THE BLOG
07/02/2010 05:12 am ET Updated May 25, 2011

Proposed Medical Marijuana Rules Would Rush Compliance

Colorado's medical marijuana industry continues to be a lone bright spot in an otherwise bleak economic landscape. In less than a year, thousands of entrepreneurs across the state have stepped up to shape an entirely new healthcare model serving the previously unmet medical needs for tens of thousands of Coloradans. Perhaps most miraculously, we do it all with virtually no regulation from the state and a federal government that seems to have, at best, a tenuous grasp on its own law enforcement agencies.

Unlike many of my peers, I spent this 4/20 in the capital watching Colorado's House have their final debate on proposed medical marijuana business regulations. After more than 2 hours of floor debate and more proposed amendments than this year's state budget, a 72-page bill emerged that clarifies and protects the medical marijuana supply chain. It gave the Department of Revenue authority to bring all stakeholders to the table to write the rules that accompany a new 72 page law. By July 1 of this year all existing caregiver businesses would have to register their existence with the state, and by July 1 of next year all dispensaries would have to submit a formal application to state and local officials pursuant to the new rules. Most importantly, the 2011 General Session would occur before all the new regulations are put into effect to allow for any changes that will be needed.

In the midst of this debate, I watched several people go the podium only to say "it's all about jobs, jobs, jobs," which, ironically, was always sure to get a round of laughs from the room. It was less laughable a few weeks before, when GOP gubernatorial candidate Scott McInnis spoke about the importance of Colorado's economic prosperity.

"You know the (jobs) that had 100% medical insurance, the ones that went down to the dealership and bought the big pickups, the ones that were our neighbors, ate in our restaurants... many of us (were) involved in that."

While Mr. McInnis was talking about jobs lost in the natural gas industry, he just as easily could have been talking about jobs added in the medical marijuana industry. Our industry was built on sweat, equity and personal savings. Bank loans don't exist for us, and even checking accounts are often hard to get approved. Most dispensaries rapidly reinvest virtually every dollar of profit to upgrade their facilities, hire more employees, and evolve with the industry and it's regulations. We eat in local restaurants, we hire our neighbors to help build this industry, and the money we earn is quickly reinvested in our community. We are your neighbors, and the benefits felt in medical marijuana are quickly felt across the entire state.

However, two changes made by the Senate appropriations committee on Friday threaten to undo virtually everything beneficial about this bill. No longer does it give everyone - local governments, Department of Revenue, caregivers - a year to pragmatically write and implement this new system. Instead, many of the "new rules" would go into effect roughly six weeks after the bill is signed. Another change eliminates the one-year period for growers and dispensaries to comply with the "70/30 rule", which says all dispensaries must produce at least 70% of their own inventory. No politician would dream of writing a law requiring Whole Foods to grow at least 70% of the produce they sell, much less on 6 weeks notice, yet the state legislature appears ready to force just such a change on our caregiver businesses.

In contrast, the legislature recently passed HB1365, which incentivizes Xcel Energy to convert three coal power plants to natural gas. This bill requires Xcel to have a plan ready by Aug 15, then allows another 17 weeks for all stakeholders to get ready to implement the change, followed by a full eight years to complete the transition. The bill has bipartisan support from environmentalists, Colorado gas companies, and Xcel and has been praised as a model for other states to follow. Yet such a deal would be unthinkable if Xcel only had a few weeks or months to complete the transition.

Since all actual costs of implementing the program have to be paid by new fees, the chaos of simultaneously writing and enforcing this brand new regulatory structure will require lots of full-time and temporary staff at Department of Revenue, which translates to thousands of dollars in new fees per applicant. So, imagine a new law that not only forced Whole Foods to grow 70% of their own produce, but also that every grocery store in the state would have to pay thousands of dollars in unexpected fees to remain in business beyond next month. Such a sweeping transformation would be unthinkable to force on virtually any other business with only 6 weeks to prepare, yet this is exactly what is now being considered by our state's Senate.

If you are a patient or provider that has checked out of this process until now, today is the day to get involved. Our legislators still seem to think that the only thing that gets "the marijuana vote" is a ballot initiative with the word "Marijuana" in its title. What they don't understand is that in 2009, "the marijuana vote" expanded to include everyone that feels the trickle down effects of this new opportunity. Landlords, publishers, contractors, accountants and business lawyers have begun to work with us. Local governments once consumed with quickly implementing moratoriums are now planning their local regulations for after the state has acted. And most importantly, our state's 100,000+ medical marijuana patients and providers deserve to have a system they can rely on. In return, Colorado can lead the nation in medical marijuana public policy and research into the science of marijuana.

Between July 1 and December 1 of last year - the height of our industry's growth - 50,400 people across the state found a job and got off unemployment. While medical marijuana certainly didn't account for all those new jobs, our industry was a catalyst that supported a lot of them. Now is the time to lock in the compromise reached in the House, to provide fair business regulations to Colorado's medical marijuana industry and to move forward on rationally implementing these new regulations.

Remember, it's all about jobs, jobs, jobs.