Steamboat is not in favor of allowing publicly traded cannabis companies in town

A cannabis plant sold at Golden Leaf is grown in Steamboat Springs.
Steamboat pilot and file photo from today

Members of the Steamboat Springs City Council reached a consensus at their Tuesday, Feb. 1, meeting not to allow publicly traded companies to buy cannabis businesses in the city.

City Attorney Dan Foote told council members he was contacted by a potential buyer looking to purchase an existing cannabis license in the city and use the business as a publicly traded company, meaning anyone from anywhere in the world could buy shares in the company.

The city currently requires cannabis dispensary owners to live within the city, in order to keep their businesses local. As a result, none of Steamboat’s three dispensaries are publicly traded.

Although the city hasn’t technically banned publicly traded cannabis companies, Foote said such a move would make it difficult for owners to comply with the city’s residency requirement.

Colorado didn’t license publicly traded cannabis companies for the first few years after legalization, Foote said. However, as the industry grew and some regulations were relaxed, the state reversed its original ban.

“The argument for that would be that it allows the industry to grow and mature, and it provides opportunities for consolidation and for larger companies to enter that space,” Foote said.

Still, Foote said, allowing publicly traded companies could make city business much more corporate than it is now.

“We have landlords who at least have some connection to the community and perhaps have a better understanding of community values ​​than landlords who would live elsewhere,” Foote said. “These are some of the effects you might consider.”

The city typically reviews its marijuana ordinances on an annual basis, but hadn’t done so for the past two years due to COVID-19. The annual update was scheduled for March or April, but Foote decided to have it sooner after being contacted by the potential buyer.

Steamboat has its Residency Law in place to ensure that cannabis store owners play a role in the community and are invested in its values.

“In the past, when we discussed changing our bylaws to talk about ownership and other issues, there was some concern about whether local ownership was important or not,” Foote said. “We don’t see blocks that are one marijuana business after another located on the same street.”

Council members agreed with Foote and felt that publicly traded companies did not belong in the small community.

“This is a situation where I am 100% in favor of local ownership because it has worked well for us so far,” said board member Joella West. “I am not comfortable with the marijuana industry in general becoming a major multinational industry where it would be difficult, if not impossible, to hold anyone accountable.”

Council members agreed with West that local ownership benefits the community, and some members pointed to substance abuse issues the city faces as a reason not to usher in a more corporate cannabis business structure.

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