§ 44-10-309 — Business owner and financial interest disclosure requirements

Colorado § 44-10-309

• Jurisdiction: Colorado
• Title 44: Revenue -
• Art.: Regulated Marijuana

Text

(1) Applicants for the issuance of a state license shall disclose to the state
licensing authority the following:

(a) A complete and accurate organizational chart of the medical marijuana
business or retail marijuana business reflecting the identity and ownership
percentages of its controlling beneficial owners;

(b) The following information regarding all controlling beneficial owners of
the medical marijuana business or retail marijuana business:

(I) If the controlling beneficial owner is a publicly traded corporation, the
applicant shall disclose the controlling beneficial owners' managers and any
beneficial owners that directly or indirectly beneficially own ten percent or more of
the owner's interest in the controlling beneficial owner.

(II) If the controlling beneficial owner is not a publicly traded corporation and
is not a qualified private fund, the applicant shall disclose the controlling beneficial
owner's managers and any beneficial owners that directly or indirectly beneficially
own ten percent or more of the owner's interest in the controlling beneficial owner.

(III) If the controlling beneficial owner is a qualified private fund, the
applicant shall disclose a complete and accurate organizational chart of the
qualified private fund reflecting the identity and ownership percentages of the
qualified private fund's managers, investment advisers, investment adviser
representatives, any trustee or equivalent, and any other person that controls the
investment in, or management or operations of, the medical marijuana business or
retail marijuana business.

(IV) If the controlling beneficial owner is a natural person, the applicant shall
disclose the natural person's identifying information.

(c) A person that is both a passive beneficial owner and an indirect financial
interest holder in the medical marijuana business or retail marijuana business; and

(d) Any indirect financial interest holder that holds two or more indirect
financial interests in the medical marijuana business or retail marijuana business or
that is contributing over fifty percent of the operating capital of the medical
marijuana business or retail marijuana business.

(2) The state licensing authority may request that the medical marijuana
business or retail marijuana business disclose the following:

(a) Each beneficial owner and affiliate of an applicant, medical marijuana
business or retail marijuana business, or controlling beneficial owner that is not a
publicly traded corporation or a qualified private fund; and

(b) Each affiliate of a controlling beneficial owner that is a qualified private
fund.

(3) For reasonable cause, the state licensing authority may require
disclosure of:

(a) A complete and accurate list of each nonobjecting beneficial interest
owner of an applicant, medical marijuana business or retail marijuana business, or
controlling beneficial owner that is a publicly traded corporation;

(b) Passive beneficial owners of the medical marijuana business or retail
marijuana business, and for any passive beneficial owner that is not a natural
person, the members of the board of directors, general partners, managing
members, or managers and ten percent or more owners of the passive beneficial
owner;

(c) A list of each beneficial owner in a qualified private fund that is a
controlling beneficial owner;

(d) All indirect financial interest holders of the medical marijuana business or
retail marijuana business, and for any indirect financial interest holder that is not a
natural person and ten percent or more beneficial owners of the indirect financial
interest holder.

(4) An applicant or medical marijuana business or retail marijuana business
that is not a publicly traded corporation shall affirm under penalty of perjury that it
exercised reasonable care to confirm that its passive beneficial owners, indirect
financial interest holders, and qualified institutional investors are not persons
prohibited pursuant to section 44-10-307, or otherwise restricted from holding an
interest under this article 10. An applicant's or medical marijuana business's or
retail marijuana business's failure to exercise reasonable care is a basis for denial,
fine, suspension, revocation, or other sanction by the state licensing authority.

(5) An applicant or medical marijuana business or retail marijuana business
that is a publicly traded corporation shall affirm under penalty of perjury that it
exercised reasonable care to confirm that its nonobjecting passive beneficial
owners, indirect financial interest holders, and qualified institutional investors are
not persons prohibited pursuant to section 44-10-307, or otherwise restricted from
holding an interest under this article 10. An applicant's or medical marijuana
business's or retail marijuana business's failure to exercise reasonable care is a
basis for denial, fine, suspension, revocation, or other sanction by the state
licensing authority.

(6) This section does not restrict the state licensing authority's ability to
reasonably request information or records at renewal or as part of any other
investigation following initial licensure of a medical marijuana business or retail
marijuana business.

(7) The securities commissioner may, by rule or order, require additional
disclosures if such information is full and fair with respect to the investment or in
the interest of investor protection.

Legislative History

Source: L. 2019: Entire article added with relocations, (SB 19-224), ch. 315, p. 2868, � 5, effective January 1, 2020.