Last night, CBS4 ran a piece about staff cuts (from 37 to twenty) at the Medical Marijuana Enforcement Division. At the conclusion of the report, on view below, correspondent Rick Sallinger asked ominously if the reduced crew could possibly enforce the many regulations imposed on MMJ businesses. But he skipped one salient fact: The change may be reversed in less than three months.
"We expect we'll have funding available to bring staff back to its previous level at the beginning of the new fiscal year on July 1," says Mark Couch, spokesman for the Department of Revenue, who also spoke with Sallinger. Such employees will be given other tasks at the department until then, but they're likely to return to MMED. As Couch notes, "We're hoping this is a temporary reassignment."
No doubt, since July 1 is significant for the medical marijuana industry in another respect. As we've reported, 2011's House Bill 1043, known as a clean-up measure for MMJ regulations, extended a previous state moratorium on new dispensaries to that same date. After it, entrepreneurs left in limbo by the edict can submit medical marijuana business applications, thereby bringing in new revenue for the state.
The reason for the current reduction was "a budget shortfall in the Medical Marijuana Enforcement Division," Couch says. "Basically, the division had been projecting that it would be collecting licensing fees at a faster pace than it has been."
The application process can't be described as speedy. As CBS4 reported, MMED has received 817 applications to date but has processed just 81 of them. One reason, Couch suggests, is the rate at which communities are engaging with the system.
"I don't have all the information to know exactly why it's taken longer," he acknowledges, "but I assume there are a number of factors at the local level -- everything from land use to local communities not being exactly sure what part of their local government this should fall under to local bans."
The last issue is certainly timely. Yesterday, voters in Fruita and Crawford voted to prohibit medical marijuana retail stores; Lyons residents rejected a similar measure. And this past Valentine's Day, all dispensaries in Fort Collins shut down due to the approval of a ban the previous November.
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Other sources of revenue for MMED remain and should be en route to state coffers soon. "We notified all current applicants who have pending licenses that their license fee is due immediately," Couch says. "The model that the Medical Marijuana Enforcement Division was designed after is gaming regulations, and in that world, we collect application and license fees at the same time -- upfront for applicants. And the state's medical marijuana rules allow for that, too."
Couch adds, "It's not unprecedented to have budget shortfalls that cause temporary reassignments. After the 2008 turn in the economy, there was a downturn in the sales of cars, and we saw a significant decrease in the relicensing of sales people and dealerships -- and that caused a large decrease in revenues for the auto industry division, which is the part of the Department of Revenue that regulates car dealers and sales people. So we had to reassign people out of that staff for a few months at the end of the fiscal year to avoid going into the red in that budget."
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What about Sallinger's rhetorical query about MMED enforcing regs with just over half the number of people previously on board? "Obviously, a reduction in staff spreads the work among fewer people," Couch concedes. "It has to have an impact. But that said, we still have a job to do as regulators. The background investigations will go on, the onsite visits and things we're required to do will go on. It's just that it's going to be spread out a little bit during this time frame, where we're trying to get the budget corrected so we can get back to the proper staffing levels."
Which should be accomplished about three months from now. Here's the CBS4 report.
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