HB 1011 Inspires Cautious Optimism in Colorado

When we think about the legal cannabis industry, Colorado is usually near the top of the list of subjects that cross our minds. In many ways, this state has been a trailblazer for recreational cannabis legalization and everybody is feeling the effects. With just over half a billion dollars in sales since Colorado became the pioneering state to first legalize recreational cannabis in 2014, investors look to the state as something of a “measuring stick” to which all other legalizing states are compared to.

A new bill, HB 1011, has been proposed to keep Colorado at the front of the pack in terms of investment opportunities as other states’ legal cannabis programs come online.

Recently, three lawmakers, including key bill sponsor Representative Dan Pabon, put forth HB 1011 as an effort to reduce barriers that impede upon the growth potential of Colorado-based publicly-traded cannabis companies. The aim here is to provide more investment opportunities for investors with deep pockets who want to get in on the highly lucrative legal cannabis market.

What really sets this bill apart is that it creates the opportunity for unlimited out-of-state investors to get their piece of the pie. This applies to international investors as well as corporations since ownership is no longer just restricted to individual persons.

HB 1011 has faced some criticism, particularly from those who are worried that big corporations and their big money will drive Mom-and-Pop cannabis establishments into closing up shop. Will the expected influx of investors bring some operations to national attention while smaller operations are left to close their shutters for good?
Mr. Pabon notes that many entrepreneurs and businesses have grown and prospered in Colorado’s thriving cannabis industry. With the recent additions to the industry in California and Oregon, competition for capital investment and financial resources has increased. “We didn’t want Colorado to be left behind in any way.” Says Pablon.
Since 2016, Colorado legislators have been loosening the rules to accommodate more future investors who want to get in on the so-called Green Rush. SB 40 was passed in 2016, and had two effects:
1. The previous residency requirement, a minimum of two-years, was reduced to one year.
2. SB 40 also capped the restriction on out-of-state investors to 15 “natural persons.”

So while some might see the proposal of HB 1011 as a sudden change in an attempt to get greedy hands on Colorado’s green, everyone critical of the bill should be aware that this is not an unforeseen step for the landmark state. HB 1011 is merely a natural step to be taken in the progression of investment opportunities in the legal cannabis market.
Legislators also see HB 1011 as a means of leveling the playing field in light of the progress made in other states with their own up-and-coming or thriving cannabis markets. Colorado is the only state with legalization on its books that prohibits the involvement of publicly-traded companies in the industry. Leaders and entrepreneurs in Colorado have mixed feelings on the subject but tend to try and maintain a sense of optimism. If the passage of HB 1011 has the effect that its sponsors intend, then it could drive down the cost of cannabis for consumers without quality being sacrificed.

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