Steamboat Pilot & Today file photo
Steamboat Springs City Council members came to a consensus at their Tuesday, Feb. 1 meeting to not permit publicly traded companies to purchase cannabis businesses in the city.
City Attorney Dan Foote told council members he was contacted by a prospective buyer looking to purchase an existing cannabis license in the city and use the business as a publicly traded company, meaning anyone from around the world could buy stock in the business.
The city currently requires that cannabis dispensary owners live inside the city, as to keep their businesses local. As a result, none of Steamboat’s three dispensaries are publicly traded.
While the city does not technically have a ban on publicly traded cannabis companies, Foote said such a move would make it difficult for owners to comply with the city’s residency requirement.
Colorado did not allow publicly traded cannabis companies for the first several years after legalization, Foote said. However, as the industry grew and some regulations were relaxed, the state went back on its original ban.
“The argument in favor of doing this would be that it allows the industry to grow and mature, and it allows opportunities for consolidation and for larger businesses to enter this space,” Foote said.
Still, Foote said, allowing publicly traded companies could make the business in town much more corporate than it is now.
“We have owners that have at least some connection to the community and have maybe a better understanding of community values than owners who would live somewhere else might,” Foote said. “Those are some of the effects you might want to consider.”
The city typically revisits its marijuana ordinances on an annual basis, but had not done so the last two years due to COVID-19. The annual update was scheduled for March or April, but Foote moved to have it earlier after being contacted by the prospective buyer.
Steamboat has its residency law in place to ensure that owners of cannabis shops play a part in the community and are invested in its values.
“In the past, when we’d discussed modifying our regulations to talk about ownership and other issues, there has been some concern about whether or not local ownership is important,” 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 corporate, publicly traded businesses did not belong in the small community.
“This is a situation in which I am 100% in favor of local ownership, as it’s worked well for us so far,” said council member Joella West. “I am uncomfortable with the marijuana industry in general becoming a major multi-national industry where it would be difficult or impossible to hold anyone responsible.”
Council members agreed with West that local ownership benefits the community, and some members pointed to the substance abuse problems facing the city as a reason not to usher in a more corporate cannabis business structure.
To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.
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