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Marijuana Business Formation

Many people are looking at the burgeoning marijuana industry as a modern-day gold rush. A business that was once exclusively associated with the criminal elements is now a respectable business enterprise. Sales of cannabis in Colorado have reached $6 billion since sales of recreational cannabis started in 2014.

Marijuana is still a very strictly regulated business. If you are looking to open a dispensary, a manufacturing facility, or a transport business for marijuana, you do not want to take the risks of forming the business yourself. Marijuana business formation can be very complicated. You want to hire attorneys that are experienced in marijuana business formation and know how to get your new business started on the right foot.

Attorney for Marijuana Business Formation in Colorado Springs

The Law Offices of Clifton Black, PC was founded nearly twenty years ago and has been at the forefront of the marijuana industry for as long as it has been legal in Colorado. Not only are the attorneys of Law Offices of Clifton Black, PC experienced and well educated on all subjects regarding marijuana business formation. Our firm founder, Clifton Black, wrote, proposed, and implemented marijuana business ordinances for the City of Colorado Springs. You could say our firm helped write the law on marijuana in Colorado Springs.

If you are looking to start your own cannabis business in Colorado, don’t take a chance and try to do it yourself. Success starts with having the right people. Success starts with hiring the expert legal counsel of Law Offices of Clifton Black, PC.


Marijuana Business Formation Resource Center:


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Basic Requirements of Marijuana Business Formation

There are a couple of general requirements when applying for a marijuana business license in Colorado Springs. First, the applicant must be 21 years of age or older. The applicant must also be in possession of a storefront where the business will be operated, and that storefront must abide by city zoning ordinances.

If you are moving to the state to seek fortune and have not been a resident of Colorado for at least a year prior to applying for a business license, you must submit a pre-suitability application. The pre-suitability application is the beginning of a background check process by the state that determines whether you are suitable to operate a marijuana business in Colorado. Eight conditions could disqualify you from obtaining a Colorado Marijuana License.

  1. If you have discharged a sentence from a controlled substance crime conviction within the past 10 years.
  2. If you have discharged a sentence for a conviction of any felony within the past 5 years.
  3. If you have not resolved outstanding delinquencies arising from judgments, taxes, or penalties from the Department of Revenue related to a marijuana business.
  4. If you are a licensed physician making marijuana patient recommendations.
  5. If your authority as a primary caregiver has been revoked.
  6. If you are under the age of 21.
  7. If you are the spouse of or a child living in the house of an employee of the Colorado Marijuana Enforcement Division.
  8. If you are a sheriff, deputy sheriff, police officer, or prosecuting officer, or an officer or employee with the marijuana state licensing authority or a local licensing authority.

There are also several unique conditions that a marijuana business must abide by. The state’s inventory tracking system must be used to track products sold. There are also labeling and packaging requirements for marijuana products that must be adhered to. Colorado further requires security and surveillance requirements for operating a marijuana business.

The other major hurdle for forming a marijuana business versus any other type of business is the type of licenses required. Each cannabis business must have all applicable state and city marijuana licenses. If a person is applying for a marijuana business license, they must also have a sales tax license.


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Marijuana Business Formation Licensing

Besides the required sales tax license, a marijuana business must be licensed for every type of work it intends to perform. So, if a business is both selling and delivering cannabis, the business must have both a retail store license as well as a retail marijuana transporter license. Even if all of the services you are looking to provide are interrelated, you still need to have the required license for each piece of your operation.

Colorado State Law authorizes the following types of marijuana business licenses.

  • Retail Marijuana Store – This is an entity that that is licensed to buy marijuana from cultivation facilities and manufacturing facilities and sell the products to consumers.
  • Retail Marijuana Cultivation – Cultivation facilities are licensed to cultivate, prepare, package, and sell marijuana to retail marijuana stores or marijuana product manufacturing facilities. They are not allowed to sell directly to consumers.
  • Retail Marijuana Products Manufacturer – Manufacturers are allowed to purchase marijuana and then manufacture, prepare, and package marijuana products. They can also sell the products to retail stores or other manufacturers but not to consumers.
  • Retail Marijuana Testing Facility – This license allows an entity to analyze and certify the safety and potency of marijuana, but it does not allow the buying or selling of cannabis.
  • Retail Marijuana Transporter – A retail marijuana transporter license only allows for the transport of retail marijuana and retail marijuana products from one retail marijuana establishment to another. The transporter license does not allow for the sale of marijuana.
  • Retail Marijuana Operator – This license allows for an entity to provide professional operational services to retail marijuana establishments.

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Marijuana Business Formation Application

You will need to apply separately for each type of license depending on what type of establishment you are looking to form. For instance, if you want to open a dispensary that grows its own cannabis, then you will need both a retail marijuana store license and a retail marijuana cultivation license.

Although each license requires its own application, the applications for each are identical. Colorado has one application for retail businesses, the aptly named Retail Marijuana Business License Application. The form packet includes several forms that must be filled out by each owner of the business. This includes authorizations that allow the IRS and the Colorado Department of revenue to release tax information regarding the applicants as well as authorizations to allow for financial background checks. The owners must also certify where it obtained funding.

Applicants must also provide certain documents. The most notable documents needed for a license application includes:

  • Documentation showing legal possession of the premises to be licensed,
  • Diagrams of the premises
  • A diagram of the security
  • Articles of incorporation or organization
  • Partnership agreements
  • Annual and biannual reports and meeting minutes if the applicant is a corporation,
  • A Certificate of Good Standing from Colorado’s Secretary of State’s Office.

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Marijuana Business Formation Resources

Colorado Marijuana License Application – The state of Colorado provides a uniform application to be licensed for any of the six authorized marijuana business types. This link will take you to the application page where you can find a brief overview of the process as well as links to the actual application itself.

Department of Revenue Marijuana Enforcement – One of the most important things for a new marijuana business to do is to make sure it is ready to comply with Colorado’s Department of Revenue rules. Following this link will take you to a PDF of the Department of Revenues rules for retail marijuana establishments.


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Marijuana Business Formation Attorney in Colorado Springs

Even just trying to read the Colorado marijuana license application form can be confusing and daunting. Applying for a marijuana retail license requires a lot of work and you would be well advised to seek out an attorney that is knowledgeable about the law and experienced in helping people build their dream businesses.

The attorneys of Law Offices of Clifton Black, PC have been helping marijuana businesses since cannabis was legalized in Colorado. We not only know the marijuana laws front and back, but we have also written and implemented some of them ourselves. Your business is your livelihood, make sure you put that livelihood in good hands. Call (719) 328-1616 to speak to our veteran marijuana business compliance attorneys and find out how we can help.


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Law Offices of Clifton Black, P.C.