City Warning: Private Marijuana Lounges Must Close or Face Enforcement

Tetra 9, a private marijuana club at 3039 Walnut Street, has closed temporarily as it awaits a marijuana hospitality license from the City of Denver.

Owner Dewayne Benjamin went to work on January 13 expecting to continue operating Tetra 9 as a private, unlicensed business as he went through the process of getting a marijuana hospitality license, However, the Denver Department of Excise and Licenses sent out a memo to marijuana business owners and stakeholders later that day, warning that any businesses allowing pot consumption without a license to do so "could be subject to enforcement action," and advised such businesses to shut down.

The Excise and Licenses memo cites a law passed by Denver City Council last April. The law, which created a new marijuana hospitality program for Denver, also banned unlicensed consumption venues, according to Excise and Licenses.

“It shall be unlawful for any person, whether or not they are licensed in another jurisdiction, to engage in any form of business or commerce involving marijuana within the city without a valid local license or permit issued pursuant to this article V authorizing that business and a corresponding state license or permit issued pursuant to the Colorado Marijuana Code authorizing the same business,” reads part of the Denver Municipal Code.

A state law also forbids "anyone to exercise any privilege of a marijuana license that the person does not hold," according to the memo.

Private and membership-based businesses that were previously operating aren't exempt from these rules, the memo notes.

Denver opted into these new rules nearly nine months ago, but this is the first such warning issued for unlicensed marijuana clubs. Benjamin, who received a license from the state Marijuana Enforcement Division for marijuana hospitality in December, is still awaiting a public hearing for city approval. Although he's been in active communication with Excise and Licenses, he says the notice to shut down on January 13 came as news to him.

Excise and Licenses didn't contact him directly, Benjamin says, but he closed Tetra 9 after receiving the memo.

"I’m going to have to close through the rest of the process," Benjamin explains in an email to Westword. "Hopefully the license will be processed next week, and then there is a 30 to 45 day period for the public hearing."

A marijuana lounge that allows people inside based on monthly and short-term memberships, Tetra 9 has been operating as a private club since 2018. If he's successful in obtaining a local marijuana hospitality license, Benjamin plans to keep Tetra 9 open under a membership program similar to that of a gym; he believes gaining a city permit will open his club up to more advertising and partnership opportunities. He hopes to be fully licensed and open before April 20.

Outside of a handful of citations for open marijuana consumption, Benjamin says his relationship with city officials has largely been constructive and helpful. Excise and Licenses hasn't been a fan of privately zoned businesses allowing marijuana use, though, and has always stopped short of calling them legal.

Tetra 9 is one of three active applications for a marijuana hospitality license in Denver, but is the only one filed by a business that had been actively allowing marijuana use. Another application is for an unopened business that prefers to keep his information private, according to Excise and Licenses, while the third  applicant, the Patterson Inn in Capitol Hill, is on an application timeline similar to Tetra 9's.