Colorado Springs News, Sports & Business

Gazette Premium Content Pot industry lobbies for lower licensing fees

By Megan Schrader Published: August 20, 2013

Existing medical marijuana stores will have to jump through hoops and lay down cash to convert to retail pot shops selling the newly-legalized drug to anyone over the age of 21.

The Department of Revenue - the agency charged with implementing and regulating legalized marijuana retail sales - spent Tuesday taking public comment on the proposed rules to regulate the fledgling industry.

Most of the public comments came from the pot industry, concerned about the cost of doing business. A few concerned parents urged more regulation.

The first retail marijuana stores where anyone with a valid ID can buy marijuana could open as soon as January 2014.

Under the rules - most of which were set forth in statute during the legislative session - only existing or pending medical marijuana stores will be eligible to open retail stores.

First they will pay a $500 application fee, along with details of who is financially tied to the business, fingerprints for background checks of all those business partners and proof of an operational security system and product tracking system in place.

The application and half of the fee will be forwarded to local jurisdictions for simultaneous consideration.

The city of Colorado Springs has already banned retail marijuana stores so no applications or fees will be sent to the city.

An application can be denied for a variety of reasons. The business partners must have been Colorado residents for two years, cannot have been convicted of a felony in the past five years or of a felony drug charges in the past 10 years.

Once approved the applicants will pay a licensing fee based on the size of the business' existing medical marijuana clientele.

A small pot shop would pay $3,750 for a retail licensing fee, while a large shop would pay $14,000.

Then if those store owners also want to grow their own product it's another $2,750 and if they want to use that marijuana and for baked goods or other products it's another $2,750 fee.

Michael Elliott, executive director of the Medical Marijuana Industry Group, said its top concern is keeping the cost of doing business down.

Elliott said the only fee his organization questions the rule requiring double fees for a medical shop that wants to double as a retail store.

"The fees are supposed to be tied to the cost to the enforcement division and right now we're not seeing how the enforcement division has tailored that second fee to their actual costs," Elliott said.

He estimated most of the businesses will hope to keep the medical side open to keep their existing client bases and also to provide those customers with the ability to get a tax break on the sales tax.

"My group is supporting the state tax that's going to be on the ballot this November," he said.

Voters will decide in November whether marijuana should be levied with a 15 percent excise tax and up to a 15 percent sales tax.

But in return, Elliott said he expects for reasonable fees.

Fees for new companies - those that didn't get a start on the medical side - will be set at a later date when they are finally able to enter the market after an 18-month moratorium.

But those newcomers will have to pay a $5,000 application fee instead of the discounted $500 fee for existing medical businesses.

Public comment will be taken Wednesday on another set of proposed rules and then the Department of Revenue will consider changes.

After a series of reviews by the attorney general and another round of public comment, the rules will be set in October.

Contact Megan Schrader

719-286-0644

Twitter: @CapitolSchrader

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