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.

City of Boulder Medical Marijuana Business Moratorium

The Boulder City Attorney, Mr. Thomas Carr, recently requested and was granted a moratorium regarding medical marijuana businesses in the City of Boulder. The moratorium is expected to be extended for 6 months. I suspect this is a prelude to a request from Mr. Carr that the City Council enact a “cap” on the number of medical marijuana businesses in the City.

This is highly problematic. The moratorium affects existing businesses, not just new businesses. Under the current ordinance, the City requires a new license in the event the business wants to, or needs to, change locations. A new license is also required in order to transfer the business to a new owner. By contrast, the State of Colorado amends the existing license for both scenerios and does not require a new license.

In view of the recent Federal threat of criminal prosecution and civil forfeiture for landlords and medical marijuana businesses located within 1000 feet of a school, this is quite terrifying. For instance, if a medical marijuana business is within 1000 feet of a school (CU?, a day care?), the Feds require the business to move within 45 days. The City of Boulder moratorium makes this impossible.

Finally, the City’s actions demonstrate veiled hostility and fear toward the medical marijuana industry. The moratorium is likely only a first step. It is incumbent on all City of Boulder medical marijuana businesses to band together and oppose any further interference with medical marijuana businesses, which are the most regulated businesses in the history of the State of Colorado. City officials need to be reminded that they are representatives of the citizens of Boulder and personal political agendas have no place in representative government. If they are unwilling to support the industry, they need to be replaced with people who support local and state law regarding medical marijuana. Please attend the 2/7/12, 7:00 p.m., public hearing and let the Council know that further regulation, including the proposed moratorium, will not be tolerated.

Federal crackdown on Colorado Medical Marijuana

As you may know, the Federal Government is now attempting to crack down on Colorado medical marijuana dispensaries and other medical marijuana businesses. Last week, the Feds sent letters to several medical marijuana businesses that were located within 1000 feet of a school. The letters instructed the businesses to close within 45 days or face federal prosecution and civil forfeiture. The Feds are also targeting the landlords.

By way of review, the Feds purported authority over state medical marijuana programs stems from a 2005 U.S. Supreme Court Case, Gonzales v. Raich, 545 U.S. 1, which can be viewed at:

http://www.law.cornell.edu/supct/html/03-1454.ZS.html

A close reading of this case reveals that Colorado medical marijuana business regulations are very different from California. Recall that medical marijuana businesses in Colorado must be owned by two year state residents, there is no reciprocity for out-of-state medical patients and the state requires that the businesses grow their own medicine under strict state supervision. This scheme could possibly carve out an exception to federal authority over Colorado medical marijuana. Now if we only had an attorney general who was interested in supporting Colorado citizens and Colorado laws instead of taking pot shots at Obamacare…. Stay tuned.

Court of Appeals guts MMJ Amendment

Today, the Colorado Court of Appeals announced its decision in the case of People v. Clendenin, a case handled by attorney Robert Corry. The case dealt a serious blow to patients rights and casts doubt on whether a primary caregiver will receive any legal protection. The case can be read at: http://www.cobar.org/opinions/opinion.cfm?opinionid=7372&courtid=1.

It is more critical than ever to view the MMJ laws as conservatively as possible. Under the Clendenin case, the Court of Appeals ruled that the primary care-giver affirmative defense does not apply where the provision of marijuana is itself the substance of the relationship. As I have told prosective caregivers who seek my advice, caregiving means more than cultivating and/or providing MMJ to your patient and any such activities must be limited only to patients who have assigned you to be their caregiver (i.e., no walk-in business!). Caregiving requires a personal relationship and providing MMJ to your patient is only one small part of managing the patient’s well-being. In order to receive any protection a caregiver must (1) have a personal relationship with the patient; (2) be assigned the right to cultivate and provide MMJ by and on behalf of the patient; and (3) MMJ must only be a small part of your caregiving service.

Medical marijuana dispensaries are legal

Are medical marijuana dispensaries legal? Yes.
A “dispensary” is a term of art, which defines a caregiver’s administration of his/her duties to the patient. Simply put, caregiving requires a basic business structure for reasons including collection and payment of sales tax, providing a place in which the patient can obtain medical marijuana (like a pharmacy) and to produce the medical marijuana on the patient’s behalf.  This collection of activity, for lack of a better term, is currently deemed a ”dispensary.”

Briefly, under the terms of Amendment 20 only a patient and/or a caregiver assigned by the patient to provide medical marijuana may legally possess and/or cultivate medical marijuana.  Per the terms of the Amendment, the patient and caregiver may collectively possess 6 plants and 2 ounces of medical marijuana.  Accordingly, a “dispensary,” the business of a caregiver, must have a direct caregiver/patient relationship in order to fall under the Amendment’s protection.  Providing medical marijuana to anyone without such a relationship falls outside of the Amendment’s protection.  New Options Wellness Center and Boulder County Caregivers are two examples of caregivers who strictly comply with the terms of the Amendment.
Next, the issue of caregivers versus dispensaries recently was debated by the Colorado Department of Public Health and Environment and it was determined that “dispensaries” were necessary to effectuate the intent of the statute.  How else are people able to obtain medical marijuana?  Pharmacies do not carry medical marijuana.  Not everyone wants to, or is capable of, cultivating medical marijuana.  As such, in order for patients to procure their medicine, it is necessary for them to assign a caregiver to procure and/or cultivate medical marijuana on their behalf.  As long as the limits (6 plants and 2 ounces per patient) are strictly observed by both the caregiver and patient, no state crime is committed – regardless of the opinions of Mr. Garnett.
Further, the fact that “dispensary” is not mentioned in the Amendment is a ”red herring” argument.  There are a great many things not referenced in statutes, amendments, etc., that are deemed necessary to effectuate the intent of a written law.  For instance, the use of computers and support staff by the District Attorney’s office are not specifically set forth in the statutes governing District Attorneys.  The use of congressional staffers and Supreme Court law clerks are two other such examples.
Finally, Mr. Garnett as a matter of the constitutional separation of powers, is limited in his authority to enforcement of existing laws.  It is for the legislature, through the Colorado Department of Public Health and Environment, not Mr. Garnett or other District Attorneys, to determine the intent of written law and to seek modification of Amendment 20.  While he may not agree with the Amendment, it is Mr. Garnett’s job to set his personal feelings aside and enforce (or not) the will of the electorate and respect the determination of the Colorado Department of Public Health and Environment.
Jeff Gard
Boulder attorney