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.

Spark the Discussion: The “Amendment 64 Implementation Task Force”

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.

By Joshua Kappel, Esq. and Rachelle Yeung

When Governor Hickenlooper signed Amendment 64 into law, proclaiming marijuana legal to use, possess and purchase for adults 21 years-old or older in Colorado, advocates barely paused to celebrate their victory – and opponents barely recognized their defeat.

Instead, all sides immediately began working on implementing this historic initiative through the Governor’s “Amendment 64 Implementation Task Force.” The Task Force, created by an Executive Order of the Governor, is comprised of 26 members, which were selected for their wide range of interests and expertise – from representatives of the Attorney General’s Office and the Department of Revenue to medical marijuana industry groups and other stakeholders.[1]

The Task Force is assisted by committees, or “Working Groups,” each of which is co-chaired by a member of the Task Force and made up of additional stakeholders and members of the public. The five Working Groups are:

  1. Regulatory Framework
  2. Local Authority and Control
  3. Tax/Funding and Civil Law
  4. Criminal Law
  5. Consumer Safety and Social Issues

The various Working Groups have discussed a large range of issues, some of the issues are already addressed in the text of Amendment 64 while other issues appear almost unrelated. A full list of all the issues discussed, agendas, meeting times, and audio recordings are available on the Department of Revenue’s Amendment 64 Task Force website. The Task Force is scheduled to make its recommendations to the Governor, the State Legislature, and the Department of Revenue by the end of February.

During its first meeting, members of the Criminal Law Working Group came to a consensus that they should avoid tackling issues of driving under the influence of drugs (DUID) and industrial hemp.  Despite being tasked with these issues, the Working Group decided discussing these would be a waste of valuable time and resources.  In fact, Brian Connors, co-chair of the Working Group and representative of the Public Defender’s Office, noted, revisiting the DUID issue would be not only time-intensive, but redundant. The legislature and the Colorado Commission on Criminal & Juvenile Justice have been researching the question for well over two years, and have developed far more familiarity with the topic. In fact, a marijuana related DUID bill was recently introduced in the state legislature that appears to strike a compromise between the various stakeholders.

Instead, the Criminal Law Working Group will focus on determining legal definitions and confronting law enforcement issues. For example, can evidence of marijuana alone be the basis for probable cause? In the event of a dismissal or ‘not guilty’ verdict, do law enforcement agencies have a duty to maintain seized marijuana plants? This Working Group has also veered off path to discuss completely unrelated issues such as requiring drug tests for all minors who apply for a driver’s license.

The Tax/Funding and Civil Law Working Group, among other things, addressed the issue of banking for state licensed marijuana businesses. Because marijuana is still illegal under federal law, most banks are fearful of handling funds related to marijuana. However, all parties involved, from marijuana business owners to representatives of the Colorado Bankers Association agreed that the fledgling marijuana industry could not depend entirely on cash transactions. Unfortunately, the Working Group was faced with a serious shortage of viable alternatives, and in the end, resolved only to write to the Federal Government, requesting further guidance.

The Regulatory Framework Working Group kicked off its first meeting by examining existing regulatory frameworks and deciding which framework to model recreational marijuana on – specifically, whether to base it on our medical marijuana code or our alcohol/liquor code. Amusingly, one of the first issues to come up was whether to require vertical integration, which the medical marijuana code mandates, or prohibit it, which is the case with liquor.

One suspect issue was also brought up by the Regulatory Framework Working Group: whether to recommend a residency requirement for those who are going to purchase marijuana from a licensed store.  This issue caught many people by surprise as Amendment 64’s personal protection clause makes clear that “possessing, using, displaying, purchasing, or transporting marijuana” is now legal under state law for persons over the age of 21. The plain language of Amendment 64 applies to all adults aged 21 or older.

In addition to the issues covered by the other Working Groups, the Local Authority and Control Working Group is working to resolve:  What can local jurisdictions regulate? What will be the local controls regarding advertising?  What/who is the local authority over fines and licensing?  Lastly, the Consumer Safety/Social Issues Working Group is working to resolve issues associated with: advertising and marketing to minors; product labeling and packaging; product testing; and consumer, public, and industry education.

Surprisingly, a significant number of vocal marijuana opponents managed to secure positions on the Governor’s Task Force and in the working groups; however, the Task Force is not supposed to debate the merits of Amendment 64 or impede its implementation. Additionally, not all issues discussed by the Task Force will or should become recommendations of the Task Force, let alone a bill or regulation. The Task Force should only make recommendations that are both legally sound and good public policy. For example, a residency requirement on marijuana purchases, although discussed by one of the working groups, would be bad public policy because it would only perpetuate another black market and derive the state of tax revenue – exactly what the voters of Colorado wanted to prohibit with Amendment 64. Additionally, such a significant statutory limitation on Amendment 64 may not withstand legal scrutiny.[2]

Considering the Task Force has a mandate from the 55% of our electorate that voted for Amendment 64 and that they have less than a month now to make their recommendations, we can only hope that the proponents and opponents of marijuana reform can work together, stay on track, and focus on implementing the will of the voters. Nonetheless, we will all have to wait and see on what the Task Force actually recommends.

 


[1] It is worth noting that the Task Force really doesn’t have to address any issues besides funding the Department of Revenue to make rules because Amendment 64 is self-executing.

[2] Generally in Colorado, self-executing initiatives cannot be narrowed, impaired, or limited by the legislature. Yenter v. Baker, 126 Colo. 232, 236-237 (Colo. 1952); See also Zaner v. City of Brighton, 917 P.2d 280, 283 (Colo. 1996).

Joshua Kappel, Esq. is the Associate Director of Sensible Colorado, the leading state-wide non-profit working to educate the public about sensible marijuana policy. Mr. Kappel is also the senior associate at Vicente Sederberg, the first nation-wide medical marijuana law firm.

Rachelle Yeung is currently in her third year at the University of Colorado School of Law and a law clerk at Vicente Sederberg LLC.

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.

Spark the Discussion: Amendment 64: The Ripples Here at Home

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.

By Joshua Kappel, Esq.

On Election Day, the voters of Colorado made history with the passage of Amendment 64—the Regulate Marijuana Like Alcohol Act of 2012.

Amendment 64, which received 55% of the vote, legalizes marijuana under Colorado law for adults over the age of 21. Specifically, it removes all civil and criminal penalties under Colorado law for the limited possession, use, and cultivation of marijuana by adults over the age of 21. This measure also requires the Colorado Department of Revenue to create a regulatory system for the production and distribution of marijuana in a manner similar to alcohol.

The passage of Amendment 64 made waves across the world and made headlines from England to India.  Just this week, a handful of Latin America leaders called for a review of international drug policy in light of these measurers passing.  Politically, the 10 point passage of Amendment 64 has prompted other states to consider similar measures, and has even spurred bi-partisan action by Colorado’s congressional delegation to exempt states’ marijuana laws from the federal Controlled Substance Act.

This historic victory also made waves here in Colorado.  Colorado Governor Hickenlooper’s responded with his now infamous comments, telling voters not to “break out the Cheetos” yet because marijuana remains illegal federally.  The Governor’s comments hinted at a lack of interest in fighting on behalf of Colorado voters and led many to wonder what, if any, effect Amendment 64 will have here at home.

The state vs. federal nature of this law change will continue to be of great interest to both legal scholars and voters.  A full analysis of this issue will be saved for another post, but to be clear, the federal government cannot force our state to criminalize anyone – including those who use or produce marijuana.

The removal of criminal penalties for adults using, possessing and cultivating marijuana goes into effect once the election is certified (probably sometime around January 6th), although retail stores won’t be able to open until late 2013 or early 2014.

We still have time before the measure goes into effect, but already, Amendment 64 is making ripples in our communities. This week both the Boulder District Attorney and the Denver District Attorney announced they will dismiss all marijuana charges related to actions that would have been protected by Amendment 64.  In the interest of justice, we hope more District Attorneys follow suit. According to long standing Colorado law, a change in a criminal law that reduces a sentence or eliminates the violation all together should apply retroactively in the interest of justice to all convictions not yet final. C.R.S. § 18-1-410(1)(f); Colo. Crim. P. Rule 35; People v. Thomas, 185 Colo. 395 (1974).  Even if a stubborn district attorney was lucky enough to convict an adult for possessing marijuana now, the case should be dismissed by the trial judge or on appeal once Amendment 64 goes into effect.

Although Amendment 64 is not yet in effect, for the adults currently caught in the system for marijuana offenses, the ripples of last Tuesday are already being felt.

Joshua Kappel, Esq. is the Associate Director of Sensible Colorado, the leading state-wide non-profit working to educate the public about sensible marijuana policy. Mr. Kappel is also the senior associate at Vicente Sederberg, the first nation-wide medical marijuana law firm.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.