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.

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.

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.