Medical marijuana fees, bill prompt proposed class-action lawsuit
At this writing, the fate of HB 1358, a Representative Beth McCann-sponsored bill that would shift millions from the Colorado Department of Public Health and Environment's medical marijuana registry fund to the financially strapped Medical Marijuana Enforcement Division, is still unknown with just two days left in the current legislative session. But it's already prompted a notice of a class action lawsuit that attorney Rob Corry says will go forward whether the measure lives or dies.
As we've reported, the MMED staff has been reduced from 37 employees to twenty due to what Department of Revenue spokesman Mark Couch described to us last month as "a budget shortfall in the Medical Marijuana Enforcement Division. Basically, the division had been projecting that it would be collecting licensing fees at a faster pace than it has been."
McCann's bill would address this issue with help from a $10 million CDPHE registry surplus. According to our William Breathes, approximately $9.7 million of that total would be transferred, with $5.7 million earmarked for immediate MMED assistance, $2 million set aside as an emergency fund, and $2 million more for the CDPHE's Tony Grampsas Youth Services program to help with crime and violence prevention.
In addition, around $93,000 would fund police access to the medical-marijuana-patient database -- a prospect that alarms some MMJ advocates, who see it as a violation of patient privacy. They also fear that if a patient flag is triggered by each police contact, officers could use it as probable cause for a possible driving-under-the-influence-of-drugs bust.
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Corry is no fan of these notions. "I think the bill is a horrible idea, and I hope they reject it," he says.
But whether legislators give the Heisman to the bill or not, "there's still a lawsuit, because the CDPHE has over-collected $9 million -- and we know that because of HB 1358. The bill's existence tipped patients off that the CDPHE has been over-collecting, probably for the past eleven years or so. It's something we've always suspected, but we had no evidence of it until this bill was proposed."
Is Corry sympathetic to Medical Marijuana Enforcement Division's financial straits, which McCann's measure is intended to address? Not at all. "The MMED was sold to the community as a self-funding entity. It was going to fund itself by collecting these licensing fees, and it did. It collected $9 million-plus from our industry through fees that started at $7,500 for the basic center license and went up from there. Where did that money go? What was it used for? There are many questions, but that's a side debate -- because this is a violation of the promises made at the very beginning about MMED funding itself.
"My experience with MMED is that it's too hostile to the industry and has taken feathers out of its own nest by denying licenses left and right for arbitrary reasons -- and then the entities that should be paying licensing fees for the future cease to exist. So the MMED probably deserves to be in this situation."
The police database also worries Corry, "depending on how it's structured -- and the bill doesn't go into specifics about that. I think it's possible to construct one that's legal and complies with the constitution. If a patient presents a registry card, law enforcement has the power to confirm it with the CDPHE, and we don't have a problem with that. But if it's searchable by name, it could pop up in every traffic stop, just like a concealed-weapons permit. that's a violation of a patient's confidentiality. So the bill needs to be amended to make the database searchable only by unique registry number."
If, as Corry contends, the CDPHE collected more funds than necessary to pay for administration of the program, "patients need to be refunded," he says. Hence the class-action lawsuit, teased with a notice filed with Colorado Attorney General John Suthers's office yesterday and a separate letter to Colorado senators; they're both on view below.
"Whichever way the legislature acts, we're proceeding with this class action," he emphasizes. And if the bill passes and the $10 million surplus being held by the CDPHE is redistributed, "then the state will have to find it elsewhere when we prevail."
Here are the aforementioned letters.
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More from our Marijuana archive: "Marijuana: HB 1358 would fund police computer access to patient database."
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