Pre-Licensing Meeting Overview

CITY OF AURORA

PRE-LICENSING MEETING OVERVIEW

INTRODUCTION

You will be meeting with the Aurora Marijuana Enforcement Division (AMED) that was created to implement and enforce the rules and regulations. This meeting is mandatory. You must schedule and attend a pre-licensing meeting before you can submit your application. AMED members are:

Robin J. Peterson / Division Manager / 303-739-7341 /
Kim Kreimeyer / Senior Planner II / 303-739-7126 /
Wade Jensen / Tax Auditor / 303-739-7783 /
Ron Moore / Neighborhood Support Manager / 303-739-7463 /
Joshua King / Code Enforcement Officer III / 303-739-7199 /
Scott W. Berg / Chief Building Official / 303-739-7135 /
Steven Clark / Building Inspector Supervisor / 303-739-7407 /
Sgt. Scott Pendleton / Aurora Police Department / 303-739-1616 /
Inv. Craig Morgan / Aurora Police Department / 303-739-1678 /
John Eckert / Plans Examiner / 303-739-7405 /
William Griffin / Building Inspector III / 303-739-7526 /
Mark Topping / Building Inspector III / 303-739-7625 /
Alan Wilson / Life Safety Bldg. Inspector III / 303-739-7657 /
Richard Lacoste / Plans Examiner III / 303-739-7688 /
Inv. John Borquez / Aurora Police Department / 303-739-1679 /

Please arrive on time so that we can accommodate everyone interested in opening up a retail marijuana establishment in the City of Aurora.Pre-licensing meetings are scheduled for one and one half hour. More time will be made available if needed. Schedule a meeting for each type of license you are applying for. If you are applying for multiple locations but same type, one meeting will be sufficient.

The meeting will be held in the Columbine Conference Room located in the Finance Department on the 5th floor of the Aurora Municipal Building located at 15151 E. Alameda Parkway, Aurora, Colorado 80012.

This meeting is informal. All owners and key employees are encouraged to attend.The purpose of this meeting is for the applicant to inform the city of the size, scope and feasibility of the proposed retail marijuana establishment and for the city to provide the applicant a more complete understanding of the licensing process. AMED will be present and able to assist in all areas of expertise necessary for applying for a retail marijuana establishment license.

We strongly recommend you file a ‘Notice of Intent” with the State Marijuana Enforcement Division (MED) as soon as possible. They are currently scheduling meetings for July 2014. In order for you to make an October 1, 2014 effective date, you must have had your application accepted by the State MED during the month of July.

PROPOSED TIMELINE

Retail Marijuana Stores

Pre-Licensing Meeting Period:Start June 9, 2014*

City Accepts Applications:Start July 1, 2014*

State Accepts Applications:July 1, 2014

Send Business and Operating Plans

To Third Party Reviewers:August 11, 2014

Award the Conditional Licenses:August 29, 2014

First Day of Operation Allowed:October 1, 2014

First Day Product on the Premises

Allowed:October 1, 2014

*Retail store applications will be accepted between July 1, 2014 and July 31, 2014 for the initial awarding of the twenty-four (24) store licenses. If the city does not award all 24 retail marijuana store licenses during this first round, a second round of applications will be held and so forth until all 24 licenses have been awarded.

Retail Marijuana Cultivation, Product Manufacturing and Testing Facilities

Pre-Licensing Meetings Begin:June 9, 2014

City Accepts Applications:July 1, 2014

State Accepts Applications:July 1, 2014

First Day of Operation Allowed:October 1, 2014

First Day Product on the Premises

Allowed:October 1, 2014

DISCUSSION ITEMS

Retail Marijuana Stores

The city will issue no more than 24 retail marijuana store licenses, with a limit of four in each of the six council wards. The retail marijuana store licenses will be awarded via a competitive process involving a two-stage review of the applications received. All minimum requirements must be met in order to move on to the second state.

Minimum Requirements

1. Demonstrate at least $400,000 of liquid assets in the applicant’s control.

“Liquid assets” are assets in the form of money or cash in hand, assets that will be placed directly into the retail marijuana establishment or other assets that can be quickly converted into cash.

The following chart is a non-inclusive listing of assets that would be classified as liquid or illiquid.

Liquid Assets
Cash on hand
Checking or savings accounts
Money market account
Certificates of deposit
U.S. savings bonds
Publicly traded stocks (listed on an exchange)
Mutual funds
Prepaid rent
Equipment for store use

Includes: computers and server hardware, point-of-sale systems, display screens, etc.
Excludes: cultivation or testing equipment, marijuana processing machinery, etc.

Removable trade fixtures (display cases, storage and shelving units)
Office furniture
Prepared marijuana or products for resale
Other store inventory (paraphernalia)
Safes and security systems / Not Liquid Assets
Real property or any interest therein

Includes: farms, business properties, oil and gas interests, mortgages, leases or contracts for deed
Excludes: prepaid rent

Household items (furniture, appliances, etc.)
Personal effects, firearms and jewelry
Small consumable supplies (gloves, pens & paper)
Vehicles of any type
Shares in private corporations or partnerships
Retirement accounts (401(k), IRA, etc.)
Life insurance policies

People may cash out retirement or insurance accounts, but not liquid until then

Marijuana plants, regardless of maturity
Cultivation or testing equipment
Fixtures to be permanently affixed to real property

Ventilation or filtration systems
Electrical system upgrades
Signage

Timing:The liquid asset requirement only needs to be met once, at the time of application. Once the license is issued, the business is not required to maintain any specific level of liquid assets.

Title Requirements:Only assets held or titled in the name of the actual applicant will qualify toward meeting this requirement – for example, in the case of a corporate applicant, the personal assets of owners or assets of related business entities would not be considered. For jointly held assets, only the applicant’s portion of ownership will be considered toward the minimum requirement.

Verification:The applicant must provide satisfactory documentation of asset ownership such as bank statements, verifications of deposit, lines of credit, stock certificates, and invoices or receipts. Cash on hand may be verified via an affidavit, preferably from a professional third party (e.g. accountant or lawyer).

Valuation: Assets will typically be valued at the purchase price, unless there is specific reason to use a depreciated value. Prepared marijuana and products will be evaluated at market value by weight. Other inventory will be valued at the wholesale purchase price.

2. The applicant has no felony convictions for ten years, no drug-related misdemeanor convictions for five years, and no drug-related felony convictions evidenced by results of the criminal background check.

3. The applicant must have at least two years of experience as defined:

Must have owned or managed a licensed Colorado marijuana establishment. A keyemployee or someone who made administrative decisions for the establishment andhasknowledge of business practices and protocols, such as security requirements, what a restricted area is, an administrator (not just a user) for the marijuana inventory tracking system; knowledge of laws of the marijuana industry. Only the industry experience ofthose members of the ownership group with at least a twenty percent (20%) ownership interest in the business entity applying for licensure will be considered.

4. The applicant’s proposed store location satisfies the minimum distance requirements of at least 1,000 feet from a school serving pre-school through twelfth grade students and 500 feet from a hospital or substance abuse treatment center, as measured from the nearest property boundary of these uses to the address point of the retail marijuana store. This is evidenced by verification by a member of AMED.

5. The business must certify that it has satisfied or will satisfy the minimum security requirements of the CRMC and Rule 305 of these regulations prior to opening. This will be verified by AMED and the Aurora Police Department.

POINT SYSTEM

If the applicant meets all of the above requirements, the applicant will enter stage two which is the awarding of points as outlined below. The applicant must designate which points they are seeking.

Differentiator / Qualifier / Points
Experience operating a licensed marijuana establishment in Colorado (Cumulative) / 3 Years
4 Years
5 Years / +1
+1
+1
Experience operating a licensed marijuana establishment in Colorado without administrative penalties or license revocation (Cumulative) / 3 Years
4 Years
5 Years / +1
+1
+1
The applicant and the applicant’s principal officers and executives were in compliance with all tax laws / Demonstrated history of timely payment (1 year) and no criminal, civil or administrative actions in the past 3 years / +2
Applicant criminal background history / No felony convictions
No pending charges
No drug-related misdemeanor convictions / +2
+2
+2
Manager and employee criminal background history / No felony convictions
No drug-related misdemeanor convictions / +2
+2
Building contains a filtration or air scrubbing system / Minimize odors and public nuisance complaints / +3
Demonstrates enhanced security in excess of minimum requirements / Deter criminal activity and minimize police supervision of premises / +2
Operating Plan / Ensure adequate staffing, security, employee training, consumer education, and compliance with state and local laws. / +1 to +10
Business Plan / Define scope of planning and capital improvements, estimate revenue and expenses, and demonstrate ability to operate in highly regulated industry. / +1 to +10
Total Score / 43

Tax Compliance. Applicants must provide a notarized affidavit, signed by all owners listed on the application form, stating that the applicant, all owners, and any other licensed marijuana business entities in which the owners have an interest have been timely in all tax payments to the Internal Revenue Service and the Colorado Department of Revenue for the past year, and have not had any tax-related criminal charges, civil actions, or administrative penalties against them within the past three years. Applicants must provide copies of the most recent federal tax returns for all owners and relevant business entities, along with proof of payment of any taxes due (via copies of checks or bank statements, for example). The local licensing authority will verify state income and sales/use tax payments through the Colorado Department of Revenue, and will conduct searches of court records and lien filings.

Fingerprint Background Checks. All employees of the retail stores will be fingerprinted, and photographed and checked against the FBI and CBI database.

Ventilation and Filtration. Installation of an air scrubber or carbon filter air filtration systems or equivalent.

Security Plan must sufficiently demonstrate security measures in excess of the minimum requirements set forth in state regulations. Such enhanced security measures shall include, but are not limited to, steel security doors, improved video surveillance system capabilities, and advanced alarm systems. The local licensing authority along with the Aurora Police Department will evaluate these enhanced security measures.

Business Plan Guidelines. Please see Attachment 1.

Operating Plan Guidelines. Please see Attachment 2.

Permanency of Bonus Points. With the exception of the business plan and operating plan, retail marijuana store applicants will be held accountable for any information submitted which may result in bonus points being awarded in the point system review process. Such criteria are subject to reevaluation during the inspection and license renewal processes, and any failure of the applicant to adhere in a timely manner to the criteria by which bonus points were awarded may result in penalties including, but not limited to, revocation of the store license.

Cultivation, Product Manufacturing and Testing Facilities

Retail marijuana cultivation and product manufacturing applicants must provide a plan that specifies the methods to be used to prevent the growth of harmful mold and compliance with limitations on discharge into the wastewater system of the city.

Retail marijuana product manufacturing and testing applicants must specify all means to be used for extraction, heating, washing, or otherwise changing the form of the marijuana plant, along with proposed ventilation and safety measures to be implemented for each process.

General Marijuana Establishments

The meeting will be more beneficial if the AMED team members if you have a location in mind for the type of establishment you want to apply for. Materials that will be required at application are listed below. This is not an all inclusive list.

A completed general business license application and retail marijuana addendum;

Organizational documents for all entities identified in the application, if not a natural person such as articles of incorporation, partnership agreements, etc.
A copy of the lease or deed for the property in the name of the applicant. Can be a contingent lease if applying for a store location.
If the property is leased, written consent from the owner allowing operation of a retail marijuana establishment on the leased premises;
A site plan of all buildings on the property where the premises is located, including a floor plan showing how the floor space is or will be used, parking for the premises, total floor area of the building(s), and the nature and location of any existing or proposed exterior lighting and signage;
A list of all other uses on the property;
A list of all proposed changes or modifications to the premises, including any such proposed changes that are purposed because of state licensing requirements; and
A security plan indicating how the applicant will comply with city and state requirements.

At the end of the pre-licensing meeting, both the city and applicant will have a better understanding of what type of license the applicant is applying for and what the city expects from the applicant.

The AMED team will continue to be available to assist you as issues and questions come up well beyond the application process. The city believes in order for this process to be successful, communication must be open, honest and often. Thank you for your interest in opening your retail marijuana establishment in the City of Aurora.

The Aurora Marijuana Enforcement Division

Business Plan Guidelines-Attachment A

Document should be no more than ten (10) pages. Please be concise.

Ordinance Code Section 6-309(b)(9)

An applicant may also submit a business plan that shall be worth between one and ten points. The business plan shall clearly demonstrate the applicant’s ability to operate in a highly regulated industry, and may include a scope of work for the planning and development of the proposed business; a scope of work for capital improvements for the proposed business; an estimate of first-year revenues; an estimate of first-year operating expenses and evidence that the applicant will have the resources necessary to pay for those expenses; and a description of the applicant’s history of compliance in another highly regulated industry.

Regulations Rule204.3(f)

Business Plan. The business plan is to demonstrate the applicant’s ability to successfully operate in a highly regulated industry over an extended period of time. The local licensing authority will review all business plans submitted, and shall assign a score of between one and ten points. The content by which the local licensing authority will evaluate business plans may include, but is not limited to the following: scope of work for the planning and development; scope of work for capital improvements; an estimate of first-year revenues; an estimate of first-year operating expenses and evidence that the applicant will have the resources necessary to pay for those expenses; and a description of the applicant’s history of compliance in another highly regulated industry. The business plan will be reviewed and scored by three independent individual reviewers, with the final score being the average of the three scores, rounded to the nearest whole number.