While 13 states and the District of Columbia have voted in medical marijuana as an accepted medical treatment, deciding regulatory parameters continues to be a vexing issue in some jurisdictions.
Compounding the confusion is federal law denying validity of marijuana for medical use, the Justice Department’s year-old order not to prosecute those complying with applicable state (and District of Columbia) laws, and local government discretion to implement additional rules and licensing requirements.
Colorado further defined and formalized how marijuana could be grown, packaged and dispensed via the Colorado Medical Marijuana Code, a law signed by Colorado Gov. Bill Ritter on June 17, 2010.
The new law created a very short window of opportunity for marijuana facilities to qualify for treatment as existing businesses—mandating application for local approval by July 1, and submission of an application to the state by August 1. Such facilities had to certify to the state by September 1 that they grow at least 70% of the product needed for their operations.
Those wanting to open a medical marijuana business after July 1 must first submit an application to the local government, then apply to the state. To grant licenses, the local government must adhere to specific standards established by ordinance or resolution.
As most local governments have yet to take up this measure, few new facilities are likely to start up before July 2011. Following are other key provisions of the law:
- Recognizes the caregiver model, which allows sale of medical marijuana to patients or their primary caregivers, but prohibits the caregivers from charging more than their cost of acquisition/ production. Such caregivers can charge for ancillary services;
- Establishes a statutory protocol for existing and new dispensaries and grow operations, with licensing required for Medical Marijuana Centers (MMC’s), Marijuana Infused Products manufacturers (MIP’s), and Optional Premises Cultivation facilities (OPC’s);
- Mandates that patients get a doctor letter to acquire a state-issued patient card. The card allows the designated MMC, also known as a dispensary, to stock up to six plants and two ounces of marijuana per patient registering that dispensary as his/her primary center, and also allows the patient to buy marijuana from any MMC;
- Prohibits MIP’s, also known as edibles manufacturers (because most of the infused products offered are baked goods containing marijuana), from selling directly to patients. Rather, they sell to dispensaries, which in turn sell products to patients with a valid registration card. Edibles manufacturers may either grow their own marijuana or purchase it from dispensaries. All infused products must be clearly labeled, and produced only in facilities used exclusively for edibles production;
- Limits OPC’s, also known as grow operations, to exist only in tandem with dispensaries or edibles manufacturers. Dispensaries and edibles manufacturers may have more than one grow operation; however, a grow operation cannot be shared by more than one dispensary or edibles manufacturer;
- Requires that every dispensary, edibles manufacturer and grow operation be both approved by the local government (whether municipality or county) and licensed by the state. It further requires that owners and employees obtain an identification card, to be issued after the state conducts a thorough, fingerprint-based criminal background check and has confirmed two-year Colorado residency. Denials are issued based on tax, student loan or child support delinquency; felony conviction within the previous five years (or ever for a controlled substances related felony); or other lack of “good moral character;
- Restricts locations of licensed facilities to compliance with local zoning laws. They may not be located within 1,000 feet of a school, residential child care facility or drug/alcohol treatment facility. Local governments can modify these restrictions as they see fit.
Given twists and turns in the road presented by evolving state and local government standards, coupled with ongoing gray area in federal enforcement, medical marijuana regulation is likely to remain a hot topic of discussion for years to come.
Joel Russman is a Denver-based attorney specializing in business law for small companies. Decades of small business-oriented experience helps him advise medical marijuana growers, dispensaries and edibles manufacturers about the new regulated environment. A month after a new law took effect, Russman co-presented Colorado’s first continuing legal education seminar about medical marijuana regulation and business issues. Reach him at russman@joelrussman.com; 303-894-0242.
