Colorado Pot Industry Thinks It's Time for Looser Rules

It's been a bumpy road for Colorado marijuana businesses over the past couple of years as prices drop and competition increases, and owners think it's time to revisit a handful of significant rules.

"Colorado was the nation's first state to legalize both medical and adult use. The first-ever regulatory model got a lot of things right, but it needs some critical updates," says Truman Bradley, executive director of Marijuana Industry Group. "It's still important to prioritize public safety, but after a decade of legal sales, it's time to look at some agnostic laws and rules that just don't make sense."

One of Colorado's largest marijuana trade groups, MIG has convinced state senators Kevin Van Winkle and Julie Gonzales as well as Representative William Lindstedt to sponsor a bill that would "streamline" certain marijuana business regulations, according to Bradley, including recordkeeping, hiring practices and license renewal. However, it would also remove more recent rules implemented by the Colorado Marijuana Enforcement Division, such as aspergillus mold testing and an upcoming labeling requirement for THC products that are made with remediated marijuana.

Introduced on January 22, Senate Bill 24-076 isn't the longest marijuana bill lawmakers have ever seen, but it could be one of the more impactful. On top of new business regulations and looser testing rules, SB 076 would allow dispensaries to sell consumable items that are not infused with THC, CBD or other extracted cannabinoids, such as Gatorade, chips and frozen food (but not alcohol or tobacco). The measure would also extend marijuana licensure from one year to two while keeping the fees the same.

"The goal is not to loosen regulations" but to "not waste time with duplicative regulations that do little or nothing to actually protect public safety," Van Winkle says.

"While the lawmakers and regulators did an amazing job creating the first in the nation legislation and regulation to ensure public safety, after more than a decade of legal sales and roll-out of new regulations and legislation across the nation, there remain a number of archaic rules and laws," Van Winkle adds in an email to Westword.

Bradley says his group ran the proposed bill past notable stakeholders in the marijuana industry, including the MED, but he anticipates amendments and is open to changes. One Chance to Grow Up, a Colorado organization that advocates for tighter retail marijuana restrictions for youth protection, is still reviewing the proposal and hasn't yet taken a position, according to director Henny Lasley. Gonzales and Lindstedt did not respond to requests for comment.

"None of these ideas are sacred cows that we would want to jeopardize the bill," Bradley says, but he's adamant that legislative change must take place if the state's pot industry is to remain relevant on a national scale.

After increasing for seven straight years to a record $2.2 billion in 2021, annual marijuana sales have been falling in Colorado, hitting just over $1.5 billion for 2023. Record-low wholesale prices, a long list of business closures and a 30 percent decline in employment have also hit the pot industry during that span.

"Colorado is no longer a cannabis leader. Other states are already remodeling their cannabis regulation. This year alone, Nevada, California, Oregon and Maryland have already passed bills streamlining their regulations. This is a trend I expect to continue for the next five years," Bradley says. "The rulebook for Colorado cannabis is over 500 pages long. The alcohol rulebook is about 130 pages."

The MED recently came out in defense of its aspergillus testing protocols, which look for four specific strains of aspergillus, but Bradley and Van Winkle both say they find the rules hampering and unnecessary.

"All legal Colorado marijuana products face extensive testing for all kinds of potential contaminants, and that’s important to continue. Aspergillus is something that is around us everywhere (in the grocery store, in the home, etc.), and studies have shown it's a test that doesn't tie to public safety, which is why other states have recently stopped testing their cannabis products for aspergillus, and something worth looking into here in Colorado as well," Van Winkle says.

Oregon temporarily lifted aspergillus testing for marijuana growers last year after a legal challenge to the requirement.

A common mold found indoors, outdoors and in marijuana samples, aspergillus can be inhaled through smoke and, in rare cases, can lead to the lung infection aspergillosis. Since its addition to state-mandated contaminant testing, which looks for contaminants like pesticides, heavy metals and total mold and yeast content in marijuana, there has been a spike in commercial pot recalls, with aspergillus and improper testing samples the most common causes.

Over two dozen cases of aspergillosis associated with marijuana use have been reported across the country, two of which were fatal (neither death was in Colorado).

Other language in the bill would allow marijuana growers to sell seeds, clones and genetic material with less than 0.3 percent THC directly to consumers in and outside of Colorado. The practice was acknowledged as federally legal in a 2022 memo from the Drug Enforcement Administration, which considers immature cannabis plants as industrial hemp, but is still banned in Colorado.

"If the DEA isn't worried about it, then why is Colorado?" Bradley asks, adding that the "seeds and clones portion of the bill still needs more work."

Van Winkle says he's "committed" to continued conversation with the MED, as well as "public safety proponents, and the industry, as this bill moves through the process to ensure public safety is in no way impacted, but in fact enhanced."

The measure is currently slated for the Senate Finance Committee, but no hearing date has been set.