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Medical marijuana letter from U.S. Attorney worrisome to business, says Sen. Pat Steadman

Earlier today, we shared a letter from U.S. Attorney John Walsh attacking elements of HB 1043, a bill intended to clean up aspects of last year's medical marijuana legislation. Senator Pat Steadman, who's co-sponsoring the measure with Representative Tom Massey, confesses to being somewhat mystified by Walsh's take, which struck him as more confusing than clarifying. Still, he says, "If I were in the business, I would be worried."

He adds, "We seem to have a federal law enforcement agency with its policy adrift."

Although Colorado Attorney General's Office spokesman Mike Saccone says members of the Colorado General Assembly were sent a package of material that included Walsh's letter, Steadman says he got his copy from the Denver Post. He wasn't especially surprised by its contents, which included an introduction from AG John Suthers plus copies of missives from several U.S. Attorneys in addition to the one from Walsh.

"There seems to be a rash of these letters," Steadman says. "I received a copy of one from the U.S. Attorney in Washington state a week or so ago."

Also included: California-based U.S. Attorney Melinda Haag's letter to the Oakland City Council, which some advocates see as threatening federal crackdowns on medical marijuana facilities even in states where such businesses have been legalized -- one that contradicted a 2009 memo by Deputy Attorney General David Ogden directing U.S. Attorneys not to target MMJ facilities if they followed local law in states that passed them.

As for Walsh, he singled out two provisions of HB 1043 that he saw as problematic. The first concerned "a marijuana investment fund or funds under which both Colorado and out-of-state investors would invest in commercial marijuana operations." Even though this concept fell out of the legislation during its journey through the Colorado House process, Walsh wrote that "the Department would consider civil and criminal legal remedies regarding those who invest in the production of marijuana... even if the investment is made in a state-licensed fund of the kind proposed."

Walsh also criticized a provision for allowing infused-product facilities containing up to 500 plants, "with the possibility of licensing even larger facilities, with no stated number limit, with a state-granted waiver based upon broad factors such as 'business need.'" It's still part of the current legislation.

Steadman's take? "I was curious why he singled out the two provisions he did, one of which is not part of the bill. It was an amendment out there for a while, but I have no intention of pursuing this issue in the Senate, and as I understand it, everyone who had been pursuing it has dropped it. And the other one -- the 500 plant limit and the potential for a waiver if your business needs would require additional plant material -- well, I have no idea why they're comfortable with 500, but 501 is too many.

"That was something various interests who are working on this bill suggested -- some kind of limit for product-manufacturers grow operations," he continues. "But there's certainly nothing magical about the number 500 for the purposes of state law. And I can't imagine why that's their threshold."

Does the number strike him as arbitrary?

"That was one of my reactions," Steadman allows. "But maybe we should take some comfort from the fact that they've decided they're comfortable with 500. They are, after all, the federal government, and they could come bust down people's doors because they had 100 plants, or 75 plants, or 150 plants. So maybe we should look at that as the silver lining in this letter."

Nonetheless, Steadman feels "this latest attempt to clarify is not particularly helpful."

He's less critical of Suthers' warning in his own note about the possibility of Colorado employees being accused of federal wrongdoing even if they're following state law. "State agencies are the attorney general's clients, so I think he is rightfully looking out for the interests of his clients and trying to advise them about a federal agency that seems a little bit adrift in its policy directions -- and who knows where they might land?" he says.

At the same time, Steadman concedes that Suthers is an open critic of the medical marijuana legislation former Governor Bill Ritter signed into law last year -- "and to the extent that he's also muddying waters, I don't think that's something he's opposed to doing."

Whatever the case, Steadman doubts the Walsh letter will doom HB 1043 as a whole.

"I think there are still a lot of important clarifications and some loopholes and omissions being addressed by this bill," he maintains. "As we've said all along, this is a follow-along, clean-up bill to legislation passed last year. There are things to love in it and things to hate in it -- but by and large, I think it's legislative action that needs to be taken."

Here's the package of material assembled by the Colorado Attorney General's Office. The Walsh letter is the second item.

Colorado Attorney General's Office package for HB 1043

More from our Marijuana archive: "John Suthers, Colorado Attorney General, thinks medical marijuana dispensaries suck -- and here's why."