How to Start A Commercial Grow Operation in Colorado

Colorado helped lead the medical cannabis movement in the United States. It has had medical cannabis legalized since 2000, and as of November 2012, it added recreational use as well. Its medical marijuana program includes many conditions including (but limited to) chronic nervous system disorders, glaucoma, HIV/AIDS, nausea, seizures, and post-traumatic stress syndrome.

Opening a growing operation in Colorado is very similar to opening other kinds of marijuana businesses in the state, with a few slight variations. Below is what you need to know to launch a marijuana growing business in the Centennial State.

What kind of cannabis business can I open in Colorado?

In addition to growing operations (cultivators), Colorado allows the following types of businesses:

• Retail marijuana stores
• Marijuana product manufacturers
• Marijuana testing facilities
• Marijuana distributors
• Marijuana extraction services

When was cannabis made legal?

In November 2012, Amendment 64 legalized the possession and cultivation of marijuana by adults 21 and older for recreational use. Colorado had already legalized medical cannabis in 2000.

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Colorado’s marijuana market

As of May 1st, 2017, the number of Licensed Medical Marijuana Businesses in Colorado includes 520 centers, 776 cultivation centers, 250 infused product manufacturers, and 14 testing facilities.

License requirements for grow operation owners

Starting May 1st, 2016, the Denver Excise and Licenses is prohibited from processing new cannabis business licenses (including cultivation facilities). Instead, applications for these license types at new locations will be accepted via a lottery process.

Applicants who wish to enter the licensing process will have to submit a completed application form, along with supporting documents and fees to the state’s Marijuana Enforcement Division. The MED will then file a copy with the Denver Excise and Licenses who will review the validity of the submission. If rejected, applicants will receive a letter from Denver Excise and Licenses explaining the reasoning behind the state’s decision. In case of a successful outcome, the applicant will be notified that they are thereby approved to file a licensing application.

Colorado’s law allows counties and cities to set rules for both growers and sellers, meaning you may not be able to grow in certain places. Always check the local laws before you begin the process of setting up a business.

Financial and insurance requirements

Depending on location, costs for starting a marijuana growing business in Colorado can vary. Here is a detailed breakdown of all associated costs.

State fees:

• Retail Marijuana Cultivation $4,000
• Retail Marijuana Transporter (2-yr license) $4,900
• Retail Marijuana Operator $2,700
• Affiliated Interest (that is not an IBIO) $200 Commercially Reasonable Royalty Interest Holder w/more than 30% $400
• Commercially Reasonable Royalty Interest Holder w/less than or equal to 30% $200
• Permitted Economic Interest $400 Profit Sharing Plan Employee $200
• Qualified Limited Passive Investor – Limited Initial Background Check $75
• Qualified Limited Passive Investor – Full background for reasonable cause $125
• Qualified Institutional Investor $200

Local fees:

• Retail Marijuana Cultivation $2,500
• Retail Marijuana Transporter (2-yr license) $500
• Retail Marijuana Operator $500

Insurance requirements are similar to that of a standard (non-marijuana) business owner.

Resident requirements

The rules around business owner residency aren’t entirely clear in Colorado. So foreigners (and those from other states) may be able to start a growing operation in Colorado. However, the state will give preference to Colorado applicants.

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How much does a cannabis business make?

Marijuana businesses generally bring anywhere from $50,000 a year up to millions, or even tens of millions of dollars. It depends on how much you invest in it and how well you run your business, but the market is booming, so the potential for high earnings is good.

Timeframe

Allow plenty of time to start your marijuana business. Although Colorado has a well-established market, it can easily take more than a year to acquire the necessary licenses, materials, capital, and staff.

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Resources that help open a growing operation in Colorado

Looking to start a Colorado marijuana growing operation? These resources and consulting firms can help.

• Colorado State https://www.colorado.gov/
• Green Rush Consulting
• Comprehensive Cannabis Consulting https://www.3ccannabis.com/
• DispensaryPermits.com https://dispensarypermits.com/
• GreenZipp https://greenzipp.com/pages/states
• Canna Advisors https://thinkcanna.com/
• Medicine Man Technologies https://www.medicinemantechnologies.com/
• Quantum 9 Inc. https://quantum9.net/portfolio/cannabis-consulting-services/

FAQs About Starting a Colorado Marijuana Grow Operation

When has marijuana been legalized in Colorado?

Colorado has had medical cannabis legalized since 2000 and has also added recreational use as of November 2012.

How much does a marijuana business make?

In general, cannabis businesses can bring anywhere from $50,000 a year up to millions, or more. It depends on how much you invest in it and how well you run your business.

How long will it take to start a cannabis business in Colorado?

Colorado has a well-established market, but it can take more than a year to get all the necessary licenses, materials, capital, and staff.

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What are your thoughts about starting a cannabis commercial grow operation in Colorado? Leave your comments below!

Until next time,

Alice