DENVER, CO. 7 May, 2015. Heads up, investors hoping to join the Colorado green rush! State lawmakers approved HB 15-1379 on Tuesday, clearing the way for out-of-state investment in the uber-hot cannabis sector. As soon as January 2016, investors will be able to purchase minority ownership stakes in licensed medical and recreational cannabis businesses without having to sneak through loopholes, based upon the option to begin a two-year residency requirement. Foreign investors will remain prohibited.
Gov. John Hickenlooper, a proponent of out-of-state investment across all business sectors, is expected to sign the bill into law within the next week. The governor has also expressed concern over the black market for cannabis in the state, which undercuts the pricing and taxation structure of legally sold cannabis products and draws sales away from licensed businesses. The bill is one of a series of measures the state is likely to introduce over the next twelve months in a crackdown on black market sales. Bill author Rep. Dan Pabon, D-Denver, said in comments during the bill’s passage that marijuana should stay out of the hands of criminals and cartels and that background checks on every type of investor would help achieve this.
Marijuana Enforcement Division officials and other bureaucrats will have until Jan. 1 to formulate the requisite regulations, which will include Colorado Bureau of Investigation background checks and fingerprinting for all investors. Under the bill, only individuals (not corporations) will be permitted to invest, and direct control over the companies attracting capital must remain in the hands of Colorado residents.
Pabon said out-of-state investors can still own Colorado marijuana enterprises; they simply won’t be permitted to control them and will have to become residents in due course. Out-of-state money is already being invested in Colorado dispensaries through convoluted loopholes, Pabon said. The bill is intended to eliminate back-door investment and enable transparency by removing red tape.