Lawmakers want potency levels for pot products

Republcian McNulty and Dem Singer to partner on legislation
The Colorado Statesman

Rep. Frank McNulty, R-Highlands Ranch, has scaled back an original proposal that would have banned cannabis-infused products and concentrates. Instead, his new proposal would set potency equivalency limits for edibles and concentrates.

McNulty has partnered with Rep. Jonathan Singer, D-Longmont, to push the potency equivalency proposal. The bills — which have delayed status and are expected to be introduced in the coming days — would seek to determine equivalent potencies between infused products, concentrates and the actual marijuana flower.

Sponsors point out that marijuana-infused products and concentrates often have potency levels that far exceed that of the ordinary marijuana flower. Concentrates are made through an extraction process that uses a solvent, like butane, to eliminate all plant matter, leaving users with a product that is extremely high in potency. Examples include oil and earwax.

McNulty’s legislation would develop a scientific method for determining a potency equivalency between infused products, concentrates and flower. So, if users can legally purchase an ounce of marijuana in Colorado, and it is determined that only 14 grams of concentrate equals an ounce of flower in potency, then consumers would only be allowed to purchase the 14 grams of concentrate. That, however, is just an example, and no scientific formula has yet been approved.

“It’s an issue that we clearly need to address and it’s one that I hope we address. I think public safety demands that we address what one ounce means, so hopefully we’ll be able to do it,” said McNulty.

He has been working on the bill with Smart Colorado, a group of concerned mothers that has opposed legalization in Colorado. Smart Colorado suffered several losses at the legislature last year when a comprehensive regulatory model was developed. The group hopes to score a couple of wins this year.

Lobbyists for the group declined to comment for this story, saying they are not able to speak about the bills yet.

McNulty does not believe it will be difficult to create a potency equivalency formula, pointing out that potency tests are already required.

“(The) Department of Revenue is going to have to test these things anyway, the technology is available to set forth a standard, and if we are able to set a standard it becomes less likely that users and children who mistakenly ingest the stuff will end up in the hospital,” said McNulty.

He acknowledged that he had to curb his expectations, pulling back on his original proposal first reported by The Colorado Statesman in January that would have banned edibles and limit concentrates.

“I would like to prohibit edibles, but I don’t think I’m going to get there,” said McNulty.

He would also like to raise the crime for producing infused products and concentrates without a license. But McNulty acknowledges he may not get everything he wants this year.

“I’m sure that we’re not going to have everybody on board, but there are those who have opted to throw public safety to the wind and really view this as the wild, wild West, and frankly, that’s not the scenario that is best for the industry itself or for public safety,” opined McNulty.

One way the former House speaker may be able to get buy-in from the industry is by working with Singer. Singer has been a friend to much of the industry, working with stakeholders closely on implementing a regulated marijuana marketplace.

Singer says he will not sponsor any legislation that includes raising crimes for producing cannabis products without a license. But he does support protecting residential neighborhoods from illegal producers.

“If you’re using flammable substances that shouldn’t be used in residential zones, I don’t care if you’re making marijuana or if you’re making something else, there are certain things that shouldn’t be allowed in residential areas because of threats to homes,” said Singer.

He also supports the equivalency proposal because he believes it would benefit the industry, consumers and the overall general public.

“People aren’t even getting the potency that they’re expecting right now, and so this is a sword that cuts both way, and so the more clear we can be about it on the front end before the market solidifies, the more stable it’s going to be for marijuana retailers, and the better it’s going to be for the public in general,” explained Singer.

Marijuana industry stakeholders have thus far been open to having a discussion about equivalencies. In a letter to the Department of Revenue — which oversees marijuana regulation — industry representatives said they would actually like to have clarity on the equivalency issue.

“Based upon the current language in the statute, the Marijuana Enforcement Division has the statutory authority to establish a specific quantity that constitutes an equivalent amount of Retail Marijuana Product. However, under the current rules, each Retail Marijuana Store must make its own determination. This has led to a lack of uniform standards being applied amongst the Retail Marijuana Stores,” read a letter dated Feb. 26 from industry stakeholders to Barbara Brohl, executive director of the Department of Revenue.

“In order to address this issue, we are requesting that the Marijuana Enforcement Division establish reasonable and clear industrywide standards for the equivalency of Retail Marijuana Products and Retail Marijuana Concentrates to Retail Marijuana,” the letter continued. “Although technically equivalencies could change from product to product and concentrate to concentrate, we believe that the most efficient means to ensure compliance amongst the industry is to develop a flat standard that all businesses can follow.”

Joe Hodas, spokesman for Denver-based Dixie Elixirs and Edibles, one of the state’s largest manufacturers of marijuana-infused drinks and edibles, said the industry is doing what it can to demonstrate responsibility. Hodas attended a news conference on Monday with Gov. John Hickenlooper in which the governor signed measures to increase safety around marijuana.

One measure will allow marijuana store owners to confiscate a fake ID and notify law enforcement when someone under 21 tries to purchase marijuana. It also increases the penalty for selling marijuana to a minor from a Class 2 misdemeanor to a Class 1 misdemeanor.

The other bill will give local governments access to background check data to prevent criminals and other bad actors from receiving a retail marijuana license.

“We’re going to back what the state government and what the will of the people is, no matter what the situation is…” said Hodas. “As safe as we can make this industry, the better.

“It’s a matter of being proactive…” he continued. “With this new personal freedom comes a level of responsibility.”

Hickenlooper, who opposed Amendment 64 and is not a fan of legalization, said he wasn’t rushing to encourage new regulations on the industry, though he believes stakeholders should act responsibly, for example, by not making products attractive to kids.

“This has never been done before. This is brand new territory and I think the industry needs to sit down with the legislators… to look at what are those issues,” said Hickenlooper. “If someone I knew was manufacturing edibles, I would certainly advise them not to put them in the form of gummy bears or things that are attractive to kids because at some point they’re going to have some terrible accident and they’re going to get sued. But that’s just common sense to me.

“Do we have to legislate against it?” Hickenlooper asked. “I don’t know. Let’s work through the discussions with everybody sitting down at the table and see where we get.”

Hickenlooper also suggested that the industry work with the state’s new director of marijuana coordination, Andrew Freedman. But many in the industry have expressed concerns that Freedman has no experience in marijuana coordination, having only been to his first dispensary recently. He most recently ran the failed Amendment 66 campaign that sought to increase taxes by nearly $1 billion to fund K-12 education.

“My understanding is that he hadn’t even been to a marijuana facility…” lamented Joe Megyesy, a lobbyist for the marijuana industry.

But Freedman believes he is perfect for the job since he comes on as an unbiased player.

“The reason that I’m a fit for this office is that I come in as a neutral arbitrator,” he said. “I was not involved as either a proponent or opponent of 64, but I have a proven record of dealing with complex social issues, such as early childhood, where there are strongly held beliefs of stakeholders and going ahead and managing a team through those difficulties. That’s why I’m here.”

Ongoing discussions

The industry itself has voluntarily been engaging in stakeholder meetings, such as those suggested by Hickenlooper and Freedman.

Rep. Dan Pabon, D-Denver, called a meeting of all stakeholders on Tuesday to discuss how implementation has been going. Pabon led many of the regulatory discussions last year.

The greatest concerns from the industry appear to be around supply and demand. One problem is that there are only three licensed laboratories in the state that are testing the quality of marijuana, as is required under rules established by the Department of Revenue. Producers say it can take two weeks to receive tests back, which is impacting how much supply is available to meet demand.

The other problem highlighted by the industry is that medical plants and recreational plants must remain separately catalogued, which impacts how much product is available to meet the demand in the recreational market.

Some of those concerns may be alleviated when so-called “vertical integration” ends on Sept. 30, allowing growers to operate separately of retail centers. But Dan Anglin, director of public and government relations for EdiPure, makers of infused products, said he simply can’t get his hands on enough product.

“We want more weed, that’s what we want…” Anglin said during the stakeholder meeting.

“I would love to be able to purchase, if there’s a medical only licensee out there that has an abundance, his or her medical to be able to use for my recreational infusion,” he added. “It’s all the same marijuana.”

Concerns were also raised about complying with the state’s so-called “seed-to-sale” system, in which marijuana is tracked literally from its seed to the sale of the product. Proprietors have said that the system requires duplicative entries, and fears around security within the system have also come up.

Pabon appeared concerned, saying, “The proprietary piece for each business is huge, that’s the whole ballgame.”

Marijuana stakeholders also called for the legislature to work on the cannabis-banking crisis. Banks are still fearful to do business with marijuana proprietors, despite guidance by the federal government. Local bankers say the guidance is not clear and they are more afraid than ever to bank marijuana business.

Momentum in Congress has also stalled, and it does not appear that any marijuana banking laws will come on the federal level.

Some in the industry have suggested that the state legislature provide grants to credit unions or banks to bank with marijuana customers. Stakeholders report proprietors driving unarmed with millions of dollars in cash to pay their taxes or transfer money because they can’t wire the money through banks.

“This is the issue that’s going to get someone killed in Colorado,” said Michael Elliott, executive director of the Marijuana Industry Group.

But Pabon did not signal an interest by the legislature to tackle the banking issue this year, leaving the situation murky, at best.

Other marijuana measures that are expected this year include a bill that would address drug endangered children. With marijuana being legal, issues around child welfare reporting have been complicated and lawmakers are examining how to clarify how marijuana plays into child welfare reporting laws.

Sens. Linda Newell, D-Littleton, and Andy Kerr, D-Lakewood, are working on language regarding the definition of a drug-endangered child in light of marijuana legalization.

“That’s to align the definition in the children’s code and in the criminal code,” explained Newell.

Pabon indicated that he might also attempt some cleanups to the marijuana regulatory laws passed last year, despite the industry expressing concerns about such a measure given that the marketplace only opened in January.

“Lots of people have asked me about a marijuana cleanup bill…” he said. “There are some positive and negatives to that. I don’t know that it needs to come forth this session. But it depends on how the rest of the session goes. I don’t have anything as far as what I’m thinking or where I’m going.”

Peter@coloradostatesman.com