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Colorado Springs Orders Nine Cannabis Social Clubs to Shutter

Nine Colorado Springs cannabis clubs that allow social consumption on their premises were hit with cease-and-desist letters last week, part of the first crackdown under a ban on consumption clubs enacted by the City Council in March.

The clubs began springing up after Amendment 64, which legalized cannabis for adults 21 and over, was passed in 2012. The amendment banned public consumption, so consumers and businesses set out to create a setting that would allow adults to consume and socialize in private—without having to stay at home.

Colorado Springs had already outlawed sale of adult-use cannabis, but the clubs found loopholes to go around that. They provided cannabis to their patrons on a “reimbursement model,” under which customers could either “trade” cannabis for memberships or sign affidavits saying the club was growing the customer’s legally allowed six cannabis plants for them.

Although city officials view such actions as de facto sales, the practice has continued. The ban passed in March, however, says the clubs cannot sell, trade, give, distribute, or allow the transfer of marijuana.

The ban gave clubs that existed before Sept. 23, 2015, eight years to phase out their businesses, an effort to help the owners protect their investment. But under the law, every owner had to submit a consumption club application and $200 fee by April 29 to get a one-year renewable license for $90 plus registration fees.

Only five clubs applied by the deadline, and only one has been approved for an annual license that can be renewed for up to eight years: Speakeasy Vape Lounge and Cannabis Club, at 2508 E. Bijou St.

Two applications are under consideration, and two were denied: Studio A64, which was reportedly the first cannabis club in town, and Been Here Before Co.

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The cease-and-desist orders came as a surprise to many in the industry.

“This comes after years of these clubs operating without incident,” said Jason Warf, executive director of the Southern Colorado Cannabis Council, in an interview with the Colorado Springs Gazette. Statewide legislation set to be introduced in January, he said, would allow the clubs to operate more freely. “Our goal would be that the city of Colorado Springs follows this lead and enact regulations that coincide with the efforts at the state level.”

Warf emphasized that the clubs have operated as responsible businesses, providing employment and a public service—all without a single violent crime occurring on their business premises. City police have confirmed publicly that they’ve encountered no issues with the clubs.

For tourists, often drawn to Colorado by medical necessity or simply the novelty of legal cannabis, the clubs offer at least one relaxed place to consume. Public consumption is illegal, and most hotels ban smoking and vaping. Cannabis might be easy to buy in Colorado, but it can be a hassle to find somewhere to legally consume it.

“Clubs also provide a safe, private place for the tens of thousands of tourists visiting Colorado primarily for legal cannabis,” Warf said. “Right now they are unable to provide this space.”