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.

Colorado Amendment 64

Dear Friends,

As you know, on Tuesday, Colorado voters passed Amendment 64 which decriminalizes adult possession (to a certain degree) of marijuana and provides for the establishment of MJ retail businesses. I predict that within a year or so of that program becoming fully operational, the MMJ business as we know it will be virtually extinct. Why would a person suffer the indignity of going to a doctor, submitting paperwork to the state and be placed on a registry if it was no longer necessary? I predict they will not.

Accordingly, MMJ businesses, caregivers and patients need to begin preparing for this inevitability. Fortunately, MMJ businesses will receive preference in licensing for a MJ business. We are prepared to help you with this transition.

I will be working with the local and state government, as well as the federal government to make Colorado’s dream a legal reality. It is my goal to take MJ out of the shadow of fear of state and federal prosecution. I will keep you apprised of my efforts, successes and any roadblocks I encounter along the way. I aim to finish what we started three years ago with the MMJ regulatory efforts.

If you would like to discuss how Amendment 64 affects you, your business, your patient rights, etc., we are happy to meet with you. Please contact my paralegal, Lisa, at extension 4 to schedule a meeting.

Finally, we are preparing to launch a new website dedicated to MJ laws and will let you know when it is online.

Sincerely,

Jeff Gard

DEA on the warpath

Last week, the DEA raided a medical marijuana caregiver’s home in Highlands Ranch. This is one of several recent raids on medical marijuana businesses, including Full Spectrum Labs in Denver and another lab in Colorado Springs. It is clear that the DEA is not going to go away quietly. As we tell our clients, you should continue to remember that the federal government does not recognize medical marijuana and considers all medical marijuana activities illegal. It is possible that the DEA will continue to investigate medical marijuana sales and cultivation. Accordingly, it is necessary to stay under 100 plants when cultivating medical marijuana. Any plant over 100 requires a mandatory five-year federal prison sentence if convicted. Forfieture of any property used in the cultivation or sale of medical marijuana is also a real possibility. Until the federal government ceases any further prosecution of medical marijuana you should be as careful and quiet as possible in your medical marijuana endeavors. Stay legal and stay safe!

Injunction and the Department of Health.

Yesterday an injunction was granted against the Department of Health for adopting the Clendenin definition of primary caregiver without public input. That input currently is scheduled for mid-December. However, it is important to remember that judicial branch of government is responsible for constitutional interpretation and that Amend. 20 is a constitutional amendment. As such, it is the appellate courts that ultimately will decide the constitutional definition of “primary caregiver,” not the Department of Health. Accordingly, I continue to believe that, unless the Colorado Supreme Court says otherwise, the Clendenin definition should be considered “the law” and you should all continue to roll out additional caregiving services immediately. Don’t be a test case for the next wave of judicial decisions. Remember, all such decisions are made in the context of your criminal case!!!

CDPHE decision inevitable.

The CDPHE meeting and adoption of Clendenin is obvious and inevitable. CDPHE is merely charged with administrating the constitutional amendment, which necessarily includes incorporation of any rulings by the Court of Appeals and/or Colorado Supreme Court. It is those two entities who define that which is constitutional (or not) and CDPHE is required to follow such rulings in carrying out its adminstrative function. Rather than “tilt at windmills” and complain about how unfair the ruling is, it would behoove everyone to immediately comply with the strict requirements of Clendenin while law enforcement is still gathering its forces. Perhaps by complying with Clendenin, we can present a different (i.e., winnable) case to help modify this decision going forward. Failure to comply is likely to result in prosecution without the benefit of a MMJ affirmative defense for caregivers. In such a case, the trial would only consist of a presentation by the DA of how much MJ was produced or sold, without any reference to MMJ or caregiving. All of our time is better spent finding new and creative ways to comply with Clendenin, rather than listening to the inevitable adoption of the case by CDPHE.