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Moratorium on medical marijuana businesses could be lifted March 1

December 1, 2010

The statewide moratorium on new medical marijuana businesses could be lifted as early as March 1, four months before the expected date to remove the ban, Matt Cook, senior director of enforcement for the Colorado Department of Revenue, said Wednesday.

Cook said his office in January will  present more than 120 pages of draft rules to the state licensing authority for consideration.

The proposals can be adopted, rejected, modified or amended, he told officials from the state’s 64 counties at an annual winter conference in Colorado Springs.

Rules that the licensing authority approves to govern the burgeoning industry are expected to become law by March 1, he said.

That would enable new businesses to apply for state and local licenses to open. The 17 counties that placed moratoriums on the industry, pending the outcome of state regulations, would have until July 1 to decide whether to outlaw or allow the businesses, either by a resolution, ordinance or public vote. Cook said he expects several counties to hold special elections this spring to decide the matter.

El Paso County voters rejected a proposed ban on medical marijuana-related businesses in November.

On July 1 of this year, state officials placed a one-year moratorium on the startup of medical marijuana dispensaries, grow centers and production of infused products, such as brownies, or the relocation of existing facilities, and directed the Department of Revenue to create regulations to clarify and support legislation state lawmakers enacted in June.

The new requirements are designed to address legal uncertainties, improve public safety, ensure the legitimacy of patients and business owners and monitor compliance with laws, he said.

“I think there are medical benefits to cannabis, but I think there’s widespread abuse out there and we need to get it under control,” said Cook, a former police narcotics officer.

About 2,300 existing businesses met the Aug. 1 deadline to apply for state licensing and pay fees starting at $1,250 for grow operations and ranging from $7,500 to $18,000 for dispensaries. The state collected $8.3 million from those application fees, Cook said, which is paying to regulate the industry.

His office has hired 30 employees to conduct background investigations of all employees. He plans to more than double the staff, including investigators for three new field offices in Colorado Springs, Greeley and near Grand Junction to monitor area operations. The local office should open in February or March, Cook said.

Colorado voters approved the use of medical marijuana in 2000, and the industry kept a low profile for about nine years, largely because medical marijuana remains illegal on the federal level. But the Obama administration’s decision to relax federal prosecution of the medical marijuana industry opened the doors for a business explosion.

Stricter state laws address some of the issues, but not all. That’s where Cook’s new rules come in.

Among the proposed changes, created by a “work group” of about 30 people from various industries and agencies: 24/7 video surveillance of centers that would be scrutinized by state investigators;  protocols for handling waste, such as stems from marijuana plants; standards for searches and seizures; tracking unfair business practices, such as selling products below cost; weighing transported products at the origination and destination sites for discrepancies; requiring state certification of all employees; replacing the flimsy paper identification card for patients with a photo ID, and levying fines of up to $100,000 for violations.

The Department of Revenue has identified about 100 facilities statewide that are in violation of laws, he said, and will be taking action.

New regulations won’t end the debate, though. Cook said he’s worked with state lawmakers on at least three bills that they intend to introduce in the legislative session that begins in January. One is a “clean-up bill” that would address some of the legal loopholes in current state statutes.



• The Colorado Springs City Council will discuss stricter zoning regulations for medical marijuana-related businesses, as recommended by the city’s Planning Commission, at its informal Dec. 13 meeting. City Council will vote on the proposed changes on first reading Dec. 14.

The Planning Commission wants a 1,000-foot buffer zone between dispensaries and schools, preschools, colleges, universities, residential child care facilities and drug and/or alcohol treatment centers, which could include places where Alcoholics Anonymous meetings are held. There currently are no restrictions on where medical marijuana-type businesses can operate within city limits. An industry advocate says more than 100 dispensaries could be affected.

• Temporary land use regulations for medical marijuana businesses in unincorporated El Paso County expire this month. County commissioners enacted the zoning rules Dec. 17, 2009, and reinstated them for six months in June. Commissioners said last month that they will consider permanent regulations for the industry. Voters narrowly rejected a proposal to ban such businesses in the Nov. 2 election. County records show about 15 businesses operate in unincorporated areas.

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