Medical marijuana: Boulder official says state can't defend moratorium

The Denver City Council amendment that essentially zoned Altitude Organic Medicine out of existence was fast-tracked due to what most observers interpret as a state moratorium on approving new medical marijuana businesses until July 2011.

But Boulder assistant city attorney Kathy Haddock believes the legal language allegedly establishing this moratorium is so muddy that her community won't enforce it.

For Haddock, the problems pertain to contradictions in HB 1284, a measure signed into law by Governor Bill Ritter that's intended to regulate Colorado's medical marijuana industry.

"In part 1a, it implies that after July 1, 2010, no licenses will be granted," she notes. Here's the pertinent section:

12-43.3-103. Applicability. (1) (a) ON JULY 1, 2010, A PERSON WHO IS OPERATING AN ESTABLISHED, LOCALLY APPROVED BUSINESS FOR THE PURPOSE OF CULTIVATION, MANUFACTURE, OR SALE OF MEDICAL MARIJUANA OR MEDICAL MARIJUANA-INFUSED PRODUCTS OR A PERSON WHO HAS APPLIED TO A LOCAL GOVERNMENT TO OPERATE A LOCALLY APPROVED BUSINESS FOR THE PURPOSE OF CULTIVATION, MANUFACTURE, OR SALE OF MEDICAL MARIJUANA OR MEDICAL MARIJUANA-INFUSED PRODUCTS WHICH IS SUBSEQUENTLY GRANTED MAY CONTINUE TO OPERATE THAT BUSINESS IN ACCORDANCE WITH ANY APPLICABLE STATE OR LOCAL LAWS. "ESTABLISHED", AS USED IN THIS PARAGRAPH (a), SHALL MEAN OWNING OR LEASING A SPACE WITH A STOREFRONT AND REMITTING SALES TAXES IN A TIMELY MANNER ON RETAIL SALES OF THE BUSINESS AS REQUIRED PURSUANT TO 39-26-105,C.R.S., AS WELL AS ANY APPLICABLE LOCAL SALES TAXES.

However, Haddock continues, "subsection b talks about cities issuing licenses after August 1, 2010." That paragraph reads:

(b) TO CONTINUE OPERATING A BUSINESS OR OPERATION AS DESCRIBED IN PARAGRAPH (a) OF THIS SUBSECTION (1), THE OWNER SHALL, ON OR BEFORE AUGUST 1, 2010, COMPLETE FORMS AS PROVIDED BY THE DEPARTMENT OF REVENUE AND SHALL PAY A FEE, WHICH SHALL BE CREDITED TO THE MEDICAL MARIJUANA LICENSE CASH FUND ESTABLISHED PURSUANT TO SECTION 12-43.3-501. THE PURPOSE OF THE FEE SHALL BE TO PAY FOR THE DIRECT AND INDIRECT COSTS OF THE STATE LICENSING AUTHORITY AND THE DEVELOPMENT OF APPLICATION PROCEDURES AND RULES NECESSARY TO IMPLEMENT THIS ARTICLE. PAYMENT OF THE FEE AND COMPLETION OF THE FORM SHALL NOT CREATE A LOCAL OR STATE LICENSE OR A PRESENT OR FUTURE ENTITLEMENT TO RECEIVE A LICENSE. AN OWNER ISSUED A LOCAL LICENSE AFTER AUGUST 1, 2010, SHALL COMPLETE THE FORMS AND PAY THE FEE PURSUANT TO THIS PARAGRAPH (b) WITHIN THIRTY DAYS OF ISSUANCE OF THE LOCAL LICENSE. IN ADDITION TO ANY CRIMINAL PENALTIES FOR SELLING WITHOUT A LICENSE, IT SHALL BE UNLAWFUL TO CONTINUE OPERATING A BUSINESS OR OPERATION WITHOUT FILING THE FORMS AND PAYING THE FEE AS DESCRIBED IN THIS SUBSECTION (b), AND ANY VIOLATION OF THIS SECTION SHALL BE PRIMA-FACIE EVIDENCE OF UNSATISFACTORY CHARACTER, RECORD, AND REPUTATION FOR ANY FUTURE APPLICATION FOR LICENSE UNDER THIS ARTICLE.

"And then," Haddock goes on, "section 103, part two, says local governments can regulate the licensing and sale of medical marijuana prior to July 1, 2011." Here's that passage:

(2) (a) PRIOR TO JULY 1, 2011, A COUNTY, CITY AND COUNTY, OR MUNICIPALITY MAY ADOPT AND ENFORCE A RESOLUTION OR ORDINANCE LICENSING, REGULATING, OR PROHIBITING THE CULTIVATION OR SALE OF MEDICAL MARIJUANA. IN A COUNTY, CITY AND COUNTY, OR MUNICIPALITY WHERE SUCH AN ORDINANCE OR RESOLUTION HAS BEEN ADOPTED, A PERSON WHO IS NOT REGISTERED AS A PATIENT OR PRIMARY CAREGIVER PURSUANT TO SECTION 25-1.5-106, C.R.S., AND WHO IS CULTIVATING OR SELLING MEDICAL MARIJUANA SHALL NOT BE ENTITLED TO AN AFFIRMATIVE DEFENSE TO A CRIMINAL PROSECUTION AS PROVIDED FOR IN SECTION 14 OF ARTICLE XVIII OF THE STATE CONSTITUTION UNLESS THE PERSON IS IN COMPLIANCE WITH THE APPLICABLE COUNTY OR MUNICIPAL LAW.

On top of that, Haddock counts "nineteen specific references in the statute" to local governments being able to enact their own rules when it comes to medical marijuana businesses.

"Putting all these things together, I don't know how the state can say local governments have to stop issuing licenses. Plus, for a moratorium, there usually has to be some kind of emergency. At least there does for local governments. And I don't recall anything in the discussion about why there needs to be a moratorium, and there's no explanation of why one is needed in the statute. If they explained a reason for the moratorium, it would at least be a declaration of why it was necessary. But the specific language in the statute still says local governments can issue licenses."

Just as problematic from her perspective, "we've had no guidance about what the state's going to do when cities exercise local control."

Presumably, many of these issues are being addressed by folks at the Department of Revenue, who are currently trying to put rule-making meat on HB 1284's bones. In the meantime, though, what are would-be entrepreneurs to do?

Medical marijuana attorney Danyel Joffe is advising her clients to treat the moratorium as genuine even if there are questions about it, since it may take legal action to clear up the confusion. That makes sense to Haddock.

"The state can kind of do what it wants," she says. "So I don't know what I would do if I was in business. They're in a very difficult position."

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Nonetheless, Boulder's official view is that it can continue issuing licenses, moratorium or no. If the result is a lawsuit from an entrepreneur approved by Boulder but spurned by the state, "city council would have to decide what to do," Haddock allows. "If the city was named, we'd defend it, but if it was just between the dispensary and the state, it would be up to the council."

Haddock laments that the final piece of legislation was so unclear in so many ways. "This bill kept being rewritten substantially until very late in the process," she points out, adding, "I would love to have some answers to these things."

And in less than a year.


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