Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants

Colorado marijuana regulators are looking for feedback on a proposal to create a franchise cannabis business model to promote equitable participation in the industry by people from communities harmed by the war on drugs. When legislators initially approved a bill to create an accelerator program for marijuana businesses, it was only designed to give eligible entrepreneurs an opportunity to share a cannabis facility with an existing company. But following stakeholder meetings, regulators laid out a proposal to let those entrepreneurs functionally serve as franchises of current larger marijuana businesses, operating out of separate facilities but sharing branding, advertising and intellectual property under certain conditions. “The Division contemplates certain components of this alternative ‘separate premises’ model will be similar to a franchisor-franchisee business relationship,” the state’s Marijuana Enforcement Division said in a notice last month. In order to participate under the new model, the division said it would require a series of disclosures, including initial investments from both parties, terms of any financial arrangements and obligations for the licensee such as non-compete requirements. Additional requirements could still be developed. For example, the department is considering whether franchisees should be offered reduced or waived rent to use facilities owned by existing businesses that agree to be “endorsement holders.” Regulators are also contemplating limitations for the amount of money a franchise can charge an accelerator licensee as a fee for use of their facilities, as well as liability rules. “Available incentives for accelerator-endorsed licensees to support the ‘separate premises’ model may also include…

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Source : MJ moment
Link to original : Colorado Marijuana Regulators Propose ‘Franchise’ Business Model For Equity Applicants
reposted by Cannabis News World

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