Denver businesses seek hospitality licenses to let patrons smoke weed

This report first appeared at BizWest news partner BusinessDen.

A Cap Hill mansion-turned-B&B, an existing private club in RiNo and a new addition to South Broadway’s “Green Mile” are the first three businesses to apply for a marijuana hospitality license from the city of Denver.

Denver has separate licenses allowing businesses to cultivate, transport and sell cannabis. But this new license — which opened up for applications in November — would allow businesses to let people consume cannabis products on site.

Some establishments, including one of the three seeking a license, previously allowed patrons to do so. But Denver overhauled its cannabis laws last April, prohibiting private clubs from allowing on-site consumption without a license.

Right now, the only business where customers can consume cannabis is The Coffee Joint at 1130 Yuma Court, which is grandfathered in as a business licensed under Denver’s old cannabis consumption program initiated by voters in 2016.

Here’s what we know about the three new applicants:

Patterson Inn, 420 E. 11th Ave.

This place could give “wake and bake” a whole new meaning.

Chris Chiari, owner of the Patterson Inn at 420 E. 11th Ave. in Cap Hill, said he wants to renovate the mansion’s carriage house into a lounge where visitors can smoke cannabis.

Chiari purchased the Inn and its real estate for $2.4 million in 2018.

The hotel has nine rooms, although Chiari hopes to increase that to 11. Nightly rates range from $195 to $325, depending on the time of year.

Chiari said he plans to install new ventilation systems in the carriage house, and block off access from the lounge to the kitchen on the first floor.

To be admitted into the lounge, guests of the hotel will need to buy a day pass, and Chiari said he would offer annual memberships. But it won’t be like a cannabis lounge where people can just walk in off the street.

Guests wouldn’t be able to smoke in their rooms, and cannabis won’t be sold on-site.

Chiari said he doesn’t plan on the lounge being a “huge moneymaker,” but rather a complement to the rest of the inn’s offerings.

Denver through 2027 is only accepting marijuana hospitality license applications from people who have lived in a poor part of the city for 15 years or more, they or their family members have been convicted of a marijuana-related crime before it was legal in Denver, or their income does not exceed 50 percent of the median income.

“I do have a family member who did unfortunately have a run-in with the war on drugs,” Chiari said. “I have my very clear personal recollection of what that war on drugs looked like coming back at a family.”

Although recreational cannabis became legal in Colorado in 2016, Chiari said he thinks the market for cannabis businesses is still “hot.”

“It is a crowded, competitive space right now; hospitality is a crowded, competitive space,” he said. “How do you carve out something that’s unique and how do you sustain that? You sustain that by delivering a high experience that’s satisfying and meets your guests’ expectations, exceeding those expectations.”

Chiari said he hopes to open the cannabis lounge by the end of the year or in early 2023.

Tetra Lounge, 3039 Walnut St.

Tetra operated as a private club for the last four years in a nearly 100-year-old building in RiNo, but closed temporarily when Denver overhauled its cannabis laws last spring.

Owner Dewayne Benjamin, who applied for the hospitality license, said he’s ready to reopen once he gets approved by the city.

“I’ve been working on developing the hospitality aspect of cannabis for years now, and it will legitimize my business and growth,” he told BusinessDen. “Our business model won’t change much. It is my goal to add more aspects and entertainment value and things like that.”

Tetra offered live music with DJs on the weekends when it was open. The club has three different tiers of membership: daily for $20, monthly for $50 and annual for $300.

Plans submitted to the city show Tetra wants to have half of the smoking area indoors and half outdoors.

CLOUD 9: The Denver Weed Lounge, 1800 S. Broadway

Cloud 9 is the third Denver business to apply for a cannabis hospitality license.

It would be located in a 3,200-square-foot commercial building along South Broadway’s “green mile,” a stretch with numerous dispensaries.

According to the application filed with the city, Cloud 9 is trying to get approved to be open from noon to midnight on Monday through Thursdays, and 10 a.m. to 2 a.m. on Fridays through Sundays.

Reached by BusinessDen, owner Josh Horwitz declined to comment more about the business.

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