Understanding Colorado’s New Medical Marijuana Laws

this excellent article is reprinted from a website

Part I Medical MJ
  1. Police power enacted for the health, peace and MORALS of the people.
  2. It is against the law to cultivate, manufacture, distribute or sell MEDICAL marijuana unless you are:
    1. a patient, growing six plants as per ARTICLE XVIII;
    2. a caregiver, limited by this law’s new, statutory definition, to 5 patients, or 3) a “locally approved” business (a “person” with a local sales tax license) with a state license to cultivate, and sell medical marijuana or edibles.
  3. Established (MJ) businesses (already locally-approved with local sales tax license) must complete application and pay fee by August 1. Newly-approved locally MJ business have 30 days to pay up and apply even though the app may be denied. If you don’t apply it is deemed evidence of “unsatisfactory character, record and reputation” for future application for the state license.
  4. Local governments must, if asked, provide a list of all local “centers” or operations they granted a sales tax license so they can be identified by the state (for enforcement).
  5. Only a patient or a caregiver is entitled to the “affirmative defense.”
  6. .Before September 1, 2010 a tax-paying business or an “operation” must certify they grow 70% of medical MJ or edibles.
  • “Good Cause” (to be denied a state license) is to cultivate, manufacture, or sell or have an operation that adversely affects 1the public health or welfare of a neighborhood.
  • “Licensed Premises” means where med mj is cultivated, manufactured, distributed or sold by a licensee.
  • “Licensee” a person (not place)
  • “local licensing authority” is designated by local government probably a regular or special sales tax license, m.l.).
  • “Medical MJ” is grown and sold as per this law and article xviii.
  • “Medical MJ Center” is a person with a license but not a “primary caregiver” as defined in part 10
  • “Med MJ-Infused” is edibles, ointments and tinctures sold or manufactured by a “center.”
  • “Medical MJ-Infused Products Manufacturer” means a person licensed by this law.
  • “Optional Premises” allowed
  • “Optional Premises Cultivation Operation” is a person licensed by this law.
  • “Person” is person, partnership, association, company, corp, llc, organization, manager, agent, owner, director, servant, officer, or employee.
  • “Premises” is a distinct contiguous area.
  • “School” is public or private schools with children.
  • “State Licensing Authority” new in this state.
  • "Limited Access Areas" the building or room where med mj is cultivated, stored, weighed, displayed, packaged, sold or possessed for sale and where only the licensee is allowed wearing a state-issued badge. the entry and exit must be posted with signage from the state authority.
  • "Local Option" the law goes into effect statewide unless a municipality, county, city or city/county vote by a majority to prohibit a medical mj center, an optional premises cultivation operation and/or a medical mj-infused products manufacturer.
Part 2 State Licensing Authority

Established in the Department of Revenue with its executive director as the head. One employee can be hired per ten centers applying. They get 500k for back ground checks. Funded by a $1 million dollar loan from the Medical MJ Registry, and no money can come from the general fund and this part will be repealed 4/1/2011.

The State Authority grants, refuses and promulgates the rules as well allows moratoriums until the State Authority adopts rules (by Aug 1 deadline for applications & fees, M.L.). By September 1, the State Authority and the Department of Health and Environment must hold a public hearing with all the stakeholders to review all their new rules. (Here is a chance for the public to be heard, M.L.)

The State authority is granted the authority to hold hearings and subpoena records but must maintain the confidentiality of licensee records and books; they must develop the forms etc; they must transmit a report every year to the executive branch; they must request MJ be removed from the Schedule I to the Schedule !! List of dangerous drugs.

The State Authority must make rules applying; to complying, enforcing, or violation; for officers & employees; instructions to local authority, law enforcement; requirements for inspections, investigations and seizures; create a range of penalties for their use; prohibit unfair practices and misrepresentations; control information and product displays: issue I.D.s to “persons” and take their fingerprints; and identify state licensees, their owners, officers, mangers and employees.

The State Authority must make rules applying; to minimum security including lighting, physical security, video and alma requirements; the regulation of storage, warehouses and transportation of medical MJ; sanitary requirements for “Centers” and edible manufacturers; to the specific I.D. From patients using a “Center;” to labels; to records and their availability; to procedures for renewals, reinstatements, licensing, and paying fees; access for the Department of Revenue to their records; rules to authorize the Department of Revenue to issue citations for (to be written, M.L.) violations and penalties; AND NOTHING KEEPS THEM FROM MAKING ANY RULES THEY WANT OR FIXING THE PRICES (Part 2(XX)(B).

Part 3 State &Amp; Local Licensing

The local authority may issue a license for a Medical MJ Center, an Optional Premises Cultivation Operation or a Medical MJ-Infused Products Manufacturer.

If they don’t set up an authority the municipality, city and county, unincorporated area can adopt the minimum requirements in HB 1284:

  1. Restrict the distance between licensees,
  2. Restrict the size of premises.

The State requires locals to use their forms and they must contain plans, specs and a public hearing posted in the newspaper and on the premises containing the names of the applicants. The State may co-review an application while the locals are also investigating if all the nonrefundable fees are paid.

The Locals have 30 days to refuse or grant the local license upon inspection of the building. The State must be notified if the locals deny app.

State Licensing Fee: $5000.00. Apps on state forms once locals issue license. If denied, Licensee can ask for a hearing, and the reason for denial does not have to be disclosed to applicant or locals until 15 days before the hearing.

Persons who can not get a license:

  1. Those who have not paid annual fee.
  2. Those whose criminal history reveals they are not of good moral character.
  3. A Corp, if officers, directors or stockholders are not of good moral character.
  4. A physician who makes recommendations for patients.
  5. A person who is funded by one not of good moral character.
  6. A person under 21.
  7. A person in default on any taxes, judgements, child support, the fees, or a student loan.
  8. A person who has a discharged felony more than five years from date of application or any felon ever convicted of possession, distribution or use of a controlled substance.
  9. A person who employs another without a criminal background check.
  10. No cops or DAs.
  11. A person whose primary caregiver status has been revoked by the Dept of Health.
  12. A person for a location that is retail food establishment or wholesale food registrant.
  13. A person who has not been in COLO TWO YEARS, but for those who apply before 12/15/2010 and were here 12/15/09.

When a person’s criminal history is investigated and/or mandatory finger prints found lacking, the state may consider evidence of rehabilitation, education and character since the last conviction of a felony in issuing a license.

Restrictions on Apps for New License
  1. A location that is within 1000 ft of one already denied in the past two years.
  2. Deed or lease is required before license issued.
  3. Local zoning bans on a center, grow or manufacturer at location applied for.
  4. Location is within 1000 ft of a school, alcohol treatment facility, college, university, or seminary, or a residential childcare facility, subject to local zoning, to be measured from the nearest property line to the nearest portion of the building using a direct pedestrian route.
Transfer of Ownership
  • Is allowed after locals post ten day notice and have a hearing.
  • Authorizes a locality to prohibit a center, optional premise or a manufacturer if the local zoning, health, safety or public welfare law is more restrictive than HB1284.*
  • All licensees must send notice of change in officers, mangers, etc within 10 days of change
  • All new people must pass back ground check and submit fingerprints.
  • All “operations” must be for patients only.
  • Everyone listed on app must be a CO resident for two years.
  • License good for two years.
  • The licensing authorities must consider the effect the granting or denial of a second or third license to the same person would have on restraining competition.
  • A separate license is required for each specific business, entity or geographical location.
  • All licenses must be displayed with names and dates.
  • Locals can’t transfer or renew without applicant having a state license first for the entire time needed for the locals license.
  • All changes in financial interests must be reported in 30 days.
  • Each licensee must manage premises their selves or hire a manager (back ground check & fingerprints required).
  • A licensee can move within the locality with permission from local and state authority.

*An optional premises cultivation operation location is confidential* except to Share W Law Enforcement!

License Renewal

90 days before expiration, the state will notify and licensee has to apply 45 days before expires to locals and 30 days before expires to State. All may be waived, no hearing required unless there were complaints, late filers less than 90 days can pay a $500.00 late fee.

The State Authority may reduce or increase fees.

Inactive Licenses

Revocation after inactivity for one year.

Unlawful Financial Assistance

Complete disclosure required of all investors and fingerprints with the exception of commercial banks. Intended to block control of a MJ business financed by any other party but the licensee.

Part 4 License Types
  1. Medical MJ Center>
  2. Optional Premises Cultivation Operation
  3. Medical MJ-Infused Products Manufacturer
  4. Occupational licenses and registrations issued by State Authority.

All licensees must collect sales tax on all sales.

All state chartered financial institutions are allowed to lend money to licensees.

Medical MJ Center:

  1. When selling (must be) pre-packaged edibles, the label must say that it contains medical MJ; that it is manufactured without any regulatory oversight; and that there may be a health risk.
  2. An edible manufacturer may operate on a center’s premises.
  3. A center licensee can only sell MJ grown from their Optional Premises (Does not apply to edible manufacturer).
  4. A licensee can only buy 30% of hands-on inventory from another center, nor can a center sell more than 30% of their total inventory Purchasers must show valid registration card and photo I.D.
  5. A center may provide a small amount of MJ to a licensed lab (occupational: 12-43.3-202(2)(a)(IV).
  6. All medical MJ must be labeled with a list of chemical additives: nonorganic pesticides, herbicides and fertilizers.
  7. All centers must be handicapped accessible!

Optional Premises Cultivation Operation: Only a center licensee or edible manufacturer can apply for this license.

Medical MJ-Infused Products Manufacturer
  1. Edibles must be prepared using equipment only for that.
    1. An edible manufacturer is allowed to contract with up to five centers in writing, to produce edibles with the centers’ MJ and the contract must state the amount of MJ used and amount of products produced from the centers’ MJ.
    2. Licensed manufacturers can sell to any licensed center.
    3. Sanitary standards in 12-43.3-202(2)(a)(XII).
    4. All edibles must be sealed and labeled.
    5. No edibles consumed on a licensed premise.
    6. Manufacturer must pay all state and local taxes.
    7. A manufacturer who has an optional premises license can not sell that MJ.
Part 5 Fees

Cash “Fund” can’t be transferred to the general fund.

Applications for:

  • Licensees, change location, transfer ownership, renewal and expired license renewal.
  • Fees can not exceed costs and must be reviewed.
  • Applicants pay for fingerprints and back ground checks
  • If the state authority is subpoenaed (doesn’t. apply to another gov’t agency), state officers or employees paid fee, meals and milage and a per diem collected in advance of an appearance in court.

Locals set own, nonrefundable licensing fees collected in advance.

Part 6 Disciplinary Actions
  • State authority can, after a hearing, suspend or revoke a license, levy a fine or “other sanction,” by mail unless a crime involved then licensed can be pulled without notice or hearing.
  • Suspension for no longer than 6 months.
  • Suspended centers’ patients allowed to transfer their “Primary” center to another. (NOTE: FIRST AND LAST REFERENCE TO “PRIMARY” CENTER.)
  • A fine is available allowing operation during suspension to be considered by judicial review and permanently stayed if: 1) the fine achieves the disciplinary purpose, 2) the books and records show loss suffered during suspension, and 3) there were no other problems during the previous two years.
  • FINE: $500.00 to $100,000.00.
  • The State and Local authorities must report to the legislature fines, suspensions and revocations yearly.
Part 7 Inspection Of Books And Records
  • Licensee must open books (current year and past three) during business hours to the State authority.
  • Licensed premises: place of storage, growing, cultivating, sold, or dispensed subject to inspection or investigation anytime including locked areas.
Part 8 Judicial Review

Decisions by the State authority are subject to judicial review. “Net” revenue is subject to sales tax.

Part 9 Unlawful Acts Enforcement

It is against the law to:

  1. Consume medical MJ on the premises.
  2. Let another use your patient registration card.
  3. To continue to operate a MJ business without a license.
  4. To buy, sell, transfer, give away or acquire medical MJ except as allowed in this law.
  5. To be in a “limited access area” without a “badge.”
  6. To not post entry & exit signs in a “limited access area.”
  7. To fail to report illegal transfers of licenses or name changes.
  8. To display illegal signage or advertise deceptively, or falsely or to mislead.
  9. To provide a public place for consumption of medical MJ in any form.
  10. To sell to someone without a license or a person without a registry card.
  11. To be under 21 and employed by any licensees.
  • An employee can confiscate a patient’s card if there reasonable cause to suspect fraud. Failure to turn over card to authority within 72 hours not a crime.
  • For a center o possess more than 6 plants and 2 ounces per patient unless patient has a recommendation for more.
  • To sell anywhere else but at center (no delivery).
  • To have illegal MJ on premises.
  • To buy from someone not licensed.
  • To sell anywhere else but from a permanent location.
  • To possess used paraphernalia on a premise.
  • To deliver any place else but from an optional premises to a center.
  • To sell, serve, or distribute MJ any other time but between the hours of 8AM and 7PM, 7 days a week.
  • To sell, deliver or distribute MJ not grown at a center’s, a manufacturer’s or an optional premises’ own location.
  • For a physician to receive any money or anything of value for patient referrals.
Part 10 Legislative Declaration Protecting Patients
  • Protects legal patients from criminal prosecution for possession of less than 6 plants or 2 oz.
  • Protects non-card holding patients with an affirmative defense.
  • Defines Primary Caregiver as a “person other than the patient or the patient’s physician who is 18 and has significant responsibility for managing the well being of patient who has a debilitating medical condition.”

Dept of Regulatory Agencies (DORA) must:

  1. Establish a confidential registry of patient.
  2. Develop an application for patients
  3. Verify medical information.
  4. Issue the registry cards
  5. Tell law enforcement about suspended cards.
  6. Determine the manner in which other debilitating conditions can be added to the list in the constitution.
  7. Allow a waiver for homebound patients to have primary caregiver deliver from center to patient.

The State Health Agency may:

  1. Rule what is “significant responsibility for managing the well being of patient who has a debilitating medical condition.” EXCEPT MJ or MJ paraphernalia by itself is insufficient.
  2. Create a form for “Caregiver’s” with testimony they provide “significant responsibility for managing the well being of patient who has a debilitating medical condition.”
  3. Create a form for the inclusion of “written documentation” of a debilitating condition.
  4. Establish grounds for changing a caregiver!!
  5. Conduct a public hearing with the dept of revenue about the new rules by sept i , 2010.

Primary caregiver:

  1. May not delegate authority or assist others in providing medical MJ to a patient.
  2. Two or more caregiver can not join together to cultivate medical MJ.
  3. Only a center or one with a optional premise, or a manufacturer or a primary caregiver for a patient or themselves can grow medical MJ.
  4. A primary caregiver must provide to law enforcement their patients registry I.D. NUMBER ONLY.
  5. A primary caregiver is limited to five patients unless there is no other access.
  6. A patient can only have one primary caregiver.
  7. A patient who has designated themselves as their own caregiver, may not have another primary caregiver.
  8. A primary caregiver can not charge more than the costs of cultivation or purchasing medical MJ, but may charge for caretaker services.
  9. THE dept of health must start a confidential registry of available primary caregiver for patients who do not have one.
  10. A registered primary caregiver or an individual can choose to be put on this registry and with their contact information.
  11. The Health Agency can not vouch for the primary caregiver.
  12. The Dept of Health can grant a patient more caregiver and note in registry.
  13. A patient must declare to the registry where they intend to get their medical MJ: a primary caregiver, a center, or cultivate themselves.
Registry Card
  1. A patient must have card or photocopy of app and proof of submission when in possession.
  2. If a physician has a violation related to the issuance of medical MJ recommendations ONLY, a patient’s card may be denied or revoked.
  3. A patient OR primary caregiver will have a form to use for renewal every year before its expiration.
  4. The waiver for a homebound patient to have their medical MJ delivered will be on the card and a photocopy must be carried by the primary caregiver. A primary caregiver is also allowed to buy for the homebound patient at a center with the homebound patient’s card.
Use of Marijuana

A patient or primary caregiver can not use medical MJ (these rules do not apply to a center or a manufacturer):

  1. In a way that endangers the health and welfare of a person (read: children under 18, M.L.)
  2. In plain view or in a public place.
  3. Doing a task vulnerable to negligence or malpractice law suites.
  4. Use on a school grounds or bus.
  5. Use in a correctional facility
  6. Use in a vehicle, aircraft or boat.
  7. Operate, navigate or be in control of any vehicle, aircraft or boat under the influence of medical MJ.
  8. If there is no debilitating condition.
  9. Nor can any person establish a business to permit patients to congregate and smoke (burning a cigarette, cigar, pipe, or any other matter or substance that contains tobacco or medical MJ) or otherwise consume medical MJ.
Limit on Cultivation

Only registered patients, licensed primary caregiver, Manufacturers and Centers may cultivate medical MJ.

If the affirmative defense is raised (you need more MJ THAN 6 PLANTS OR 2 OZ.) the burden of proof and costs are on the patient.

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