Marijuana laws elusive as smoke

By Ernest Luning
THE COLORADO STATESMAN

As next year’s legislative session approaches, state lawmakers and interest groups are lining up to tackle a problem that has been on the back burner for nearly a decade before finally catching fire this year: how to regulate growers and distributors of medical marijuana.

“We don’t want the wild, wild West,” said Sen. Chris Romer, D-Denver, who has taken the lead in drafting legislation to handle Colorado’s rapidly growing medical marijuana market. “We want it highly regulated and controlled.”

Romer isn’t the only one ready to offer solutions, however. A slew of medical marijuana advocacy groups are drafting proposals, and one even stands ready to bring a ballot measure before voters next fall if the legislative fix doesn’t pass muster.

Romer began floating proposals earlier this month and could introduce language for the bill — which he has titled the Regulating Medical Marijuana Act — as early as this week, he told The Colorado Statesman. His proposals include licensing large indoor growing operations separately from clinics, tightening requirements for some younger patients and establishing strict rules for businesses that distribute medical marijuana.

“I’m more interested in a clinical model than a convenience store model,” Romer said, pointing to a recent court decision that could require medical marijuana dispensaries to do more than simply sell the drug.

Romer’s goal is to rein in the free-for-all that has swept the state in recent months, without putting excessive restrictions on medical marijuana distributors — which “would, in essence, force it underground,” he said. He also wants to create a consistent system of regulation unlike the patchwork of state and local rules adopted throughout California.

“What we intend to do is hit a thoughtful middle ground,” Romer said. “It’s going to be legal. It’s going to be medical. It’s going to be highly regulated.”

Denver attorney Rob Corry — who regularly defends medical marijuana clients and heads a trade group of suppliers and distributors formed earlier this month — said he welcomes legislative efforts to construct a “reasonable tax and regulation scheme that’s designed to increase patient access to medicine and drive cost of medicine down.”

However, he cautions lawmakers not to go too far.

“If the Legislature gets it wrong, and the governor signs a bill that’s going to significantly harm patient access to medicine, we’ll run a constitutional amendment,” Corry told The Statesman, noting that his group has a “funding commitment” to run the campaign, if it comes to that.

“Frankly, I like our chances with voters better than with legislators,” Corry said. “Colorado voters are strong supporters of medical marijuana.”

State voters legalized medical marijuana in 2000 on a 54 percent to 46 percent vote with the approval of Amendment 20, making Colorado the only one of 14 states that allow patients to possess the drug to establish that right in the state Constitution.

At issue is what the ballot measure left out — an unambiguous legal method allowing patients to get the drug. Under federal law, marijuana is categorized as a Schedule 1 narcotic — the most restricted category of illegal drugs.

Until this year, when a series of federal moves, court decisions and regulatory changes encouraged an explosion of the medical marijuana market in Colorado, patients and caregivers operated mostly in a quiet, informal sort of gray market.

But once the incoming Obama administration signaled that it would reverse longstanding policies aimed at prosecuting medical marijuana providers — formalized last month with a Department of Justice policy statement — things started to move fast.

A Denver District Court decision overturned a limit of five patients per caregiver long imposed by state regulatory agencies. Then, in July, the Colorado Board of Health declined to re-establish a limit on a caregiver’s number of patients after a contentious, all-day hearing. At the same time, the board opened the floodgates further by ruling that, in order to qualify as legal suppliers, caregivers don’t have to provide their patients any services beyond supplying medical marijuana.

“The business was artificially handicapped by the state,” Corry said. “It’s hard to open a business with only five customers. After that decision, the forces of the free market and competition began to get involved.”

Did they ever.

Medical marijuana dispensaries — some modeled on doctor’s offices, some more akin to basement rec rooms — popped up all over the state and began advertising their services. The Denver alternative newsweekly Westword garnered national attention when it advertised for a critic to review dispensaries, and the number of patients seeking state certification soared.

Restaurant owner and political consultant Wanda James told The Statesman this week that on Aug. 18 she had turned in her application for a medical marijuana card, certifying that she belongs on the statewide patient registry.

“I literally got my card in the mail yesterday,” said James, who, with her husband, is opening a high-end medical marijuana dispensary in Denver’s LoDo this week.

She estimates that as many as 65,000 Colorado residents might be registered as medical marijuana patients, if Department of Health reports are correct, and 400 to 600 applications are being submitted every day. (The Department of Health counts 16,505 applications received through Aug. 31, but hasn’t updated totals since then.)

In addition to opening The Apothecary of Colorado on Dec. 1 — a block away from 8 Rivers, her popular Caribbean restaurant on Blake Street — James has been busy organizing Coloradans for Medical Marijuana Regulations, a group dedicated to “putting responsible legislation on the table.”

Working with other medical marijuana advocacy groups, later this week James’ coalition plans to unveil a campaign involving heavy-hitting political consultants and the lawyer who penned Amendment 20.

She says the group wants to promote “what makes sense from a fair business practice when we start to look at regulation.”

An October Court of Appeals decision stirred the pot further, throwing the “primary caregiver” definition back to the state regulatory board when it let stand the conviction of a Longmont woman who faced drug charges for possessing 44 marijuana plants cultivated for some patients she hadn’t met.

“[A] person must do more to manage the well-being of a patient who has a debilitating medical condition than merely supply marijuana,” Judge Robert Hawthorne wrote.

The Colorado Board of Health had been scheduled to take another look at its caregiver rules at a Dec. 16 meeting. However, earlier this week it was announced that a decision would be postponed indefinitely in the wake of another court decision challenging its rules in order to “explore its legal options before determining how to proceed.”

The board’s delay leaves questions unresolved, but that’s fine by one lawmaker who’s tackling the problem.

“Their attempt at repealing the rule was an effort to punt to the Legislature,” observes Sen. Pat Steadman, D-Denver. “That’s fine. It’s the role of the Legislature to step up and legislate in this arena. We’ll figure it out for them.”

Steadman said he’s confident the Legislature can work out solutions, but cautions against over-optimism.

“The more you look into this issue, the more it has tentacles with extensive reach,” he said, noting that he doesn’t know whether the Legislature will be able to resolve all the issues surrounding medical marijuana in the upcoming session.

He believes the Legislature will tackle the biggest questions about dispensaries, growers and caregivers, however.

“If Amendment 20 were on the ballot, it would pass again,” Steadman said, pointing to recent polling that, he said, shows Colorado voters favor medical marijuana access by a 2-to-1 ratio.

“People are as in favor of it as they were,” Steadman said. “People want to see dispensaries regulated, but are concerned with the alarming growth rate of the industry — it seems to be a little out of control.”

Steadman predicts that a majority in both houses of the Legislature will be able to agree on the need for a regulatory framework for businesses “to supply patients with the medical marijuana the Constitution says they have a right to use.”

Steadman has been working with Romer to craft potential legislation, meeting with everyone from dispensary operators to insurance industry representatives to map out the problem.

“Where there are gray areas or gaps, the Legislature is capable and prepared to fill in those gaps and shine light in those gray areas,” Steadman told The Statesman.

There’s no shortage of gray areas and, so far, no obvious consensus on all the questions surrounding medical marijuana, in part because divisions seldom fall along traditional partisan lines. Earlier this month, for instance, Sen. Al White, R-Hayden, floated a proposal — since withdrawn — that would “establish a state monopoly to grow and distribute marijuana, helping to keep black market marijuana out of the supply chain.”

Although Romer’s legislation would stop far short of White’s idea for a state monopoly, he said he’s considering allowing growers to lease state property to grow marijuana and could encourage the University of Colorado and Colorado State University to establish “research institutions” to study its cultivation.

Lawmakers on both sides of the aisle have been eyeing the burgeoning market as a source of scarce tax dollars in the wake of an opinion issued by Attorney General John Suthers that said state and local sales taxes could be collected on the drug.

Other ideas include setting an excise tax on marijuana, which Romer said he would consider “as long as they use it for medical purposes.”

Steadman, however, cautions against counting on medical marijuana to solve the state budget crisis because, under TABOR, any new tax would have to be approved by voters before it could be collected.

“There’s no balancing the budget on the backs of medical marijuana users,” he noted.

Whatever the Legislature does, both Steadman and Romer said it will probably happen early in the session, which begins in January.

“We should deal with this and get it out of the way,” Steadman said. “There are bigger fish to fry. We’ve got a budget to balance and an economy to turn around. So, to the extent we can take care of this distraction and stay focused on the job at hand, that would be great.”

Romer concurred, but didn’t minimize the challenge ahead.

“We let the proverbial horse out of the barn,” he said. “We’re trying to regulate after the horse is out of the barn.”