August 19, 2019

Spark the Discussion: Colorado Marijuana Industry 2.0 (Beta Version)

By Shawn Coleman

Spark the Discussion” is a monthly Legal Connection column highlighting the hottest trends in the emerging field of marijuana law. This column is brought to you by Vicente Sederberg, LLC, the country’s first national medical marijuana law firm.

As our shortest month draws to a close, so does the Amendment 64 Task Force.  While earnest work has been accomplished by the Task Force, there is still more to do.

The Governors A64 Task Force

Overall, the Task Force has tackled some fascinating issues, with a lot more to come. The Task Force has already adopted recommendations to maximize localities’ control over adult use marijuana establishments, establish consumer protections, and encourage our Congressional delegation to address banking and tax treatment for marijuana-related businesses. The Task Force has also recommended that the regulatory model for medical marijuana should be adopted for adult use marijuana. More importantly though, the Task Force recommended that out-of-state residents be allowed to purchase marijuana in Colorado from our regulated market—but only in small quantities.

Despite previous consensus from the Criminal Law Work Group that marijuana DUID would be impractical to consider, the main Task Force rejected that recommendation, instead supporting the DUID legislation introduced in the state house, HB 13-1114. The bill, introduced by Representatives Waller and Fields, is a revised version of a proposal that has been previously rejected by the General Assembly. Previous versions created a per se standard; this year’s bill instead establishes a permissible inference for individuals whose blood tests positive for 5 nanograms or more of THC. The bill also removes the presumption for alcohol DUI in cases of vehicular assault or homicide. Apparently the bill sponsors are taking “regulate like alcohol” seriously. A first hearing on the legislation was postponed because of the Judiciary Committee’s, and the entire House’s, focus on pending gun control legislation.

Currently on deck are over 20 Task Force recommendations, including recommendations related to marketing, establishing the enforceability of marijuana-related business contracts, and setting the excise tax rate. We fully expect the Task Force to find resolution on these issues.

From Capitol Hill to Capitol Hill

At the State of the State Address, the Governor Hickenlooper proclaimed, “As we regulate this industry, and any industry, let’s be sure we are fair, rational and science based.” Of course, he was specifically referring to the oil and gas industry; however, “any industry” should include the second edition of Colorado’s medical marijuana industry, also known as the Colorado Marijuana Industry 2.0.

As we all revisit marijuana regulation, the discussion must be rationally informed by the existing regulatory framework and the businesses that have complied with it. A fair, rational, and science-based approach makes sense, and is most easily accomplished by assessing the strengths and weaknesses of our current marijuana industry—the ongoing, and relatively successful, experiment known as the Colorado Medical Marijuana Code, C.R.S. §§ 12-43.3-101, et seq.

The General Assembly is tasked with building the fledgling marijuana industry while keeping Colorado’s best interest in mind. While the specter of federal intervention remains present, recent events may give lawmakers confidence to find solutions that work for Colorado.

Congressman Jared Polis (D-CO) has introduced H.R. 499, the Ending Federal Marijuana Prohibition Act, which would create the Bureau of Alcohol, Marijuana, Tobacco and Firearms to regulate marijuana federally while allowing states to continue marijuana prohibition within their borders. This bill has managed to get 11 co-sponsors of both parties representing every region of the nation. Meanwhile, medical or adult use marijuana legislation has been introduced in a growing number of states, in addition to the 18 states and Washington, D.C., where it is already legal. This evidences strength for the argument that civil matters, including marijuana, same-sex rights, and gun safety, will likely—as ought to—be resolved in state capitols.

Additionally, the president has spoken publicly of the need to harmonize state and federal laws, and the Department of Justice appears willing to wait and see. To that end, lawmakers here in Colorado must consider responsible regulations—possibly ones that even limit production—to guard against overproduction of marijuana. However, the only production within the state’s control is that which is produced by regulated businesses. Preventing unregulated large-scale production that could float across state lines is a challenge that is best addressed by moving deliberately on creating a consumer culture of acquiring marijuana through regulated stores, thus depriving the black market of a consumer base. Much like home brewing beer, the sooner marijuana for adults is available retail, the sooner home cultivation will be relegated to hobbyists and connoisseurs.

The passage of Amendment 64 by over 10 percentage points settles two important questions for the members of the 69th Colorado General Assembly:

  1. Marijuana reform is popular and politically safe.
  2. Marijuana as a regulated business is the intent of the voters.

During the legislative debate for the Colorado Medical Marijuana Code (originally HB 10-1284), a common reason to add heavy-handed regulations or vote against establishing the code was “the voters didn’t buy an industry with Amendment 20.” Now three years later, with the experience of marijuana storefronts, voters “bought” Amendment 64 with an industry as standard equipment. Interestingly, many of the counties with the most medical marijuana storefronts were greatly supportive of Amendment 64. November’s vote gave legislators a green light to enact sober and practical rules moving forward.

And it seems that members of the General Assembly have gotten the message.

The regulatory, excise tax, and criminal law bills to fully enact Amendment 64 may prove controversial yet; however, to date, the only thing more popular on the ballot than marijuana reform is marijuana legislation at the Capitol. The Colorado House has taken up two marijuana industry bills so far. The first, HB 13-1042 relating to state income tax (Rep. Kagan, Sen. Guzman), passed the Finance Committee unanimously. The second, HB 13-1061, the Responsible Vendor Bill, also passed unanimously in committee and has already passed the House on a vote of 55-9.

The Task Force is the beta test for Colorado Marijuana Industry 2.0. The legislature has the opportunity to experiment with this version and will hopefully be able to address any problems that arise. There is optimism that responsible marijuana laws may be the most sober conversation under the dome this year.

Shawn Coleman began working in cannabis policy as a Legislative Assistant for U.S. Representative Jared Polis in Washington D.C. He subsequently handled government affairs for Colorado Springs State Bank and served as Executive Director of the Cannabis Business Alliance. Shawn is currently a registered lobbyist with 36 Solutions and serves on the Board of Directors of the Colorado Youth Symphony and the U.S. Civil Rights Commissions Colorado Advisory Committee. 

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

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  2. TheEnvironmentalStandard says:

    I am currently researching marijuana growth in Northern California for a piece I am considering involving how the illegality of the marijuana growing industry causes more havoc than its alternative… For example, since farmers cannot get caught with their crops, they must be far removed from other citizens. In their isolations, they encounter wild predators like bears. To deter bear aggression, and keep maximum silence, they are rumored to be using poisoned salmon bait traps to kill would be trespassing bears. Further uncontrolled fertilizer pollution in local rivers create algae blooms which mitigate fish populations. Although the Clean Water Act still has authority over this industry, the forced secrecy allows most of this pollution to go unchecked. I would like to know more about the legalities of growing marijuana in Colorado, and wonder if there has been any similar environmental studies to date…

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