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.

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.

Marijuana Regulations Completed, a few points.

Since my last blog entry, there have been a few changes to HB-1317, the bill which regulates retail marijuana businesses. The bill has now passed both the House and Senate and is on the Governor’s desk for his signature. Once that is completed, the bill will become a law (those of you familiar with School House Rock already know that!). The changes include:

1. There will be a 9 month waiting period for new businesses, instead of 90 days. If you do not already own a MMJ business, you will be able to apply on 9/1/14. Prospective business owners can file a notice of intent to own a MJ business after 1/1/14 and must provide a deposit that will be applied to the application fee. The deposit amount is not specified.
2. The bill expressly outlaws the “collective model” and requires that any sale or other distribution of MJ be done only by a licensed MJ business.
3. The MED is required to implement a “seed to sale” tracking system for all MJ sold. This idea was previously shelved by MED.
4. No delivery of MJ.
5. There is a THC content limit for edible MIP products.

There are two other bills that were passed, HB-1318 and SB-283. Here 5 things you should know about each of them.

HB-1318, “the tax bill”:

1. There is a 15% excise tax that will be assessed for wholesale sales of MJ to Retail Marijuana Centers (RMC).
2. The excise tax will be based on an average market price established by the State. The tax must be collected by the wholesaler and a report for such sales filed once a month.
3. The excise tax will apply to the transfer of MJ from the grow to the retail center even if the business owns both the grow and retail center.
4. There is a 10% State sales tax for MJ sold by the RMC. This can be raised to 15% without voter approval.
5. The sales tax will be shared with local governments, but local governments are also permitted to impose additional local taxes.

SB-283, the miscellaneous bill:

1. Local governments may ban the use of butane and compressed gas for use in extraction.
2. The bill creates a responsible vendor program that will require training. There will be created a “certified trainer” and all vendors must be certified.
3. Marijuana business contracts shall not be void despite the federal argument that all such businesses and their contracts are illegal.
4. There will be no exception to the state smoking laws that will permit a private club or other such business to permit MJ use.
5. No open containers of MJ in vehicles. The MJ must be in an unopened, sealed container or be placed in the trunk of your car.

State Rules on Amendment 64 Completed

The State of Colorado recently passed HB-13-1317, 1318 and Senate Bill 13-283.  The bills create a licensing a regulatory scheme for recreational marijuana businesses and address the interaction with medical marijuana businesses.  The bills can be viewed in their entirety here:

http://www.leg.state.co.us/clics/clics2013a/csl.nsf/fsbillcont3/807A035CD583C95E87257B1F005CDB59?Open&file=1317_01.pdf

20 things you should know about the bill:

1. The Medical Marijuana Enforcement Division (MMED) will be changed to the Marijuana Enforcement Division (MED) and  will regulate both MJ and MMJ.
2. Existing MMBs can apply to convert after 10/1/13 and the conversion application is $500.  The businesses can begin operation as a MJ business after 1/1/14, assuming that local approval is also obtained during this timeframe.  The MMB may continue to operate as a MMJ business until such time as the application is approved at both the state and local level.  It is not clear whether the businesses themselves or the people who are currently licensed will be permitted to convert.�
3.  Everyone else can apply 9 months later, i.e., 9/1/14 and the application is $5000;
4. There is no vertical integration requirement for recreational marijuana businesses (RMB) after the first 9 months, i.e., 9/1/14.  After that, growers can be “grow only” businesses and sell to all RMBs and to infused product manufacturers.  RMBs can sell to anyone over the age of 21.  Existing MMJ business cannot be separated into a cultivation operation and retail sales operation.
5. Local approval still required for all MJ and MMJ business licensing.
6. In order to work at and/or manage a RMB, the person must be a Colorado resident and a person must be a 2 yr. state resident to own such a business.
7.  The RMB can sell up to ¼ oz  to non-residents over the age of 21.
8. The RMB cannot sell ANY product containing alcohol or nicotine.  This may impact some MIPs who make alcohol-based tincture.�
9. All MJ must be packaged and sealed at the point of sale in a non-transparent container.  There are also stringent labeling standards, including THC and cannabinoid content.
10. MED will issue further regulations by 7/1/13.
11. There is a 1000 ft. buffer between schools, alcohol and drug treatment facilities.  The definition of a school includes a residential child care facility.
12. Once the MMB elects to convert to a RMB, the plants and product automatically become retail plants and product.  It i possible that there will be limits on the number of plants or amount of product the business can possess.  The City of Boulder is proposing its own limits (500 plants) and the state law supports such limitation decisions by local licensing authorities.
13. A MMB can operate both a medical and non-medical MMB at same location only with local approval do so and would be required to create physical separation between the two businesses, including separate entrances.
14. An employer is not required to tolerate MJ use in the work place and each business is free to set its own drug policy, including zero tolerance.
15. There are a lot of lot of marketing prohibitions and you should carefully review this section if you plan to advertise.
16. There will be created a licensure class system. The licenses could be issued based on square footage, number lights, amount of lumens, the measured “lit canopy,” the number of plants or combination. Stay tuned.
17. MED is permitted to limit the number of licenses issued and also gives this power to local authorities.
18. Failure to pay taxes can result on denial – be careful to be current with the IRS.
19. The lifetime drug felony ban on ownership was changed to 10 years from the date the matter was concluded, including the completion of probation or parole.
20. Licensee may move his permanent location to any other place in Colorado with local approval.  It is unclear whether this can be made part of the conversion process or is to be done after the process is complete.

Colorado Amendment 64 and the Federal Government

As you know, Colorado voters passed Amendment 64, which permits limited adult possession of marijuana and the establishment of marijuana retail businesses.
However, the federal government responded with “saber rattling” and a stern warning that marijuana is still illegal federally. Is the federal government really ready for a state’s rights showdown? This seems unlikely.

The passage of Amendment 64 was a bi-partisan effort that united conservatives like Tom Tancredo, law enforcement and democrats. State’s rights is good politics and politicians would be wise to heed the call to end marijuana prohibition. The voters in Colorado grew tired of waiting for politicians to end the war against marijuana and took matters into their own hands. The complete legalization of marijuana is inevitable.

I encourage everyone interested in this issue to contact their federal representatives and let them know it is time to end the disparity between state’s rights and the federal prohibition against marijuana. I am working with the representatives for Colorado and am hopeful we can make Colorado voters’ dream a legal reality.

No more state moratorium and the procedure for new medical marijuana business licenses

As of 7/1/12, there is no more state moratorium for new medical marijuana business licenses. This means a new medical marijuana business can be formed and licensed. It also means that existing businesses can now expand, add another OPC, open a new MMC, or add a MIP.

According to MMED, the procedure for new licenses will be similar to “change of ownership.” This means that you will be provided with a checklist of items to be completed and documents to be provided to the state. Once the list is complete, it is necessary to schedule a meeting with either Mr. Lewis Koski or Mr. John Seckman to review the documents. Be advised that both the application and licensing fees are due at the time of application. MMED anticipates that there will be few such applications. Yeah, right!

Next, be reminded that you need local approval of any such business application. Be sure to check with the local authorities regarding their acceptance of such applications. If they won’t, the state won’t. If they will, the state will. For instance, the City of Boulder passed a 9-month moratorium. Mr. Seckman advises that state and local processing of the license can happen at the same time.

Additionally, new applications will be handled on a “first come, first serve” basis. No preference will be given to existing businesses. However, as a practical matter, MMED would already have a file on the business and a lot of the processing work may already be done.

Finally, be reminded that each MMC must have its own OPC. You cannot simply add a retail and attach your existing OPC to it. You may be able to subdivide your OPC into two OPCs, but local and state approval would be required. Of course, you can add more than one OPC to an existing MMC.  However,  unless and until the new license is granted by both local and state officials, YOU CANNOT START OPERATING!. You can only operate after both licenses are issued.

If you need our help, particularly in your meeting with MMED, please contact us.

Medical Marijuana and Probation

Well, it finally came to pass. On February 2, 2012, the Colorado Court of Appeals issued a decision on the use of medical marijuana on probation. Unfortunately, the Court of Appeals determined that probations CANNOT use medical marijuana while on probation. The case, People v. Watkins, 2012CA15, was decided on the basis that a probationer cannot violate any law during probation.

The Court of Appeals reasoned that the phrase “cannot violate any law during probation” includes violation of federal law. As you should all know by now, any use, possession, sale, or cultivation of marijuana, medical or otherwise, continues to be a violation of federal criminal law.

It is curious that the Court of Appeals fell back on federal criminal law to resolve this question. The Colorado state courts, including the Court of Appeals, do not have the authority to enforce federal criminal law. It would seem that, in order to rely on federal criminal law, it would be necessary to have a contemporaneous federal criminal case.

Additionally, it stands to reason that Colorado courts are limited to enforcing Colorado criminal laws. As you know, Amendment 18/20 creates an exception to criminal law where patients and/or their primary caregivers are acting within the parameters of the Amendment. Probation is a creature of Colorado criminal law. As such, it is arguable that the Colorado court cannot impose any restrictions on compliant medical marijuana activities as a condition of probation – again, a creature of Colorado criminal law.

It appears that things are going to get worse before they get better for medical marijuana patients. Colorado courts are now relying on federal law to justify their limitations on medical marijuana activities, rather than enforcing Colorado laws using Colorado statutes and constitutional amendments. I suggest you contact your U.S. congress person and U.S. senator to let them know that a federal change is needed if Colorado medical marijuana laws are to have any meaning or protection.

City of Boulder Moratorium/Federal Threat

At last night’s Boulder City Council meeting, the Boulder City Attorney requested a six month moratorium for medical marijuana businesses. On the surface, this sounded like a good idea – keep new businesses from coming in for six months. However, the reality was that the proposed moratorium was intended to prevent existing businesses from bringing on investment, transfer the business to a new owner, expand the existing business or transfer to a new location. With the very real threat of Federal prosecution looming over the industry, the moratorium would prevent medical marijuana businesses from being able to move out of harm’s way.

In response, I drafted a letter to the City Council and, in particular, Councilperson K.C. Becker. I proposed that the moratorium not include existing businesses. Councilperson Becker took the letter and crafted a new ordinance that excluded existing businesses. After several hours of wrangling and heartfelt testimony from myself and several medical marijuana business owners, employees and patients, the City Council adopted the Becker Ordinance, City of Boulder Ordinance Number 7834. The ordinance permits existing businesses to proceed as usual.

In the waning moment of the public hearing, the moratorium was amended, as follows:

1. The moratorium for new businesses was extended until 11/9/12;
2. Existing businesses will be able to move forward with expansion, investment, sale and relocation after 3/8/12; and
3. New fees we added for change of business entity ($2,000), addition of financiers ($2,000), modification of premises ($3,000) and change of business manager ($150).

Finally, approximately 21 medical marijuana centers were identified as being in harm’s way of Federal prosecution. Those centers located within 1000 ft. of licensed day cares, schools (including the University of Colorado) and public housing units are a risk. Accordingly, I suggest that if you, or anyone you know, is within this danger zone the business should immediately obtain a new location before Federal prosecution visits the City of Boulder. I know this is a tough situation, but the prospect of federal prison should be incentive enough.

Update on Colorado Medical Marijuana, final meeting with Dan Hartman

Dear Friends,

As you know, Mr. Dan Hartman was removed from his position as Director of the Medical Marijuana Enforcement Division due primarily to the efforts of our Attorney General, John Suthers. On the last day as Director, I met with Mr. Hartman to answer many of the questions posed by our clients and colleagues:

1. Q: If a MMB that was locally banned (i.e., Fort Collins, Longmont, etc.) withdraws its application and then moves to a favorable jurisdiction, when can they begin operation?

A: The local authority must approve the business, then MMED will move forward with state approval. The MMB will receive preference in the processing of the application.

2. Q: Can a MMC sell to a primary caregiver?

A: Only if the primary caregiver’s patient is homebound and the appropriate home delivery request has been approved by MMED.

3. Q: Can a MMC sell to a patient who has valid paperwork on file with the MMC?

A: No. A valid MMJ registry card must be presented every time, including patients that have assigned the MMC as their primary center.

4. Q: Can MMCs trade an equal amount of MMJ with another MMC without implicating the 70/30 rule?

A: No. There are no “trades” permitted. Payment from one MMC to the other MMC is required and there must be paperwork evidencing the transaction.

5. Q: Can a MMC sell kief hash and/or bubble hash wholesale to other MMCs without implicating 70/30?

A: The answer was not clear. Mr. Hartman acknowledged that hash does not count against allowable inventory and is treated like other infused products. However, he stated that it counts against 70/30. At this point, Mr. Hartman advised that hash is a problematic issue and will be addressed in future rule making. Stay tuned.

6. Q: Does a homebound patient have to assign the MMC as their primary center in order to receive a home delivery?

A: No. See #2 above. The sale is to the patients primary caregiver, who will deliver the medicine pursuant to authorization by MMED. This means that any homebound patient must assign a primary caregiver.

7. Q: Does hash count against allowable inventory?

A: No. See #5 above.

8. Q: Does the sale of trim count against 70/30?

A: This is complicated. If the trim is provided to a MIP and the MIP uses the trim to create an infused product, which product is then provided back the MMC only and not sold to any other MMCs, then it does not count against 70/30. However, if the trim is used by the MIP and the MIP sells the infused products to any MMC other than the MMC that provided to trim, it counts against the selling MMC’s 70/30.

9. Q: Can employees of a MMJ Vendor (i.e., has a MMED Vendor license) be under 21?

A: Not if the employee will be in a restricted access area for any reason.

10. Q: Will the 7/1/12 moratorium be extended?

A: Not in Mr. Hartman’s opinion. Mr. Hartman stated that MMED will not request it and the legislature “is in no mood to hear anything else about MMJ” at this point.