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First Business Licensed To Sell Recreational Marijuana

CREDIT: Associated Press
CREDIT: Associated Press

When sales of recreational marijuana become legal in Colorado January 1, at least one dispensary will be authorized to sell. A small medical marijuana dispensary in the out-of-the-way mountain town of Central City, Colo., may be the first in the country granted its license for retail sales.

Owner Erin Phillips displayed her recently issued license for retail sales on on CNBC. Her shop, called The Annie’s, will be subject to the restrictions of Colorado’s law and licensing scheme. Buyers must be 21 or older, sales are limited to an ounce per state resident, and the products must first be approved by a state testing facility.

Phillips said she had to go through a rigorous application process at both the state and local jurisdiction level. The state law not only limits who can obtain a medical marijuana license; it also includes time, place, and number restrictions on dispensaries. Many local jurisdictions have imposed their own additional requirements, and added to the 25 percent state tax approved by voters earlier this month. For this first round of applications, Colorado is only accepting those who already operate medical marijuana facilities.

It is likely The Annie’s will not be the only business operating by January 1. In its first round, Colorado saw 338 applications for retail, cultivation, and marijuana-infused products licenses in Colorado. The law requires that all applicants in this first round already be medical marijuana providers. To add recreational marijuana to her business, Phillips said she had to put several security measures in place, including training bouncers to check for fake IDs and installing magnetic ID readers.

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In Washington, the state has received at least 585 applications for marijuana producer, processor, and retailer licenses, and expects that shops could be open by May or June.

After both laws were passed by ballot initiative last November, penalties were removed for possession of an ounce or less for those 21 and older. But the true impact of these laws will not manifest until after the legal distribution regimes are in place next year, when they are expected to improve the health and safety of marijuana use, provide a new revenue source for the state, and push out violent black market sales.