Safeguards Required to Obtain a Dispensary License in Colorado

Learn about the safety procedures needed to obtain a dispensary license in Colorado

January 9, 2023
Safeguards Required to Obtain a Dispensary License in Colorado
Written by
Blitz Insurance

Colorado is one of the most established recreational markets in the United States. Launched more than a decade ago with the passage of Amendment 64, Colorado has paved the way for dozens of other states to legalize adult use of cannabis.

At the time of writing, cannabis sales in the state have added up to more than $13 billion dollars since legalization. Colorado now has one of the highest number of dispensaries and retailers per capita in the nation — and legally speaking, all those storefronts have to follow strict guidelines on security.

With dispensary thefts on the rise across the state, it's now more essential than ever for retailers to have security measures and risk management plans in place. Here is a review of what safeguards are legally required in Colorado

Security Measures for Recreational and Medical License Application In Colorado

In Colorado, security considerations begin long before you open and before you make that very first sale. In fact, you’ll need to have a fully realized security plan just to get your Regulated Marijuana Business License approved.

As part of the application process, you need to submit several documents associated with security and risk management. These include:

  • An accurate facility diagram coveraging the licensed facility in its entirety
  • A separate diagram covering the security and surveillance system, including camera location, number, and direction of coverage
  • A copy of your contract with any companies responsible for the installation and maintenance of your security system and video surveillance equipment

Although relatively basic, these application requirements make it clear that Colorado takes dispensary security seriously. The state wants to ensure that applicants are thinking about how to safeguard their licensed premises as early as possible. So as soon as your retail space has been secured, it makes sense to start strategizing the security plan.

Security Strategy Goes Hand-in-Hand with Dispensary Insurance in Colorado

The news reports are unrelenting. The Denver Post reported that by the end of 2019, dispensary thefts had “hit a three year high.” The Gazette wrote about more than $30,000 of concentrates stolen from a Colorado Springs store in 2021. More recently, KDVR covered a string of five dispensary burglaries in Louisville. These are only a few examples among many.

A security plan and a surveillance system isn’t just a requirement for operating a recreational or medical dispensary in Colorado, it’s required to safeguard your business, inventory, customers, and staff.

Are you hearing from cannabis retailers concerned about the risk of theft and robbery Speciality insurance coverage is a natural extension of the safeguards dispensaries already have in place.

Blitz Insurance is building better coverage in Colorado. We work with our broker partners for a tailored approach to specialty insurance for recreational and medical retailers. That means flexible coverage options for every price point.

Limited and Restricted Access Areas

According to the Code of Colorado Regulations, a Limited Access Area is “a building, room, or other contiguous area upon the Licensed Premises where Retail Marijuana is grown, cultivated, stored, weighed, packaged, sold, or processed for sale, under control of the Licensee.”

The Limited Access Area has strict regulations on signage and visitors. Signs identifying the area have to be posted on all entry and exit points, with lettering that is large enough to read (½-inch lettering or larger).

First, visitors have to be at least 21 years old and have identification. Then, visitors to Limited Access Areas have to wear a badge and always have an escort by licensed personnel. The licensee has to maintain logs of all visitor activity.

A Restricted Access Area is a secure designated zone “where Retail Marijuana and Retail Marijuana Product are sold, possessed for sale, and displayed for sale, and where no one under the age of 21 is permitted.” This is essentially the point-of-sale area, where the product is displayed.

If there are customers in store, there must be a staff member in the Restricted Access Area at all times. Employees are responsible for checking that everyone is over the age of 21, and that the number of people in the area isn’t unreasonable in relation to the number of staff.

On-Site Security Systems

Colorado requires all medical and recreational retailers to have a professionally installed security alarm system monitoring the licensed premises. There are also lock standards that storefronts need to adhere to.

The minimum requirements are as follows:

  • All license holders must maintain a functional security alarm system on all entry and exit points, including doors and windows.
  • The licensed premises must be monitored, which means “continuous and uninterrupted attention to potential alarm signals that could be transmitted” from the system.

When it comes to lock standards, not just any lock will do. As section R 305 details, it cannot be a lock designed for residential use. All facilities must use commercial grade door locks, and these must be installed on all entry and exit points.

Security Cameras and Associated Infrastructure

The regulations of video surveillance cover the overall functionality of the system as well as the quality of the recordings. Essentially, this ensures your infrastructure not only works but is usable should there be a security issue.

First and foremost, it’s mandated by law that your security cameras record digitally, and that these recordings are stored in a secure zone accessible only by management. The system has to have enough battery power to support a four-hour power outage and have failure notification in place.

Secondly, the recordings have to be high enough quality that the people and activities captured on the files are identifiable. That means within 20 feet of all entry and exit points to ensure “clear and certain identification” of people entering your store.

As per section R 306 of the Code, you will need to install video surveillance over the following areas:

  • All Limited Access Areas
  • All entry and exit points to Limited Access Areas
  • Point-of-sale areas
  • All entry and exit points of the Licensed Premises (indoor and outdoor vantage points)
  • Security rooms
  • All areas where cannabis is displayed for sale

Keep your security cameras running 24 hours a day, and then hold these records in “a format that can be easily accessed for viewing” for at least 40 days before archiving them.

Locally Mandated Security Considerations

In response to the number of recent burglaries hitting cannabis stores in the state, some local jurisdictions have implemented heightened security requirements.

Denver is one example of a city that has added new rules. As of January 1, 2022, cannabis retailers have to install a safe on-site for both products and cash. If there isn’t room for a safe, stores must now install physical barriers around the building (like guard posts), live remote viewing, or on-site security personnel.

Always check with your local licensing authority about any additional safeguards you may be legally required to implement.

Manage Your Risk Exposure Through Security, Surveillance, and Dispensary Insurance

Colorado cannabis regulations have served as a model for the rest of the country. Many of the rules and regulations launched here have been adopted and adapted elsewhere. The security requirements governing medical and recreational retail stores here are a primary example.

These rules govern the application process, on-site security systems, and video surveillance. No matter where you operate in Colorado, you have to adhere to these baseline requirements.

Cannabis remains a largely underserved market, and one that needs a careful approach.

Blitz Insurance lowers the barriers to insurance for the toughest, most underserved specialty areas, including cannabis retail. With our partners, we provide the tailored coverage these markets often lack.

Is your market covered? Let’s connect to serve Colorado’s dispensaries and cannabis retailers better.

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