state’s tourism industry faces. Advertising restrictions, consumer stereotypes and education are all obstacles that have yet to be fully dealt with. And then there is confusion surrounding the legality of hemp and CBD.
Although CBD-infused products for human consumption are still technically illegal and largely unregulated nationwide, Colorado laws legalizing recreational cannabis and hemp-infused foods have set up a much more mature and safe market compared to those of most states, Krause said, giving Colorado another opportunity to build rare or unique business models.
“With CBD, there is just such a lack of consistency,” Krause added. “We consider the hemp in Colorado to be of a safe level — just wanted to put that out there.”
But hotels and recreational services that advertise to out-of-staters remain wary of mentioning anything about cannabis in their promotional content because of federal and state advertising restrictions around cannabis, as well as strict policies at social giants such as Facebook and Instagram against cannabis and CBD. Within Colorado, limited advertising opportunities exist in media outlets that can prove at least 70 percent of their audience is at least 21, but those advertisements can bring issues if they make it outside of the state. And billboard advertising remains banned for pot companies.
New rules passed as part of a sunset law overhauling commercial marijuana regulations will loosen some of those restrictions and allow for more consumer education materials, Mendiola said, but those new rules won’t be official until 2020.
“It provides this darkness,” Krause said of the current rules surrounding pot advertising. “And as you’re seeing right now with some of the vaping, in darkness comes a black market.”
Colorado isn’t totally devoid of fun activities and places to toke for cannabis consumers. In fact, the Colorado Tourism Office now has a cannabis-related training program for hotel concierges, providing them information on how to educate visitors about cannabis laws and consumption science. There are also several cannabis-friendly tourism services, social consumption establishments and campgrounds in Colorado that operate under club models and as private properties.
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