Ask a Stoner

Ask a Stoner, 4/20 edition: Pot critic William Breathes answers your cannabis queries

Amendment 64 may have legalized recreational marijuana in Colorado, but it also raised many new questions. We created Ask a Stoner to try to provide some answers. Here's our special 4/20 edition.

Dear Stoner: Who is in charge here? What's going on? Why can't I buy joints at 7-Eleven yet? We need answers, man!

Voters approved Amendment 64 on November 6, 2012, and Governor John Hickenlooper signed it into law on December 10, making it legal for adults 21 and over to possess up to an ounce of marijuana and cultivate as many as three sprouts and three flowering plants at a time. It also became legal for adults to purchase marijuana at state-regulated stores. But in order for that to happen, the state has to create regulations to govern the recreational marijuana industry.

See also:
- How marijuana activist Mason Tvert stirs the pot
- Where to party in Denver on 4/20

Hickenlooper created a 24-member task force to look at the issue and come up with suggestions for the legislators who would draft the laws. After weeks of deliberation, at the end of February the task force released a sixteen-point plan covering everything from home cultivation to criminal law to taxation and — most important — the structure of the industry and regulatory model. That report was handed over to a special Joint Select Committee (no pun intended) of members of the Colorado House and Senate, who have to come up with proposals — and get them passed — before the 2013 legislative session ends May 8.

The committee wrapped up its work on April 8 and announced that it would be condensing the task force's recommendations into three bills: one comprising all of the unanimously agreed-upon rules, a second comprising all of the majority recommendations that may still need some ironing out in the legislature, and a third related to all of the tax-policy questions.

If things go as planned — and there are still three more weeks in this legislative session — the Department of Revenue should begin processing applications for retail operations by October 1, 2013, with a ninety-day time limit, so January 2014 is likely to be the earliest you'll see a marijuana store in Colorado. Local municipalities that haven't banned marijuana businesses will have until October 1 of this year to get their own licensing processes in place.

Dear Stoner: Who is going to play big brother in this whole legal-weed thing?

Amendment 64 calls for the Department of Revenue to handle regulating the new industry. The most likely scenario is that the Medical Marijuana Enforcement Division will add recreational marijuana to its purview. That's despite a recent state audit that documented the MMED's record of reckless spending and financial mismanagement: During nineteen straight months of losses, it spent $2.3 million on expensive SUVs, computers and office furniture — including $4,200 alone on four chairs.

Meanwhile, the DOR still has to handle about half of the 1,024 dispensary, edibles-kitchen and grow applications it's received since 2010, when the MMED officially began processing them per state law. It took an average of 23 months to license the 400 or so applications that have actually gone through the entire process. And the DOR has also dropped the ball on several regulatory fronts, including background-checking dispensary owners. Department of Revenue chief Barbara Brohl told the Joint Select Committee that the majority of the division's problems stem from underfunding, hence the need for a sales tax of up to 15 percent on recreational marijuana. According to Brohl, predictability in funding would help stabilize the department and get things up to speed.

Despite concerns raised by the audit, the committee still seems to prefer this model, which was suggested by the task force; the only suggested change is that the DOR be required to report annually to the House and Senate finance committees.

Dear Stoner: Where is all of the ganja in the shops going to come from? Would I be able to just be a commercial grower and sell to any dispensary I want?

In the legislative committee, another contentious debate involved whether each marijuana store had to grow its own supply. That is currently the case with the medical marijuana industry, where dispensaries have to grow at least 70 percent of the medicine they sell in a system known as vertical integration; the remaining 30 percent can be purchased from another center or grow operation. The legislature approved that model in 2010's House Bill 1284, which set up rules for the medical marijuana industry. But critics of vertical integration say that if Amendment 64 were truly designed to regulate marijuana like alcohol, the system should resemble the alcohol industry, which has manufacturers, distributors and retailers.

Business owners and lobbyists are split. Michael Elliot, who's with the Medical Marijuana Industry Group, which reportedly represents up to fifty medical marijuana businesses in the state, told Westword that vertical integration is a safety measure to make sure that marijuana isn't being diverted out the back door of grow operations that can't make ends meet selling through legal channels. Elliot also argues that systems like vertical integration have kept federal interference in the medical marijuana industry to a minimum.

But many small-business owners say that they would rather leave the growing to the experts and not have that overhead to manage. "We just don't need it — it's garbage; it's anti-free market," says Rico Colibri, founder of the Cannabis Alliance for Regulation and Education, a group that was against Amendment 64 but now lobbies for looser regulations than currently exist for medical marijuana. "The only thing that's going to keep the feds out is by making it so big and so valuable that it can't go. I think that vertical [integration] was just complete nonsense made up by some of these industry groups."

Many growers and business owners in the medical marijuana industry have been saying all along that they would rather focus on cultivation and wholesale and let someone else worry about the retail business. They, too, argue that vertical integration would only protect the interest of existing medical marijuana businesses looking to transition to the general retail market. "As more patients consolidated into fewer rural retail options in the face of federal letters and local bans, the remaining centers found that their sales often outpaced the harvest capacity of their existing [grow facilities]," says activist Jessica LeRoux, owner of Twirling Hippy Confections. "This meant that in order to remain compliant, they would need to expand their [grow], but there simply was no warehouse space to expand with. This forced smaller mom-and-pop-center owners under the not-so-green thumb of the big conglomerates who had leased huge warehouses in anticipation of the protectionist monopoly they would eventually enjoy under vertical integration."

Due to heavy lobbying efforts by Colibri and other small-business owners, the committee pulled a 180. Rather than recommend vertical integration, it voted in favor of a delineated system of growers, distributors and retailers. Retailers would be able to grow their own or could purchase everything they sell in bulk from independent growers. The system is not unlike how a brewpub can make its own beer and also purchase other alcohol in bulk to stock the rest of the bar.

Dear Stoner: Amendment 64 called for taxing it, right? How much coin is The Man making off my plant, and where is all that dough going to go?

Tax policies are still up in the air. The current proposal is for a 15 percent excise tax and a 15 percent sales tax on top of existing city and state taxes. Amendment 64 requires the excise tax, with the first $40 million collected annually going to schools. The sales tax would go to the Department of Revenue to fund enforcement, and additional revenue — if it exists — would be earmarked for public-education campaigns on the health issues of marijuana. If those levels are approved, the overall tax rate would approach the 40 percent mark in cities like Denver. So for a $200 ounce, you could be paying an additional $80 in taxes.

While marijuana activists are divided on many issues, the tax debate has brought them together. While most agree that taxes should pay for industry regulations, they're also concerned that if the tax rate is too high, people will go to black-market sales.

"While I do think there needs to be a tax — I think we need to be able to pay the cost of regulating the product — it shouldn't be at the cost of making our regulations fail," says Mason Tvert, co-author of Amendment 64. "They can say that a regular sales tax won't generate enough revenue. Okay, decent point. But it's like all of a sudden the only people who should worry about paying for controlling marijuana are the consumers and the businesses, when for years the state has paid to so-call 'control' marijuana and failed. They are willing to spend money to enforce prohibition. So if the state believes that we can better regulate it and sell it in stores, then it should be something the state should invest in as a means for controlling marijuana."

The catch is that voters would have to approve the taxes because of TABOR, since Amendment 64 wasn't written to create a tax.

Dear Stoner: I want in on this business at the ground level and want to move to Colorado to open my own marijuana store. Where do I sign up?

To own a business, someone has to have been a resident for at least two years, though a business employee only needs to be a resident at the time he or she submits an application for a clearance badge through the DOR. There is talk that out-of-state investments may be allowed, but that is not included in the current recommendations.

Unlike the medical marijuana industry, which bans people with prior drug felonies, the recreational industry would not completely shut them out. The proposal being sent to lawmakers would allow drug felons to be licensees as long as ten years have passed since their violation or five years since the legislation is signed, whichever is longer.

Dear Stoner: Enough of the business and politics. What does this mean for me, the consumer?

It is currently legal for anyone 21 or older in Colorado to possess up to an ounce of marijuana or marijuana products, as well as paraphernalia. And, yes, that includes tourists — though they might not be able to buy as much ganja as those with Colorado IDs.

The suggestion now is that out-of-state visitors would be prevented from purchasing more than a quarter-ounce of herb at a time, while residents would be able to buy up to an ounce. But that could change: Some lawmakers are concerned about the illegal resale of legal cannabis and people taking it across state lines to neighboring, less-than-friendly states.

And although carrying up to an ounce in your car would be legal, the committee has suggested that the legislature consider laws similar to open-container liquor laws that allow people to bring home a re-corked bottle of wine.

Dear Stoner: I'm sure the marijuana stores are going to be great for some people — but I would much rather grow my own. Can I just throw a few seeds in my back yard?

While the hot summer sun and cool nights make parts of Colorado perfect for knocking out a few quick-flowering outdoor cannabis plants, the laws probably won't allow for it — not the way you grow sunflowers and tomatoes, at least. Instead, any marijuana plants would have to be grown inside a locked, enclosed space covered on all sides, including the top. Locked greenhouses would be acceptable if your house is zoned for it. And indoor growing would also have to be kept locked and out of sight — though the locks on your front and back door would be enough to qualify. Unless there's someone under 21 living in your house: Then the grow room would have to be locked as well. And if you're renting, the landlord would have the final say on whether you can grow — or even use — marijuana on the property.

When it's time to harvest, you can keep all that you grow and give away up to an ounce at a time to a friend. Home hash-oil makers should take note: The state task force strongly recommended making home extractions using butane and other flammable gases illegal.

Dear Stoner: What is going on with pot-friendly bars? Why am I still getting kicked out of Baghdad Hookah Bar every time I drop a chunk of hash in the pipe?

Committee members voted unanimously to add marijuana to the list of substances banned along with tobacco smoke by the Colorado Clean Air Act. But marijuana smoke likely wouldn't be allowed at existing tobacco bars — including hookah lounges.

While Amendment 64 bans open and public use, the committee agrees that doesn't extend to smoking in open, private spaces like your back yard or a private patio. That position leaves open the possibility that private clubs could be created. But there doesn't seem to be much support for those, with dozens of cities and municipalities such as Parker, Lone Tree, Steamboat Springs, Vail, Broomfield, Greenwood Village, Windsor, Superior and Fort Collins already prohibiting such clubs.

That disappoints activists like Colibri, who believe the expected social component was a major part of why Amendment 64 passed. "Everyone who voted yes, voted yes for a marijuana bar," he says. "'Like alcohol' means like a bar, and they voted yes. We haven't secured that part of the victory yet, but I don't think it's out of reach. We might not get it this session, but we are definitely trying."

For Tvert, allowing places where people can openly consume is a matter of smart public policy. "If someone is from out of town and they are allowed to use marijuana...where do you want them to use it?" he asks. "If they have a hotel here, is the hotel going to allow it? If not, where do you want them to use it? That is the situation in the Netherlands: If you use it on the street, you're going to get in trouble. That is another part of why we should consider it. It's not just 'Let's give people a fun place to go.' It's a public-policy issue."

But don't expect those fun places in Denver, either. Mayor Michael Hancock recently urged Denver City Council to ban private pot clubs: "We will not support...the establishment of private clubs in Denver. Amendment 64 does not provide for this, and neither should we," he wrote. "We already know the toll substance abuse takes on so many of our residents. Sadly, many of them are parents. The cost of substance abuse on our health-care system, our jails and in our courts is substantial. I want more for all of our kids and for all Denverites."

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William Breathes
Contact: William Breathes