2016 Legislative Session: 18 Marijuana Related Bills Introduced 12 Bills Passed 6 Bills Died

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2 LEGISLATIVE UPDATE 2016 Legislative Session: 18 Marijuana Related Bills Introduced 12 Bills Passed 6 Bills Died

3 LEGISLATIVE UPDATE Summary of 2016 Session: HB MJ Bonding Requirements HB Local Medical MJ Testing Facility Licensing HB MJ Transporter License HB Retail MJ Sunset HB Medical MJ Advertising HB Medical MJ Student Use

4 LEGISLATIVE UPDATE Summary of 2016 Session: HB Multi-Serving Liquid Retail Edibles HB Enticing-Shaped Edibles SB MJ Pesticides Rules SB MJ Ownership SB MJ Cultivation Requirements SB MJ Research Funded by MJ Taxes

5 MED RULEMAKING 2016 Rulemaking Agenda 2016: Implementation of 2016 Legislation - Mandates Housekeeping Rule Changes Corrections Consideration of Suggested Rule Changes from Stakeholders & Staff

6 MED RULEMAKING Rulemaking Timeline: July - Numerous Working Group Meetings July 15 Permanent Rulemaking Notice Early September Permanent Rulemaking Hearing Early October - Adopt Rules Late November Permanent Rules Effective

7 PESTICIDES Executive Order D Issued November 12, 2015 Directs state agencies to address threats to public safety posed by marijuana contaminated by pesticides. State agencies involved include CDPHE, CDA and CDOR Use of off-label pesticides on MJ constitutes a threat to public safety CDPHE deems all MJ contaminated with off-label pesticides a risk to public health CDOR is authorized to find MJ contaminated with off-label pesticides a threat to public safety Directs CDPHE, CDA and CDOR to utilize all existing investigatory and enforcement authorities to protect against threats to public safety posed by MJ contaminated by unauthorized pesticides including the use of administrative holds and destruction.

8 PESTICIDES Inspection and Enforcement Process: CDA may initiate a formal investigation upon receiving a complaint about potential pesticide misuse on MJ or based upon inspection results. CDA investigation includes taking statements, obtaining records, and gather samples, which are analyzed by CDA laboratory. CDA then determines if any residues detected would be legally allowed for use on MJ. CDA notifies CDOR of any pesticide residues that are currently not allowed for use on MJ and the Pesticide Applicator s Act and its rules based on its investigation. MED then determines if there are reasonable grounds to place MJ and MJ products on admin hold and the issuance of public health and safety advisories. CDA completes its investigation and a final determination is made of a violation of the PAA, subsequent investigation and due process by MED will lead to appropriate administrative remedies, which may include destruction of contaminated MJ or MJ products.

9 PESTICIDES Public Health and Safety Advisories: MED issues an advisory when they receive notice from CDA that identifies pesticide residue on MJ plants at licensed cultivations. MED identifies all affected licensees and harvest batches of MJ. MED places all MJ and MJ products located at licensees on administrative hold in the METRC system. The advisories identify any MJ or MJ products that have left the cultivation license prior to the CDA notice. These advisories are intended to alert the public of MJ and MJ products that have potentially been affected to ensure public health and safety. Since February 2016, 27 public health and safety advisories have been issued. Consumers who have purchased potentially contaminated MJ and MJ products identified by an advisory are encouraged to return them to the location of purchase.

10 MARIJUANA LICENSING As of April 30, 2016

11 MARIJUANA TAXATION Total MJ Taxes Collected - $220 million (July March 2016) FY 2014 Total MJ Taxes - $19.5 million FY 2015 Total MJ Taxes - $88.2 million FY 2016 Total MJ Taxes - $112.2 million (July March 2016) FY 2016 Retail Excise Tax 15% - $32.6 million (July 2015 March 2016) FY 2016 Retail Sales Tax 10% - $54.2 million (July 2015 March 2016) FY 2016 Retail General Sales Tax 2.9% - $15.6 million (July 2015 March 2016) FY 2016 Medical General Sales Tax 2.9% - $9.9 million (July 2015 March 2016)

12 REGULATED MJ MARKET IN COLORADO Facts from the 2015 Annual Update: 1,469 Licensed Medical Marijuana Businesses and 1,123 Retail Marijuana Establishments 26,929 Occupational Licensees 144,537 pounds of MMJ flower sold in ,932 pounds of RMJ flower sold in 2015

13 REGULATED MJ MARKET IN COLORADO Facts from the 2015 Annual Update: 2.26 million units of MMJ infused edibles sold in million units of RMJ infused edibles sold in 2015 As of December 31, 2015: 221 local jurisdictions have banned both MMJ and RMJ 75 local jurisdictions allow both MMJ and RMJ 16 local jurisdictions allow only MMJ 9 local jurisdictions allow only RMJ

14 For more information please visit the DOR / MED website at:

15 Regulation of Home Grows Bryan Treu Eagle County Attorney 6/12/

16 The Problem Every person over the age of 21 may possess 1 ounce of marijuana. May also possess, grown, and transport up to 6 marijuana plants (3 or fewer flowering). Doesn t seem like that big of a deal. 6/12/

17 The Problem These plants grow up. 6/12/

18 The Problem What about multiple owners or tenants each with 6 plants? What about caregivers that can grow up to 99 plants? What about duplexes, apartments and other shared-wall units?. What if the location is easily accessed by youths? 6/12/

19 County Regulatory Powers Colorado has a strong tradition of local land use control. Colorado does not have a statewide land use plan. Land use regulations, zoning, sign codes and building codes, are, for the most part, locally designated. Good as we all know the community is going to look first to local officials to solve a local problem. Police Power: the inherent power to adopt regulations that bear a rational relationship to the health, safety and welfare of the community. It s an energy filed that is created by all living things. It surrounds us. It penetrates us. It binds the galaxy together. Ben Kenobi Must be exercised in a manner consistent with constitutional rights. There is the rub! 6/12/

20 County Regulatory Powers Don t tread on me. I now have a constitutional right to grow marijuana in my home to the limits allowed by law. Nothing in Amendment 64 gives a person a right to grow marijuana in their homes in a completely unregulated manners. Being able to drink beer doesn t give you a right to build a brewery in your basement. All land use regulation is, in some way, an infringement on a constitutionally protected right. Freedom of expression. We still regulate the size and number of signs/ billboards. Freedom of association. We still regulate the amount of cars parked on streets/residences. Right to be compensated for taken land. We still restrict uses on properties. 6/12/

21 County Regulatory Powers 5th amendment takings analysis. Private property may not be taken for public use without proper compensation. We must pay if we take private property for a road or a trail. But not if we require stream setbacks or property line setbacks. Same constitutional protection. But courts have developed a balance. Balance nature of the use and degree of threat to surrounding properties. We now know the impacts of marijuana grows. It stinks. Unregulated home grows will have an impact on the community at large. Categorically banning cultivation of the permitted 6 plants may violate Amendment 64. But balanced regulations are permissible. 6/12/

22 County Regulatory Powers So we will tread on you. But any such treading must be balanced. The police power is a State power delegated to counties and municipalities. We are limited to the power the State has given us. So what power can we point to support our regulation? 6/12/

23 Local Land Use Control Enabling Act C.R.S Grants counties broad authority to plan for and regulate the use of land, with little or no restrictions, conditions, or procedures prescribed for local governments. Can regulate many things: Regulating land use on the basis of the impact thereof on the community of surrounding areas. Otherwise planning for and regulating the use of land. Approaching the home grow issue from a land use perspective focuses on the impacts of the activity in the community, not the moral or ethical issues of marijuana use. Don t care if it is marijuana or tomatoes, if the product creates an unpleasant stink to adjoining properties it should be regulated. 6/12/

24 Amendment 64 Local jurisdictions expressly have broad authority to regulate marijuana businesses up to and including bans. Purpose is to mitigate impacts on local business community. Hard to imagine having to live with those same impacts on local residential communities. No express authority in Amendment 64 to local governments to restrict or ban residential cultivation (in contrast to the provision on marijuana businesses). The extraction problem Nothing in this section shall prohibit a person... who occupies, owns or controls a property from prohibiting or otherwise regulating the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on or in that property. Landlords needed this power granted. We already have it. 6/12/

25 Amendment 64 Amendment 64 grants the right to grow 6 plants. Amendment 20 established possession limits as an affirmative defense to a criminal possession charge. At best, there is a right to the built-in cap of Amendment 64. The problem is with extended plant count caregivers. Arguably, they have even less protection than the recreational users based on the wording of the two amendments. 6/12/

26 SB15-14 Legislative declaration: Large medical and recreational marijuana grows should be subject to enhanced oversight to augment health and safety Not limited to commercial grows. Limits caregivers to 36 plants unless one or more patients has an extended plant count. Max under any circumstance is 99 plants per caregiver. The location of the cultivation operation must comply with all applicable local laws, rules, or regulations. Nothing herein shall reduce or eliminate the existing power of a statutory municipality or county through the Local Government Land Use Control Enabling Act of 1974, Article 20 of Title 29, C.R.S., to regulate the growing of marijuana commercially or otherwise. 6/12/

27 SB16-80 If a person is growing medical or recreational marijuana in a residence and a person under 21 years of age lives at the residence, the grow site must be in an enclosed and locked space. If no person under 21 lives there, the external locks of the residence constitutes an enclosed and locked space. Contemplates home grows but certainly doesn t authorize it. It also shows it isn t an unfettered right. What about backyard grows? Greenhouse? Chain link fence? Those areas are left to local control. Amendment 64 does not allow marijuana use to be done openly and publicly but no definition. Up to local jurisdictions. Denver front porch preclusion. 6/12/

28 Eagle County Process Cap of 36 plants for medical marijuana regardless of the number of patients or care-givers at the residence. Cap of 18 plants for recreational marijuana regardless of the number of persons over the age of 21 at the residence. Residence defined as the entire parcel of land or lot inclusive of any accessory dwelling units, accessory buildings, agricultural buildings and garages. Law enforcement usually does initial check. Notifies our code enforcement of grows exceeding these caps. 6/12/