The Road to Retail: What a long strange trip it’s been

The Daily Doobie, December 1, 2013

pavement-markingOn November 6, 2012, Colorado made history when voters passed Amendment 64 allowing for the legal recreational use of cannabis by anyone over 21, and establishing a retail system for the production and sale of marijuana.

The Colorado leadership was stunned when the measure passed, as they were pushed kicking and screaming into a future where cannabis use is no longer limited to dirty hippies and jazz musicians, and people aren’t thrown in jail for smoking a joint or growing a plant.

On election night Colorado Gov. John Hickenlooper, a vocal opponent, reacted to the passage of A64 in a statement: “The voters have spoken and we have to respect their will. This will be a complicated process, but we intend to follow through. That said, federal law still says marijuana is an illegal drug so don’t break out the Cheetos or gold fish too quickly.” In defiance, Cheetos and Goldfish were delivered to his office the following day.

Sadly, the historic moment when the Governor signed Amendment 64 into law occurred without photos or fanfare on December 10, 2012. Instead, the Governor’s office sent out a press release. The opening passage begins, “Gov. John Hickenlooper today signed an Executive Order that makes an ‘official declaration of the vote’ related to Amendment 64. That declaration formalizes the amendment as part of the state Constitution and makes legal the personal use, possession and limited home-growing of marijuana under Colorado law for adults 21 years of age and older.”

With the first anniversary of that historic signing now upon us, it’s a good time to look back at where we came from and how we got here.

After the election the governor appointed a special task force to study the issue and make recommendations to the legislature. Seats were filled with representatives from various agencies and interested organizations, most of whom knew nothing about marijuana in general, much less the intricacies of operating a marijuana business, but they all agreed to go where no one had gone before. The painful educational process began.

Next came the Joint Committee (no joke, that’s its name), made up of legislators from both parties and both chambers and lead by Rep. Dan Pabon. This group proceeded to tear apart the work done by the Task Force, rehashing every possible point.

Let’s not forget one of the most important parts of Amendment 64: industrial hemp. The afternoon the Hemp Bill was heard by the House Agriculture Committee was one of the most inspiring highlights of the legislative session. Following an impressive parade of experts from all divisions of the hemp industry – food, fiber, biofuel, textiles, paper, construction – the Committee was singing the praises of hemp.  “Hemp could save our economy!” “Hemp could save our environment!” Had this been an episode of Glee, I would have fully expected the entire room to be dancing on the tables singing the praises of hemp.

The final issue to be decided was how to tax this new industry. Amendment 64 authorized an excise tax of up to 15% on retail marijuana, but as Senator Steadman noted, for the pigs lining up at the trough that the excise tax wouldn’t be enough. Everyone had their hand out, demanding their cut, so another sales tax of up to 15% was added to the plan, all of which would have to be approved by voters.

Finally, on May 8, the legislature adjourned giving us three separate A64 bills, all intended to work in concert to guide the regulation and enforcement of retail marijuana in Colorado. They were signed into law on May 29, 2013, this time with an impressive assortment of industry insiders, politicos and the media in attendance.

All this time, the towns and counties were waiting with bated breath to hear what the state came up with. Now it was up them to decide how they wanted to regulate marijuana in their own communities and every elected official was faced with the first question: opt in or opt out?

One of the first to opt out was Greenwood Village, but that wasn’t enough. By making marijuana illegal on city property, then defining all public streets and sidewalks to be city property, the city council effectively banned people from transporting marijuana into town. Any marijuana would have to be grown on the premises, flown in by carrier pigeon or dropped from drones.

Towns and counties started dropping like flies as one after another implemented bans and moratoriums. Some banned because their community voted against A64. Others, like Idaho Springs, tried to go against the will of the voters by banning retail, then changed their position when threatened with a challenge in the upcoming elections. Other small towns like Nederland and Edgewater embraced the promise of abundant tax revenue and eagerly agreed to opt in.

The local debates were often heated as Reefer Madness infected policymakers across the state. None worse than Colorado Springs, where fears of lost military contracts, closed bases and reduced tourism tipped the balance in favor of banning retail marijuana businesses in a 5-4 vote.

Although A64 passed with 66% of the vote, with prohibitionist Mayor Michael Hancock and a legion of followers in the community and on city council, Denver has been the most challenging. Yes, Denver will allow retail marijuana, but deciding what that looks like took months of education and discussion by a special committee. Determining that the share from the new state special marijuana tax wasn’t enough, Denver and other towns implemented a local tax.

While towns and counties across Colorado debated setbacks and land use, the Department of Revenue hosted rulemaking working groups to develop the regulations governing the newly created retail marijuana industry and updating those for the already existing medical marijuana industry. A tough job considering that no matter what they came up with, people were going to hate it.

A year later we’re left with a patchwork of retail shops in clusters where they are allowed and vast stretches between retail shops, like from the metro area south to Pueblo, where they are not. Because the state failed to define “open and public,” new ordinances restricting where and how consumption is allowed are popping up across the state.

A year from now, on the second anniversary of the signing, the retail marijuana industry will be in full flower. Things will look quite different as vertical integration goes away, businesses are allowed to decouple, and new people enter the market. As with medical marijuana, fears will dissipate as people see that tourists are still coming, the children are safe and the sky hasn’t fallen.

Where we stand now:
•  December 10 marks the anniversary of the signing of Amendment 64 into law.

•  In November the state marijuana tax scheme was passed by the voters, along with every local marijuana tax across the state.

•  The first retail license in the world has been issued by the state to Annie’s in Central City. Congratulations!

•  Colorado Springs, the second largest market in the state, has banned retail marijuana, but there is a strong medical marijuana community and 3 private toking clubs in the city. Folks there can head to Manitou Springs or Pueblo to shop if they don’t feel like making the drive to Denver.

•  Aurora realized they were missing out on a lot of tax revenue when they banned medical marijuana, and will be opting into retail marijuana. Now if we can just get them to reverse the ban on medical.

•  Boulder has a moratorium in place until March 31, 2014, but will begin taking applications for retail on January 2.

•  Aspen will be opting in and has little concern about public consumption, but if you’re caught with a joint at Araphoe Basin, they’ll pull your pass.

•  Ft. Collins is planning to move forward later in 2014. Larimer County will allow the few existing businesses to convert to retail, but have banned marijuana-infused edible products.

•  Denver will allow existing medical marijuana businesses to convert to retail, but no new entrants until Jan. 1, 2016. All retail applicants must go through a public hearing process.

•  Denver is redefining the term “public” by restricting marijuana consumption on private property if it can be seen from the street or sidewalk. Denver also is considering new restrictions on marijuana odors and consumption near schools.

Via The Daily Doobie

Categories: Celebrity Stoners, Colorado, Law Enforcement, Policy & Politics, States

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