Boulder's medical-pot shops struggle with 'grueling' paperwork

Boulder's medical-pot shops struggle with 'grueling' paperwork - Boulder Daily Camera

When Michael Lyttle opened up the packet to apply for a Boulder medical marijuana business license last week, he was greeted with a 22-page document that would probe the intimate details of his personal, financial and business affairs -- and test his patience.

"I feel like I can open up my own bank after doing all this work," said Lyttle, a co-owner of the Boulder Medical Marijuana Dispensary at 2111 30th St.

Following legislation passed earlier this year, medical marijuana businesses must apply for operating licenses through both the state and the municipalities in which they operate.

The deadline to apply for a state license was Aug. 1.

Boulder released its applications early last week. Most of them are due by Oct. 29, with a shorter deadline for businesses that were operating without a city sales-tax license as of June 17.

As of Wednesday, none of the estimated 100 dispensaries and greenhouses doing business in the city has turned in a completed application, which some business owners say is lengthy, complicated and expensive to put together.

"We dabble in it here and there," said Lyttle, who compared the task of researching and compiling all of the required records to "jumping through rings of fire."

The questions

A warning printed on the top of the lengthy checklist section of Boulder's application highlights Lyttle's point.

"It is recommended that you retain an attorney to assist you with this application process," the document begins.

The application also warns that all answers will be checked, and that incomplete applications will automatically be rejected. Questions include:

"Does the applicant propose to have retail sales of medical-marijuana-infused products?"

"If the applicant will grow medical marijuana, describe how applicant will offset its electrical consumption with renewable energy."

"Does the applicant have a good-neighbor plan for their location?"

Michael Lyttle, a co-owner of the Boulder Medical Marijuana Dispensary at 2111 30th St., smells a sample of marijuana while helping a customer in December. Lyttle is going through the paperwork now to apply for a medical marijuana business license from the city of Boulder.

The city also wants detailed information about the people behind the businesses, requiring background checks on anyone with as little as a 1-percent ownership interest.

Each owner and financial backer must provide a complete set of fingerprints; a list employers for the last five years; names of relatives working in the marijuana industry; details about whether they've been convicted of a crime; and detailed financial records that include investment and banking records. They can also include "evidence of rehabilitation" if they have a criminal past.

The applications also require dispensaries and growing operations to file security plans about how they intend to keep their products safe, as well as lighting plans for the outside of shops, good-neighbor plans, product-delivery plans and a general operating plan.

Lyttle, who has owned a car wash and a general contracting firm, said that "nothing was ever as intense" as applying for a medical marijuana license.

"I'm just hoping it's worth it in the long run," he said.

Good stewards

Alisa Lewis, Boulder's city clerk who is in charge of managing medical marijuana licenses, said the new process was designed to mimic what someone would go through to apply for a city liquor license.

"We are basically treating it as we would any other controlled substance, Lewis said.

She said the application process isn't designed to be difficult. Rather, it's supposed to be a detailed look at who dispensary owners are and how responsible they would be in running a business that's still considered illegal by the federal government.

"We don't necessarily have any federal or state backup on it at this point," Lewis said. "It's a matter of, 'Are you going to be a good business owner, a good steward for the industry?'"

Still, some dispensary owners say the applications are overkill.

"It's a pretty long, grueling, expensive process to say the least," said Brad Melshenker, owner of The Greenest Green, 2034 Pearl St.

Melshenker said paying for studies and upgrades to meet the city's security, lighting and other operating requirements can easily top $100,000.

The filing fee to have the city review an application is $3,000. If the license is approved, it's an additional $2,000.

Asked whether he thinks the time and money spent keeping his business legitimate will pay off, Melshenker was circumspect.

"That's what I stay up every night thinking about," he said. "I pushed all my chips in."