Personal Cultivation: the risks, consequences and laws.

There is a great deal of confusion about personal cultivation, medical and recreational, and there is a lot of misinformation out there. Many people believe you can do what you want because it is “constitutional.” Many others believe a “red card” with an expanded plant count allows to you cultivate whatever you are allowed. There are several overlapping state and local rules which impact personal cultivation. I write this in hopes that you and your friends will get the true facts and not the “word on the street.” It is my goal that your personal freedom and exercise of your marijuana rights do not result in any legal problems, criminal or civil. Please feel free to share this with anyone you know who could benefit from this information.

Because of the complex ways these constitutional, state, and local laws interact, I wanted to share this summary for your information so that you are as legal as you hope and believe you are in your personal cultivation. As you will see, there are numerous statutes and policies in place to regulate marijuana within the State of Colorado. However, these regulations can be met with diligent and responsible cultivation practices. There are also numerous criminal and civil risks involved in marijuana use, possession, and cultivation that you should be aware of which are included below. If you have any questions about this research or seek additional information not included below, please do not hesitate to contact our office for an appointment. You can also stay on top of these ever-changing laws by following our blog and newsfeed which contains up to the minute information about marijuana issues: www.marijuanalawscolorado.com.

Colorado State Law

Every discussion about Colorado marijuana law starts with the Colorado Constitution, which affords certain, limited medical and recreational marijuana cultivation rights.

A. Amendment 20:

In 2000, voters of the State of Colorado passed Amendment 20 to the state Constitution which effectively legalized limited amounts of medical marijuana for patients and their primary caregivers. Amendment 20 authorizes a patient who has been issued a Medical Marijuana Registry Identification Card, or that patient’s primary caregiver who has been identified on the patient’s Medical Marijuana Registry Identification Card, to possess “no more marijuana than is medically necessary to address a debilitating medical condition.” Colo. Const. art. XVIII, § 14(4)(a). The law sets a presumptive limit on the quantity of medical marijuana a single patient or caregiver may possess by limiting legal marijuana use to “no more than two (2) ounces of a usable form of marijuana; and no more than six (6) marijuana plants, with three (3) or fewer being mature, flowering plants that are producing a usable form of marijuana.” Id. Think of it like this, every one with a medical card has a chronic, debilitating medical condition and Amendment 20 presumes cultivation of 6 plants and possession of up to 2 ounces is enough for any medical marijuana patient.

Currently, primary caregivers may be listed as a “cultivating or transporting primary caregiver for no more than five patients on the medical marijuana program registry at any given time.” Colo. Rev. Stat. § 25-1.5-106(8). Patients, on the other hand, “shall have only one primary caregiver at any given time” and any patient who has “designated a primary caregiver for himself or herself may not be designated as a primary caregiver for another patient.” Id. Absent exceptional circumstances, a primary caregiver may only provide for the needs of up to 5 patients. For a primary caregiver this means the constitutionally presumptive limit for cultivation is 30 plants (6 plants x 5 patients), and 36 plants if the caregiver is also a patient. From a criminal law perspective, cultivation of 6 plants for a patient or 30 plants for a primary caregiver with 5 patients affords the patient and/or caregiver “exception to criminal law” which is a very strong legal defense.

However, should a Colorado medical marijuana patient or primary caregiver cultivate or possess more than two ounces of a usable form of marijuana or cultivate more than six plants per patient, an affirmative defense for medical necessity may apply. Pursuant to the Colorado Criminal Code, “affirmative defense” means that you can and likely will be prosecuted for felony cultivation if you cultivate more than the presumptive limits (30 plants). I know there are people who have cultivated within their red card exception limits, but do not count on “lightning striking twice in the same place.” Law enforcement has grown both more knowledgeable and aggressive in the last few years toward marijuana cultivation. This is likely in response to the lawsuit from our neighboring states for all the illegal marijuana being daily transported out of state.

Returning to the distinction between affirmative defenses and exception to criminal law. Exception to criminal law essentially means that the criminal law does not apply to your cultivation activities. An affirmative defense assumes you have committed a crime, cultivation of more than the presumptive limits, but have a legally valid excuse. One example of affirmative defense is in the case of murder. If someone breaks into your home with the intent to murder you or your family, you may be inclined to use deadly force against the intruder. If you succeed in killing the intruder, you will likely be arrested and charged with murder. At your murder trial, your attorney would raise an affirmative defense for either: (1) defense of self, (2) defense of others, or both. Colo. Rev. Stat. 18-1-706. Regardless of which affirmative defense you and your attorney choose to raise, presenting this type of defense does not negate the fact that you killed someone, but it may provide an excuse or justification to the jury for why you acted in such a manner.

Applying the affirmative defense analysis to the charge of cultivation, let us assume you are prosecuted for cultivating more than the presumptive limits (30 plants) and within the limits of your red card expanded plant court. The DA will present the case that you cultivated more than 30 plants. You will then be able to raise and prove an affirmative defense that “such amounts were medically necessary.” Under Amendment 20, patients or primary caregivers with more than two ounces of marijuana or six plants may raise an affirmative defense in court if they are charged with violating the state law but can show that the amount they possess is “medically necessary to address the patient’s debilitating medication condition.” Colo. Const. art. XVIII, § 14(2)(a). To raise this affirmative defense, a patient or primary caregiver must show: “(I) The patient was previously diagnosed by a physician as having a debilitating medical condition; (II) The patient was advised by his or her physician, in the context of a bona fide physician-patient relationship, that the patient might benefit from the medical use of marijuana in connection with a debilitating medical condition; and (III) The patient and his or her primary care-giver were collectively in possession of amounts of marijuana only as permitted under this section.” Id.

This medical necessity affirmative defense analysis starts with the doctor’s recommendation, which the doctor will be required to justify from medical treatment perspective. This will likely be difficult since the doctor will not likely recall why the recommendation was made and was likely paid more money for the recommendation, rather than recommending additional plants based on medical considerations. You should be prepared to present other evidence about how sick your patients truly are when compared to other medical patients. The key here is to make sure you only cultivate expanded plant counts for the truly ill, not a person who merely paid the doctor more money for the expanded plant count recommendation. In order to establish the medically necessity affirmative defense, you must first present some credible evidence on that issue, for example the expanded plant count recommendation. Colo. Rev. Stat. 18-1-407(1). The courts have interpreted this “credible evidence” to mean that “a properly raised affirmative defense is treated as though it were another element of [the] offense [at issue].” People v. Garcia, 113 P.3d 775, 784 (Colo. 2005). Once you establish the medical necessity affirmative defense, the DA must take on an additional burden to disprove that the affirmative defense beyond a reasonable doubt.

Under Amendment 64, an adult over 21 is permitted to cultivate 6 plants (3 in flower, 3 in vegetative state) and possess 1 oz. of usable marijuana. There are no provisions to cultivate more than 6 plants or to combine your cultivation efforts with others. This is sometimes referred to as a “collective.” This is not typically a legal arrangement and it is highly likely that the collective is diverting marijuana to the black market. It could theoretically be possible to join with a few friends and share in the costs and expenses of a cultivation room. But, it is very important to make sure that no one sells their personal marijuana to anyone and that each set of 6 plants is clearly marked by person and not strain. Should law enforcement investigate they will presume the grow is black market and prosecute each of the cultivators. Any evidence of sale (money, packaging equipment, scales, etc.) will be used to support the DA in making a case that the grow was black market.

B. Colorado Criminal Consequences:

We need to start with the premise that marijuana cultivation is illegal under Colorado law and Amendments 20 and 64 afford only defenses to criminal prosecution. I understand this statement runs contrary to popular thinking, but the criminal laws are still on the books and still vigorously prosecuted. Remember, law enforcement does not like marijuana legalization and will use every means at its disposal to prosecute personal cultivation since they are powerless to prosecute the marijuana businesses.

There are many criminal consequences you open yourself up to if you operate a greater-than-six-plant marijuana cultivation. For instance: (1) To unlawfully dispense, sell, distribute, or possess with intent to manufacture, dispense, sell, or distribute marijuana or marijuana concentrate, or to attempt to do so, is a level 1 drug felony with a mandatory minimum sentence of eight years in prison and a five thousand dollar fine if the amount of marijuana is more than fifty pounds or the amount of marijuana concentrate is more than twenty-five pounds; (2) Unlawfully cultivating, growing or producing more than 30 medical marijuana plants outside of the protections of Amendment 20 is a level 3 drug felony and carries a prison sentence of up to four years. Colo. Rev. Stat. 18-18-406(2-3). If you find yourself in one of these situations, you should contact a skilled criminal attorney immediately.

C. Recent state laws regarding expanded plant counts:

The first of two laws affecting personal cultivation deals with plant count limits regardless of where the marijuana is cultivated (at home, a warehouse, a farm, etc.). The second law affects residential cultivation. Both laws create limits on Amendment 20 and 64. Many people assert that these two laws are unconstitutional and that they have a right to cultivate whatever a doctor permits or that as recreational cultivators they can combine with others and cultivate 6 plants per person without regard to any cap on the total number of plants. Unfortunately, as discussed above, Amendment 20 and 64 do not afford a general constitutional right to cultivate marijuana. The Courts repeatedly stated that the constitutional rights afforded by Amendment 20 and 64 are only the rights to criminal defenses in the context of criminal cases. That leaves the state and local governments free to limit where, when and how much a person is able to cultivate. There have been no serious legal challenges and the current state of the law upholds these local and state cultivation limitations.

Let us begin with state cultivation limitations. Effective January 1, 2017, a new state law prohibits primary caregivers from “cultivating, transporting, or possessing more than thirty-six plants unless the primary caregiver has one or more patients who, based on medical necessity, have an extended plant count.” Colo. Rev. Stat. 25-1.5-106(8.6). A primary caregiver cultivating more than thirty-six plants must register this information with the state licensing authority’s registry. However, even with the extended plant counts, “a primary caregiver shall not cultivate more than ninety-nine plants.” Id. at (8.6)(II)(B)(b). The ninety-nine-plant limit is strictly enforced, as only medical marijuana businesses licensed and properly authorized by state and local governments may cultivate more than ninety-nine plants. Id. at (8.5)(II)(b).

Next, in an effort to prevent marijuana diversion into the illegal market, Colorado lawmakers passed House Bill 17-1220 which sets a statewide limit of twelve (12) marijuana plants per residential home. The new law, which takes effect January 1, 2018, states, “regardless of whether the plants are for medical or recreational use, it is unlawful for a person to knowingly cultivate, grow, or produce more than twelve marijuana plants on or in a residential property.” In this context, “residential property” means a single structure providing one or more independent living facilities and any land surrounding the structure that is owned in common with the structure. Residential properties may be located in, for instance, agricultural or industrial zones where there is an “independent living facility.”

Though the 12-plant limit is the new statewide maximum, exceptions are permitted for medical marijuana patients and caregivers. Patients and caregivers may grow up to twenty-four (24) plants on a residential property with proper state registration and local approval for additional plants. But local governments must approve the additional plants. Local governments are heading in the exact opposite direction and are further limiting, not expanding, residential cultivation. Be advised that if the local plant total is less than 12 or 24 plants, you must comply with the local limitation. It is not possible here to deal with all of the local regulations and it is important to look into local ordinances in order to stay compliant. The rule may be hidden in zoning rules and charts, business licensing provisions and other areas. If you have any difficulty learning about the local limitations, you should consult with qualified legal counsel to make sure you know what is expected from your local authorities. Be advised that violation of this state law can result in criminal, not just civil, prosecution including felony charges.

Federal Law

No discussion of marijuana law would be complete without a discussion about federal marijuana laws and policies. Even though the State of Colorado has decriminalized marijuana use and possession, marijuana is still illegal under federal law. According to the Controlled Substances Act (CSA), marijuana is a schedule 1 drug, making marijuana possession, distribution and use felonies with a mandatory prison sentence. For example, under the CSA possessing fifty (50) marijuana plants carries a sentence of up to five (5) years in prison. Many, many people believe that as long as you cultivate less than 100 plants it is not federally illegal or that you will not be prosecuted. That is completely untrue. Under the CSA, the federal government can prosecute you for a single joint or even a seed.

Up until this point, the federal government has opted not to enforce federal laws regarding marijuana use and possession for operations functioning under state law. However, this choice is left to the federal executive branch (headed by the President) and may be changed at any time. If the federal government chooses to enforce the CSA, it is possible that all marijuana growers and users would be subject to federal prosecution. Such a change in policy could happen with little or no warning.

If you have any questions about this research or seek additional information not included above, please do not hesitate to contact our office. Again, you can stay on top of the legal issues and any marijuana news through our blog and newsfeed: www.marijuanalawscolorado.com.

Stay legal and stay safe.

Out of State Ownership 101 for 2017

As you may know, the Colorado legislature approved out of state ownership participation for medical and recreational marijuana business starting in 2017. This sea change was precipitated by the lack of banking and other proper lending. Under the new rules, out of state investors can now receive profit in exchange for investment. The basic parameters are:

• US Citizenship is required for each and every owner;
• At least one of the owners must be a one-year Colorado resident and if even one of the owners is out of state, the ownership group is limited to 15;
• Intellectual property profit based licensing agreements, employee profit sharing and institutional investors are classified as Indirect Beneficial Owners. However, with regard to intellectual property licensing, the fee must be “commercially reasonable.” It is not clear what “commercially reasonable” means, but a conservative approach is advised until MED establishes benchmarks;
• A Qualified Passive Investor is a person who is both passive with respect to the operation of the business and owners less than 5% of the business; and
• All owners, in or out of state, must first be approved by MED. The criteria for approval is not yet clear, but you should expect similar criteria for current ownership including regarding felony convictions and good moral character. Since MED approves people using criminal background checks, this out of state ownership does not contemplate large corporate ownership or ownership by publically traded companies.

The application process begins 1/1/17 and the application is not yet available. It will require a meeting which meetings are currently being scheduled approximately 12 weeks out. Approval will occur within 90 days after the meeting.

I counsel that any agreements for out of state ownership continue to include MED and local approval as contingencies for becoming effective. We have no idea what MED will approve or deny at this point.

Out of state investment in the Colorado marijuana business.

The State of Colorado has introduced a bill regarding marijuana ownership rules. SB 16-040 has passed the Colorado House and Senate and is now awaiting signature by the Governor. These changes would impact any new applications occurring on or after January 1, 2017. The changes apply to both medical and retail licenses.
These changes are generally beneficial to marijuana business owners, since they would allow marijuana businesses to obtain more funding from out of state lending sources. The bill creates three types of funding relationships: direct beneficial interest owner, indirect beneficial interest owner, and qualified limited passive investor.

Direct Beneficial Owner:
A direct beneficial interest owner is a person who owns part of the business. This could include members, managers, officers, and directors. Businesses can have as many direct beneficial interest owners as needed as long as the individual has been a resident of Colorado for at least one year. Non-residents can be direct beneficial interest owners as well, but need to receive a finding of suitability from the MED. Such investors include institutions like banks and insurance companies.

Indirect Beneficial Owner:
Indirect beneficial interest owners are permitted economic interests, and would include situations like intellectual property royalties, employee profit sharing, or institutional investors. Businesses may take advantage of qualified limited institutional investors, but those investors may own only 30% or less of the marijuana business. The bill does not specifically provide for the residency requirements of indirect beneficial owners, but it is likely that the MED will use a standard similar or less rigid than that for direct beneficial owners.

Qualified Limited Passive Investor:
Qualified limited passive investors are passive investors with less than 5% share in the business. The state licensing authority will run a limited background check on these individuals, and may conduct a more thorough investigation if needed. The MED will create regulations regarding these individuals, and the specific qualifications are not included in the bill. The intent is for these to be the most minor form of investor, presumably requiring the least review and lowest requirements. These investors must be United States citizens, but do not need to have any Colorado residency.
These three categories will allow new businesses to receive startup funds from out of state investors and be generally more permissive of different ownership structures. The hope is that this will benefit Colorado businesses and reduce the amount of illegal out of state money introduced.

Conclusion:
The opportunity for out of state investment is beginning to open up. Since this is new, it is likely that the MED will struggle with defining the above categories and the approval process. As always, proceed with great caution and a conservative approach to such investment.

Be sure to read the full proposed changes here:

http://www.leg.state.co.us/Clics/clics2016a/csl.nsf/fsbillcont3/53F678C55E0B703987257F2400644D67?Open&file=040_enr.pdf

Marijuana DUI, do’s and dont’s

During the holidays DUI enforcement increases dramatically. Unfortunately, this large net will inevitably capture cannabis users who were not driving while impaired. As most of you know, in a last minute political compromise, the Colorado legislature passed a marijuana DUI law that creates an inference that a person with 5 ng. of THC in their blood is DUI. Such levels are common, even considered low, for regular cannabis users.

Moreover, the 5 ng. threshold is dubious science at best and, in many scientific circles completely wrong. These cases are defensible on many levels including attacking the science of a 5 ng. threshold and also whether cannabis even impairs driving at all.

However, an ounce of prevention is worth the expense of mounting a defense. Here are some tips to help you or your friends who use cannabis:

1. Do not travel with cannabis in the car. The smell of cannabis is the most likely cause of the police officer’s suspicion;
2. If you do travel with cannabis in the car, place it in a scent proof container (glass or other such container) in the trunk. It is illegal to have cannabis in an open container in the car and the police have a right to search your car if arrested;
3. Do not smoke in the car;
4. Do not consent to a search of the car;
5. Do not admit to consuming cannabis. If the officer presses you, tell him or her,“I have friends that are attorneys and they have told me not to answer these types of questions.” Do not lie. Simply repeat this phrase. Most juries will hold the lie against you, but may also have heard you should not answer these types of questions;
6. Do not do roadside tests. They are voluntary and you will not lose your license if you refuse. This includes the “following the pen with your eyes test.” The police will not be fair in evaluating your performance and it will be used against you; and
7. You do not have to do the blood test. However, if you refuse the DMV will take action against you for refusing. This action includes two months of no driving (not for work, the doctor or any other reason). You will get your license back after two months, but you must have an ignition interlock on your vehicle for two years. It only tests for alcohol, but it is expensive and a real pain in the rear. Additionally, you will need SR-22 insurance for one year and you will have to complete 12 alcohol and drug classes. Finally, please be advised that if you refuse the blood test the fact that you refused CAN be used against you at trial.

Finally, there is one important and creative way to protect yourself if you regularly use cannabis. Go to your primary care doctor and request a blood test that includes testing for THC. Then take the results back to your doctor and ask him or her if they believed you to be impaired when you made the request. Let the doctor know you just came from work or some other task in which you were fully functional. See if the doctor will confirm, in writing, that despite your positive result for THC you were not impaired in their medical opinion. This will provide you with a baseline for your normal THC level and that you were not impaired at that level. Then, if you take a blood test in the context of a DUI charge, you will have a baseline upon which to defend yourself. Perhaps you could ask a co-worker or friend to confirm that you were not impaired in the time just before or after the blood test.

Expanded Plant Count – Proceed at your own risk!

First, marijuana, medical or otherwise, remains illegal under Colorado Criminal Law. The protections afforded by Amendment 20 and 64 are interpreted by the Court to provide for an affirmative defense to felony prosecution. Only the strictest and narrowest compliance with either Amendment 20 or 64 stand a chance of acquittal at felony trial.

I. No sales of marijuana are permitted.

At the outset it must be stated and clearly understood that there can be no sale of marijuana, medical or otherwise, except by licensed marijuana businesses under the direct supervision of the Department of Revenue, Marijuana Enforcement Division. Any sale, even a single joint, constitutes a felony to which there is no defense whatsoever. “Donations” and other devices designed to disguise the fact of a sale have proven useless. Indeed, the fraud of such a device is usually what causes the remaining defenses to fail.

A primary caregiver also cannot sell marijuana to his or her patients. A primary caregiver may only charge the cost that it takes to produce the marijuana on two ounce basis. The medical marijuana program contemplates that the primary caregiver has significant responsibility for the wellbeing of the patient and is doing this service primarily for compensation. The law only permits recouping of costs and not profit.

II. Exception to criminal law defense.

Second, a patient or primary caregiver is afforded a greater defense, “exception to criminal law,” when the person cultivates 6 plants (3 in flower and 3 in vegetative state) and possesses two ounces. All marijuana product greater than 2 ounces must be immediately destroyed. Otherwise, the person commits the felonious crime of either possession of marijuana or possession with intent to distribute marijuana. Typically both felonies are charged.

III. Medical necessity defense.

For cultivation of more than 6 plants, in this scenario 99 plants per property, the patient or primary caregiver “may raise as an affirmative defense to the charges of violation of state law that such greater amounts were medically necessary to address the patient’s debilitating medical condition.” Colorado Constitution, Article XVIII, Sec. 14(4)(b). This is a medically based affirmative defense in which the Defendant is required to prove by a preponderance of the evidence that:

(1) he/she suffers from a chronic, debilitating medical condition;
(2) that greater than 6 plants cannot possibly address the seriousness of the medical condition; and
(3) that the doctor who made this recommendation did so based on careful application of medical judgment in the context of a bonafide patient- physician relationship.

This defense is almost always a complete fraud and the doctors who provide such expanded plant count recommendations do so only for an additional fee. Again, premising a defense on a foundation of medical fraud almost invariably results in conviction.

In my numerous meetings where such ideas are discussed, I typically state that “all people who qualify for medical marijuana are presumptively disabled. In order to justify an additional plant count, you would have to prove that you were more profoundly disabled than all of the other disabled patients who qualify for a medical marijuana recommendation. For instance, if I have chronic back pain, I take ibuprofen. If I have Stage 5 cancer, I have a morphine drip. The expanded plant count is the equivalent of a morphine drip and the medical condition must be commensurate with Stage 5 cancer.”

The response I usually get is “I make edibles.” I respond “there is no choice of consumption defense. And, the police know that edibles are made with trim. They also know that a competent grower gets approximately 1 pound per plant. Accordingly, even if you make edibles, 6 plants is more than sufficient. So, the assumption is that you sell marijuana for a living.” As stated before, only strict compliance with Amendment 20 or 64 has a chance of success a trial. If the police discovery cash, substantial quantities of marijuana, evidence of sales (typically people are using their smart phones or computers to transact the marijuana making proof of criminal activity quite simple) or any other indicia of distribution, then even a perfect medical necessity defense would fail. I have had numerous such instances.

IV. Law enforcement crackdown and cooperation with federal agencies.

Also, the police are under tremendous pressure to stop the hundreds of pounds of marijuana leaving the state each day. The fact that such copious quantities of marijuana leave the state each day has resulted in lawsuits from our neighboring states and there is now lock step cooperation with federal law enforcement to which there is no defense whatsoever to federal criminal prosecution. I have worked on several cases in which local law enforcement was working with the Attorney General, who was working with the United States Attorney General, DEA and the IRS (for tax evasion of an illegal enterprise).

V. Landlord liability and civil forfeiture.

Next, the question of prosecution and forfeiture for landlords must be addressed. At the outset, the crime of cultivation includes both the cultivation itself, as well as permitting a property owned by a person to be used for such purposes. CRS 18-18-406(3). There is also a likely charge of conspiracy if the landlord is aware and permits the cultivation. CRS 18-2-201. That means the landlord is jointly responsible for any and all crimes committed at the property. Civil forfeiture of the property is quite common and often is handled by federal authorities. The only defense to forfeiture is the “innocent owner” defense in which the landlord does not know, nor have any reason to know about the marijuana activities. I have had cases dismissed only to have the property contemporaneously seized by federal authorities.

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