Starting a marijuana dispensary business in Colorado is in some respects just like starting any other business. There are some important differences, however, because even though it is legal in Colorado marijuana is still illegal at the federal level. There is also a stigma attached to marijuana as something unsavory. This article will look at starting a marijuana dispensary in Colorado and the legal roadblocks and hurdles that must be overcome.
One of the first considerations of any business is selecting a name. Typically, you would choose the name you would like to use and then go to the Colorado Secretary of State website to see if it is an available name. Most businesses want to protect the name they have chosen by seeking to register a trade name or trademark.
Colorado allows a marijuana business to register a trade name and a trademark at the state level. This will prevent competitors within Colorado from using the names you have chosen for your company and for your products. What you cannot do is register your trademark at the federal level. The federal law prohibits the U.S. Patent and Trademark Office from registering trademarks for marijuana businesses.
Generally paying state taxes for your Colorado marijuana business is not an issue. However, paying federal income tax is another matter. And yes, even though marijuana is illegal at the federal level, you must pay income taxes on profits from a marijuana business. The difference in paying federal income tax is that a marijuana business cannot claim several deductions and as a result, their effective tax rate can be quite high. The Internal Revenue Service specifies that no deduction or credit for any amount is allowed for a cannabis business.
In choosing where you would like to locate your marijuana business, you will have to comply with local county and city restrictions and requirements. Colorado allows local jurisdictions to impose restrictions on the time, place, manner, and number of marijuana businesses. Colorado maintains a list of jurisdictions that allow marijuana dispensaries.
A marijuana business is highly regulated. A number of permit and license requirements exist. A plain-language summary is below in a table format for easy reference.
|What are the Relevant Statutes?||
|What Permits and Licenses are Required?||
The licensing body in Colorado is the Department of Revenue Marijuana Enforcement Division (MED).
Local approval of licensing:
State licensing for a retail dispensary
State licensing for medical dispensary
|Do I have to Allow the Inspection of Books and Records?||
|Are There Special Location Rules?||
Limited Access Area
|Who can own a Marijuana Dispensary in Colorado?||
|What Packaging and Labeling is Required?||
In a retail marijuana store the following information must be on every container 1 CCR 212-2 (R1000 series):
|What Signs and Advertisement can I Use?||
The rules for signage and advertising are contained in the Code of Colorado Regulations 1 CCR 212-2 (R1100 series).
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.
It is exciting starting up a new business. It can also be exhausting with all of the rules and regulations that you have to understand. When that business is a marijuana dispensary with all of the special state regulations and the prohibitions by the federal government, you may need help. Contact a local Colorado cannabis business attorney for guidance.