Amendment 64: What a Long Strange Trip It’s Been

1. Amendment 64: What a Long Strange Trip It’s Been 2013 SDA Annual Conference

2. 2012: Down the Rabbit Hole We Go!

3. Allow individuals who are 21 years old or older to possess, use, display, purchase, transport, and transfer (without remuneration), to individuals who are 21 years old or older—one ounce or less of marijuana. Amendment 64 Regulate the growth, manufacture, sale and testing of marijuana in a system of licensed establishments overseen by state and local governments.

4. Amendment 64 Task Force Legislature • Governor creates task force to make recommendations to legislature on implementing Amendment 64. Comprised of 5 Working Groups. Tax/Funding and Civil Law - Potential revenue sources and testing requirements Local Authority and Control - Role of local government in the regulatory model Amendment 64 Task Force Consumer Safety/Social Issues - Substance abuse and prevention, advertising, and labeling. Regulatory Framework - Licensing program and rule making. Criminal Law Issues - Required changes to existing criminal statutes

5. Establish and define “operating fees” • State-issued licenses should be conditional until local government gives authorization/approval • What that approval looks like is up to the local government (local license, simple land use approval, etc.) • Governor should reconvene task force in 3 years to review recreational marijuana industry and the regulatory scheme that is in place Local Authority Working GrouP Recommendations

6. On to the general assembly!

7. Implementing Legislation:HB13-1317 SB 13-283HB13-1318 HB 13-1325

8. Recreational Marijuana Timeline • July 1, 2013 – Department of Revenue (“DOR”) shall adopt necessary regulations • October 1, 2013 – Localities must enact an ordinance or regulation specifying the entity within the locality that will be responsible for licensing (unless they opt to ban) • October 1, 2013 – DOR shall begin accepting and processing license applications

9. Recreational Marijuana Timeline • January 1, 2014 – DOR must begin issuing licenses (first businesses allowed to open) • January 1, 2014 through October 1, 2014 additional triggers under HB 13-1317 (new players in the market, relaxing of vertical integration rule, etc.)

10. Local Options • By October 1, 2013 • Each locality shall enact an ordinance identifying the entity responsible for licensing (assuming they aren’t banning) • Local governments can, at any time, prohibit (ban) the operation of marijuana enterprises within their local limits by passing an ordinance • Local governments NOT prohibiting may enact own licensing programs, defer to the state or rely on land use approvals

11. Four License Types Established by HB13-1317 • Marijuana Cultivation Facility • Marijuana Product Manufacturing Facility

12. Four License Types Established by HB13-1317 (Cont’d) • Marijuana Testing Facility • Retail Marijuana Store

13. Initially, only medical marijuana licenses holders will be eligible to apply for recreational licenses

14. Marijuana Licensing Options • Applicant may surrender the medical marijuana license upon issuance of retail marijuana license • Applicant may opt to operate both retail and medical establishments • May only have both establishments at same location if the local jurisdiction permits it. • Retail and medical stores must have a physical separation between the two establishments unless both establishments intend only to sell to persons 21 years or older.

15. Revenue and Taxation • HB 13-1318 refers a single question to the November 2013 statewide ballot with two revenue raising components: • 15% excise tax on cultivated marijuana earmarked for school capital construction and • 10% special sales tax to be imposed over and above the state’s normal 2.9% sales tax. • The legislature can increase or decrease the rate. Rate can go no higher than 15% • 15% shareback to local jurisdictions (i.e. 1.5% tax) • State sales tax and fee revenue earmarked for state “direct and indirect costs”. • Local shareback is NOT earmarked

16. Additional Consideration for Local Governments • Initiative & Referendum • Nothing precludes proponents or opponents of RMJ from circulating a petition to refer a question to voters in an effort to overturn the local elected board’s decision. • Initiated or referred measure to opt-out or opt-in can only appear on the ballot during an even numbered election year (i.e. Nov. 2014)

18. Colorado Constitution, Article XVIII, Section 16, (6)(a) “Nothing in this section is intended to require an employer to permit or accommodate the use, consumption, possession, transfer, display, transportation, sale, or growing of marijuana in the workplace or to affect the ability of employers to have policies restricting the use of marijuana by employees.” Employers' Rights

19. The Feds FINALLY Chime In 8/29/13 Memorandum from Deputy AG Cole laying out federal position: • - Prevent distribution to minors • - Prevent diversion out of state • - Prevent revenue from going to criminal enterprises or cartels • - Prevent drugged driving • - Prevent growing on public lands

20. The Feds FINALLY Chime In • And there may finally be some movement on the issue of financial transactions and banking for marijuana businesses – a major challenge for this nascent industry. • From a regulatory standpoint, it also makes auditing these businesses much more difficult for the state.

21. Questions?

22. Amendment 64: What a Long Strange Trip It’s Been 2013 SDA Annual Conference