A new law in Denver, Colorado, that allows legal weed in certain bars and restaurants could give the state's "canna-tourism" industry a big boost.
On November 15th, the nation's most pot-friendly city passed Initiative 300, a first-of-its-kind measure that will allow businesses to apply for permits that grant marijuana "consumption areas" onsite.
The bill clears a path for people to smoke in Denver coffee shops, restaurants, bars, and even yoga studios with special permitting.
No one is more excited than the city's marijuana-focused hospitality groups, which offer lodging, dispensary and farm tours, and classes for open-minded out-of-staters. As more states hop on the legalization bandwagon, industry experts tell Business Insider they expect Colorado's canna-tourism revenue to dip. Initiative 300 could breathe new life into the space.
Recreational marijuana has been legal in Colorado since 2012. Until now, public use of marijuana has been banned by state law. Tourists could buy pot, but had few places to smoke it.
"Whether people like it or not, cannabis is a huge draw for tourists and there was no safe place to consume cannabis," said Truman Bradley, founder of Denver dispensary chain Southwest Alternative Care and CEO of a newly launched canna-tourism group, Seed & Smith.
"Most hotels don't want it. You can't consume it in public. So what are people going to do?" Bradley told Business Insider. "[Initiative] 300 walks the line of providing a safe place to do that, but also making sure the neighborhood organizations get a say in what's happening in their communities."
The canna-tourism industry has taken hold since legalization in 2012. Tourists dropped an estimated $100 million at recreational marijuana stores in Colorado last year. Visiting smokers made up nearly 17% of non-medical sales in the state, the Marijuana Business Daily reports.
Web searches for "marijuana tourism" has steadily increased in the US over the last 10 years, with two major spikes in traffic: in November 2012, when Colorado and Washington became the first in the nation to legalize recreational marijuana, and in January 2014, when the first non-medical dispensaries set up shop in Colorado.
Joel Schneider, a former attorney, came to Colorado in 2014 with the intention of opening a marijuana business that didn't involve growing or selling the plant. He toured radio stations, a glass-blowing factory, and media companies in search of inspiration. At night, he stood in his hotel bathroom blowing marijuana smoke into the toilet bowl to hide the smell.
It was an "ah-ha" moment for the budding entrepreneur, who wondered why he had to be so discreet in a state where marijuana is legal. Later that year, he opened a pot-friendly inn, Bud+Breakfast. While Schneider does not have a license to serve weed, he offers private spaces to consume it. There's a "wake and bake" breakfast and a "420 happy hour."
Schneider says business has plateaued since 2014, when tourists were clamoring to make reservations. The inn runs at about 75% capacity. The number of states where pot is fully legal doubled on Election Day, which Schneider worries could put a damper on tourism.
"With Nevada, California, Maine, and Massachusetts legalizing recreational marijuana, you're going to have a lot of people on the East Coast staying on the East Coast," he said.
Industry experts hope Initiative 300 will further entice canna-tourists to make the trip.
Chris Walsh, the founding editor of the Marijuana Business Daily, says Initiative 300 might help set Denver apart among the growing number of recreational markets.
"The industry in Colorado doesn't need a second wind. Recreational sales are booming," Walsh said. "But I think with the new recreational markets that are going to come online in the coming years after the election, there's a lot of worry that 'What is this going to mean? Will Colorado sales kind of stagnate?' This could ease some of those fears."
Initiative 300 lets businesses (separate from the private cannabis clubs that have cropped up) create a designated weed zone. The measure requires the owner gets permission from a local neighborhood or business group to receive a permit.
Half a dozen bars and restaurants in Denver asked since the vote was announced, to find out if they would consider creating a marijuana consumption area. Most general managers and marketing representatives said they had no immediate plans.
Jeff Greenswag, the director of operations at Denver's Trichome Institute — a marijuana trade school — expects Initiative 300 might give birth to a new type of business model, wherein music venues, art galleries, and even bowling alleys partner with neighboring dispensaries to supply pot. They then avoid the headache of applying for an extra permit to sell.
There are significant hurdles for a business to take action on Initiative 300, according to Greenswag. It has to create a designated space that is hidden from the public and from customers outside the consumption area. Getting the community's blessing will also take time.
Until then, "it's a BYOC thing, bring-your-own-cannabis," Greenswag said.