Broomfield City Council is moving forward with amending a section of Broomfield’s Municipal Code in an effort to ensure entities vying for one of Broomfield’s three marijuana licenses can only submit one application in the lottery.
After seemingly duplicated applications, the city and county getting sued by an applicant and ultimately pausing the process, the proposed amendment closes the loophole that some applicants previously used to submit more than one application.
The Council unanimously passed on first reading an amendment to the municipal code relating to marijuana applications that states an owner “and its affiliated entities” may only submit one application in the process. Previously the applications from similar businesses were accepted because they had lawfully different owners, the council memo explains.
A second reading is scheduled Jan. 11, 2022 and the ordinance would be effective seven days after publication following the final passage, the memo reads.
If the ordinance passes in January, “the City and County Clerk will redo its completeness application and reject applications from affiliated entities, offering full refunds of the application fee to those applicants,” the memo states. “The affiliated entities will be allowed to either retain one application or re-submit one application from the affiliated group no later than (a to be determined) date.”
After a yearslong process, the Council in March approved extensive mariijuana regulations which went into effect in May. During the July 2 - Aug. 31 application period, 26 applications were received. Though Broomfield Municipal Code relating to the process initially read “no person or entity shall apply for more than once license in any location in the city,” multiple applications had similar applicant names and trade names and nearly identical answers to some of the application’s questions. Of the 26 applications, 16 were submitted by four different groups, “each group submitting more than one application that was the same or substantially similar operationally, with the exception of ownership structure,” the council memo reads.
Gard Law Firm, which specializes in cannabis law and represents some of the applicants, penned two letters to Broomfield raising concerns about the seemingly duplicated applications. The firm initially alleged 13 of the 26 applications came from four ownership groups. After the city and county declined to disqualify the entities that submitted more than one application, the applicant Terrapin Care Station, through holding company Centroid Holdings Inc., filed suit Sept. 27 against Broomfield’s city and county clerk and 16 of the other 25 applicants.
The lawsuit alleged that multiple applications from the same entity violated the fairness of proceedings and deprived single-submission applicants a fair shot at one of the licenses. The suit, filed in Broomfield District Court, requested the court issue an order stopping the current process.
Less than two weeks after the lawsuit was filed, the city and county announced on Oct. 7 a temporary halt to the application process to allow staff to reassess applications.
Broomfield announced an initial pause in the licensing process for 60 days to allow “staff to reassess the submission of applications from different, but affiliated entities,” a previous update from the city and county states. “The City is in the process of considering administrative regulations to clarify this issue to ensure that the licensing process moving forward is consistent with the City Code, City Council’s intent when it implemented this robust licensing process, and fundamental fairness.”
Last week, the city and county announced it will extend the licensing pause until Jan. 24, 2022.
During the initial 60-day pause, “staff considered administrative regulations to clarify this issue and decided to submit a proposed amendment for Council’s consideration to make changes directly to the marijuana licensing provisions in the Broomfield Municipal Code, originally approved by Council on March 16, 2021,” the update reads.
No further comments will be made on the pending litigation, the Dec. 8 update states, though questions about the pause can be emailed to [email protected]. Public comment on the ordinance can be submitted by emailing [email protected] no later than Jan. 10 at noon for council’s review, and in-person public comments will be heard during the public hearing at the Jan. 11 meeting.
Ultimately, the approved applications will be entered into a public, random lottery to determine the recipients of the initial licenses. Broomfield will issue three marijuana licenses at first, and two additional licenses may be added 12 months after the first three are issued, for a total of five licenses. For additional information on the process, visit broomfield.org/3427/Marijuana-in-Broomfield.