Setting rules for recreational marijuana has been a trip

The Colorado Statesman

Blazing a trail for marijuana legalization in Colorado is proving to be an exercise in patience and political gamesmanship, as lawmakers work to balance an onslaught of lobbying and pressure from legislative colleagues.

The odd journey this week of setting rules and regulations for the recreational legalization of the flower that contains tetrahydrocannabinol (THC), the psychoactive ingredient in marijuana, saw bills move to set more than 25 percent in taxes, limiting grow operations and restricting access of cannabis-related publications to minors.

The debate also resurrected what has become known as a zombie bill — an effort to set a limit on driving under the influence of marijuana, affectionately named D-U-High, a play on DUI (driving under the influence.)

This week also saw a plea by local police officers to highly regulate retail sales of the drug, while discussions continue on whether to offer voters a chance to ban retail sales if the tax question fails at the polls this November.

DUID

Perhaps the wackiest movement this week came on Thursday when the House once again revived a bill that would set a 5-nonogram limit for THC at the time of a suspected driving offense.

The bill has been resurrected as House Bill 1325, sponsored by Reps. Rhonda Fields, D-Aurora, and Mark Waller, R-Colorado Springs. It was introduced on May 2 and was given a hearing by House Judiciary on the same day, a very rare occurrence in the legislature. The bill passed the committee unanimously, and then made it through Appropriations the next day, as well as the full House on a preliminary vote.

The Senate Judiciary Committee on April 22 killed House Bill 1114, which would have set the same standard. The bill died, despite the House having overwhelmingly approved the bill.

But then lawmakers amended one of the legalization regulatory bills, House Bill 1317, to include the DUID proposal. That means there are actually two DUID-Marijuana proposals moving simultaneously through the legislature.

For those who have been following the proposal, there are few bills as strange as this one. A similar proposal died last year on the Senate floor before its sponsor at the time, Sen. Steve King, R-Grand Junction, used a procedural rule to revive it for a recorded vote. The Senate then backed it by one vote.

With only a week to clear the house at the time, the bill then fell victim to Republican gamesmanship when they killed 30 bills on the calendar in an effort to block a vote on same-sex civil unions.

But the measure was still not dead. Gov. John Hickenlooper called a special session that year and added DUID to the call. The bill was making its way through the special session, but when it made it back to the Senate floor, Sen. Nancy Spence, R-Centennial, was out of the state with family plans made before the governor issued his special session call. Without her support, the bill died. King again tried to resurrect the bill, but he was unsuccessful.

Amazingly, the bill had one last chance at success. With Spence back around, both sides of the aisle caucused to decide whether to allow another day of special session just for DUID. But both caucuses opted against such a drastic move, and so the proposal died — until it was brought back this year.

During House Judiciary on Thursday, the debate moved away from the policy surrounding DUID and towards the politics surrounding the bill. Waller explained that there are fears that the DUID proposal could bog down the regulatory bill, which might kill the effort at regulating the budding industry.

“One of the issues is we did amend this bill onto another bill that is currently in the Senate, and the feeling and thought process is in the Senate that the bill, the whole bill, will not pass if this provision is a part of it,” explained Waller, who said he was asked by Democratic House leadership to run the measure.

Rep. Joe Salazar, D-Thornton, who had opposed the DUID provision as amended to the regulatory bill, did not seem convinced by Waller’s argument.

“The definition of insanity is doing the same thing over and over again and expecting a different result,” he declared.

During debate on the earlier amendment to HB 1317, Salazar had adamantly opposed it, pointing to a recent U.S. Supreme Court decision on warrantless blood tests, and suggesting that his medical marijuana constituents could be unfairly affected by the limit. But oddly, he backed the DUID proposal in House Judiciary.

He explained to The Colorado Statesman later that he was supporting the bill this time because it was running as a separate measure: “I didn’t feel that it had any room on the marijuana bill, and that’s why I voted against it,” he explained.

Meanwhile, Rep. Bob Gardner, R-Colorado Springs, is calling on Senate President John Morse, D-Colorado Springs, to show some leadership and get the measure through the upper chamber. He said it is imperative given legalization of recreational use, which could cause a proliferation of driving while stoned.

“With all due respect to those people [Senate leadership]… it is a failure of leadership that they can’t get this done,” suggested Gardner. “When a member of their party sits on this committee and says, ‘Why are we seeing this bill one more time?’ I am astounded.”

Morse told reporters on Friday that he is still deciding what to do with the bill when it is likely to make it to the Senate this week during the last week of the regular legislative session.

“We’ll just have to play it by ear and see what happens…” he said. “If the DUID stays in [the regulatory bill] then the new bill that the House is doing won’t be necessary. If not, then I’ll have to look at it and figure out what the heck and how and where and why and when and all that.”

Taxes

With the DUID question still looming, lawmakers must also pass groundbreaking rules and regulations on the new industry, setting a framework that could serve as a model for the rest of the nation. But that’s only if they get it right.

In order to be correct, lawmakers say they need to fund the regulatory scheme, which depends on voters approving a tax question. This is where the issue has become politicized.

Republicans are opposing the referred measure that would ask voters to approve a 15 percent excise tax and a separate 10 percent special sales tax. Those taxes are capped, but could be ratcheted down by the legislature. Cannabis would also be subject to a 2.9 percent statewide sales tax, as well as any local taxes imposed by municipalities.

House Bill 1318, sponsored by Rep. Jonathan Singer, D-Longmont, and Sen. Cheri Jahn, D-Wheat Ridge, has already been modified. Singer started by asking for two separate 15 percent taxes. But amid Republican opposition, he decided to lower the special sales tax proposal.

The bill has already made it through the House and landed in the Senate Finance Committee on Friday night, during a special meeting of the committee called by its chairman, Sen. Mike Johnston, D-Denver, in order to speed the measure along in the waning days of the legislative session. The bill passed on a 3-2 Democratic party-line vote.

Jahn made the argument for the necessity of the bill, suggesting, “We have one chance to do this right.”

Republicans, however, won’t budge on the tax question. It’s a mixture of political philosophy surrounding a tax-and-spend approach that could lead to what they feel would be a slush fund, as well as sending a question to voters that might get rejected, which would throw the entire regulatory process into flux.

Republicans on the Finance Committee were quiet Friday night. But Jahn approached Sen. Kevin Grantham, R-Cañon City, after the meeting, and asked him what his caucus was thinking by rejecting the primary funding source for regulation.

“What do you think would happen? I’ve just been curious about that,” Jahn goaded Grantham. “It has to be voted on in committee… I’m just thinking what would happen? We wouldn’t have any taxes for marijuana?”

Grantham very simply responded, “The majority party always has to take ownership for everything that comes through. Even in a situation like this.”

Jahn then pointed out that without the tax, the state would have to raise licensing fees on retail businesses: “Then you’ll get caught raising fees,” she quipped to Grantham, taking a jab at the Republicans’ anti-tax, low-fee philosophy.

Adding to the controversy is a separate question being discussed that would ask voters to prohibit retail sales if the tax question fails. Morse, a former police officer, said those discussions are ongoing.

The question would be separate of the tax issue, but could come in the same referred measure, explained the Senate president. He said it would not be a repeal of Amendment 64, which legalized possession up to one ounce of marijuana and the individual growing of up to six plants.

“Talking about it as a repeal effort is so disingenuous…” opined Morse. “The original ballot initiative was written to regulate marijuana, make it legal and available and tax it. But the tax wasn’t done properly, and so people voted for marijuana and tax, and what they got was marijuana. We’ll see if they get the tax.

“And so this was just a matter to say, ‘If you don’t get the tax, then vote again, do you want to repeal the retail portion, not the decriminalization portions?’” he continued.

But several sources close to the marijuana discussions say the repeal question has stalled, and that it is unlikely to even be introduced, let alone pass both chambers. A referred measure takes two-thirds of both chambers to send the question to voters.

Regulation

Regardless of the uncertain tax proposal, lawmakers are still forging ahead with bills to regulate the industry. In addition to HB 1317, sponsored by Rep. Dan Pabon, D-Denver, and Jahn, there is also Senate Bill 283, sponsored by Jahn and Sen. Randy Baumgardner, R-Cowdrey, and Rep. Jenise May, D-Aurora.

HB 1317 has made it through the House and passed the Senate Finance Committee on Friday by a unanimous vote. It is scheduled to reach Appropriations on Monday.

SB 283 has made it through the Senate and passed the House on Friday on a preliminary vote. A final vote could come as early as Monday.

The two bills regulate almost every aspect of legalization, including empowering local governments to enact their own rules, updating criminal code, banning substances used in cultivation, establishing educational programs and law enforcement training, developing rules for destroying cannabis waste, limiting exposure to children, banning indoor smoking in public places, establishing rules for selling to non-residents, requiring product tracking, and rules around signage and marketing.

Most controversial was the topic of vertical integration. Vertical integration requires the supply chain to be under common ownership, and 70 percent of marijuana grown to come from such ownership. The original proposal had rejected VI, but the current HB 1317 offers a compromise, which would subject the industry to VI through Sept. 30, 2014.

Also controversial is whether to give current medical marijuana businesses a head start. The current HB 1317 would give them a nine-month advantage. On Oct. 1, medical marijuana shops would be allowed to apply for a retail license. They would be allowed to open — if approved — on Jan. 1, 2014. On July 1, 2014, non-medical businesses would be allowed to apply for a retail license. The Department of Revenue expects approvals to take about 90 days.

Contention also still lingers over whether to restrict the sale of marijuana-related publications to minors, which under Amendment 64 is less than 21 years of age.

The thorny proposal would essentially treat cannabis magazines just like pornography, which comes with its own myriad of First Amendment constitutional questions. But Gardner, who sponsored the late-night amendment in the House to place the magazines behind the counter — just like porn — says he doesn’t want to influence kids.

“As we legalize marijuana, I think we can also control — in time, place and manner — how it is advertised,” he said. “I think that it’s constitutionally defensible.”

Jahn, however, says she’s going to let her colleagues join the debate with her: “I’m not really sure what that whole thing means,” she acknowledged.

For now, the amendment remains in the bill, but sources say there are discussions to strip it from the proposal.
Finally, HB 1317 was also amended to limit grows. The question is whether the state can set limits on the size of commercial cultivation. The original amendment had dictated that the state must set limits. But the Senate Finance Committee amended the bill again to say that the sate can set limits, but does not have to.

“It gives better flexibility to the Department [of Revenue]” explained Jahn.

Revenue officials say they will set grow limits, but they need time to figure out a proper formula.

Police officials raise concerns

Meanwhile, police officials across the state have weighed into the conversation with a letter to Hickenlooper and legislative leaders calling for strict regulations.

The Colorado Association of Chiefs of Police is concerned that the regulation is being rushed through the legislature with a disregard for public safety.

“We are writing to address serious safety concerns regarding the potential for the passage of marijuana laws, which are a grave disservice to the public; not what the citizens voted for when they supported Amendment 64; and which prioritize the use of recreational marijuana over public health and safety,” the organization states.

They have the support of Safe Colorado, a citizens group that has hired lobbyists to encourage lawmakers to pass harsh rules and regulations that limit exposure.

“While appreciative of that cooperation, it is of significant concern that there is such a concerted effort to continue to undermine law enforcement’s effort to keep our youth safe and stop diversion…” continues the letter from the police officials. “If appropriate legislative action is not taken, the dangerous and unintended negative effects of the implementation of Amendment 64 will be felt for many years to come.”

But authors of Amendment 64 shrugged off the letter, saying the law enforcement community is overreacting.
“Many of the concerns expressed are the same baseless argument they and other opponents conveyed throughout the campaign and which voters overwhelmingly rejected,” responded Mason Tvert, co-author of Amendment 64.

“We are pleased to hear that Colorado law enforcement officials are dedicated to securing the resources necessary to implement the regulatory framework outlined in Amendment 64,” Tvert continued. “We trust that they will fulfill their obligation to uphold the state constitution and enforce the laws created by the voters and their representatives in the legislature.”

Peter@coloradostatesman.com