Senate Bill 16-040 Summary

• Redefines marijuana business ownership to allow out-of-state investors by creating "direct beneficial interest owners" (who own stock shares) and "indirect beneficial interest owners" (who hold permitted economic interests, royalties, or employee profit shares).

• Requires direct beneficial interest owners to either be Colorado residents for at least one year before application or be U.S. citizens; businesses with non-resident owners must have at least one Colorado resident officer with day-to-day operational control and are limited to 15 total direct beneficial interest owners.

• Allows qualified institutional investors to own up to 30 percent of marijuana businesses and permits qualified limited passive investors (U.S. citizens owning less than 5 percent) with limited background checks.

• Applies to both medical marijuana and retail marijuana businesses, with non-resident applicants required to obtain a "finding of suitability" from the state licensing authority before submitting formal applications.

• Appropriates $995,738 to the Department of Revenue for enforcement and implementation, with additional funds distributed to the Department of Law, Department of Public Safety, and Department of Personnel; applies to applications made on or after January 1, 2017.