Transcript Legalized Marijuana Update

Legalized Marijuana Update
CWAG Annual Conference
July 22, 2014
David C. Blake
Deputy Attorney General
Colorado Attorney General’s Office
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7/18/2015
Legalized Marijuana
• Medical (Amend 20) and Rec (Amend 64)
• Limited possession 21 & over
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1 oz of MJ plant or concentrate, 100 mg of THC in an edible or
No more than 6 plants in home grow
• May not consume “openly and publicly”
• Local opt in/out; Approval and Regulation
• Significant Litigation and Legislative Effort
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Commercial Licensing
• Dept. of Revenue, Marijuana Enforcement Div
• Growers
• Processors
• Retail stores (sell only marijuana,
paraphernalia)
• Testing Facilities
• Licenses limited to Colorado residents (2 yrs)
• Applies to all “members” of business entities
• Criminal background checks for members
and financiers
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Similar but Different…
Taxes*
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15% Excise Tax (first $40m to schools)
10% Point of Sale Tax
Regular 2.9% Sales Tax**
Local Tax if imposed
Effective Tax Rate of about 22%
• Approx. $35m in total taxes Jan – May 2014
• Monthly Sales range between $14m and $19M
per month for recreational
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* In litigation for tax collection
** Medicinal Marijuana only subject to 2.9% Sales Tax
Similar but Different…
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Zero Policy Policies for Employers and Property
Owners (but we are bring sued)
Edibles less regulated (new law takes effect 2016)
1000’ buffer from schools but local controlled
(Federally Enforced in 2012)
Advertising restrictions (but we are being sued)
Labeling and Packaging (Childe Proof; THC content;
Contents, Warnings)
Child-Resistant packaging
Product tracking using RFID tags and Real-Time
Tracking System
Authorized Banking Cooperatives
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Similar but Different…
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DUI presumptive inference limit: 5ng active THC / mL blood
24 Hour Surveillance (no longer real time)
No Firearms
Approximately 50 Enforcement Officers for entire
State
Food Safety is job of local jurisdictions
Locals, not state, can ban home production of
Extracts
Require THC Testing but done by private labs
Contaminant Testing is coming (Recreational Only)
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Supply and Demand
• Approx. 130 Metric Tons of MJ in 2014 (21+ only)
• Approx. 485K regular users of marijuana in
Colorado
• Chronic Users Continue to Use Medical MJ
• Regular Users drive market – approx. 22% of users
consume almost 70% of MJ sold (tax loophole)
• Rare Users, make up 1/3 of market, account for less
than 1% of demand
• 90% of customers in Mountain Towns are from Out
of State
• Costs between $150 and $300 per oz
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Meanwhile, in a state near
you…
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Industry Campaign…
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Polls above 50% everywhere
National Strategy . . . State by State
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Professional and Well Funded
Now in 33 States and increasing Federal Response
Strategy has 4 Main Parts
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Market the Medicinal Value
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No State Started with Recreational
Charlotte’s Web Strain
Compare it alcohol and/or tobacco
Benefits Education with Tax Dollars
Saves Money (less law enforcement/War on Drugs)
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Industry Marketing…
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Industry Marketing…
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Industry Campaign…
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Polls above 50% everywhere
National Strategy . . . State by State
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Professional and Well Funded
Now in 33 States and increasing Federal Response
Strategy has 4 Main Parts
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Market the Medicinal Value
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No State Started with Recreational
Charlotte’s Web Strain
Compare it alcohol and/or tobacco
Benefits Education with Tax Dollars
Saves Money (less law enforcement/War on Drugs)
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Lessons Learned…
• Don’t put it in your Constitution!
• Don’t allow Medical and Recreational
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Regulated Differently
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Both in Constitution
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Caregiver “Loophole” (Gray Market)
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Different Taxing Schemes
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Different public consumption restrictions
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Dude, How Did We Get Here?
Banking (money laundering; tax fraud/evasion; BSA/SARs;
FINCEN Guidance & Valentine’s Day memo; Federal
Reserve; public safety/cash management; Co-ops; OCC;
FDIC/NCUA; HR2652/Perlmutter)
7/18/2015
• Federal/State
Federalism/PreEmption (Raich; CSA; Asset Forfeiture (civil
vs. criminal); interstate trafficking; airport seizures; federal
lands; Ogden Memo; Cole I; Cole II; USAO Letters; US Mail
seizures)
IRS (tax collection; 280E; small business exemptions;
income standards (fed vs. State))
State cooperation w/Federal enforcement (info sharing;
subpoenas; task forces)
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Dude, How Did We Get Here?
 Doctors (meaningful management of patient; DEA license; medical necessity)
 Constitution vs. Statutory
 Edibles (serving size; THC contents; labeling; same as food; markings; child
proof; trademark)
7/18/2015
Regulatory (State and Local)
 Lawyer Ethics
 Taxes (sales tax; excise tax; local tax; fees; restrictions on spending (MJ related vs
potholes); prevention education; treatment funding; capital construction for education
(mixed messages); general funding; medical untaxed vs recreational taxed 2X)
 Ownership/Employees/Investment (Residency; jurisdiction; background checks
(fingerprint); bonding; Straw Ownership)
 Chronic Illness (PTSD; “Chronic Pain”; high-CBD content)
 Point of Sale Quantity Limits (anti-trafficking amounts, personal use amounts, medicinal amounts
(recommendations))
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Sale to Minors (fake ID training; confiscation; mandatory alerts/hold)
Diversion (to under 21; interstate; of tainted/mislabeled weed; MIP redefine)
Seed-to-sale (technology; real-time monitoring; audits/inspections; record keeping)
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Dude, How Did We Get Here?
 Trademark Infringement
 DUID (Per se limits; Inferences; blood draws; 18-21?; under 18; Delta 9 THC;
oral swabs; statistics/metrics; alcohol/THC mix; mandatory mins; vehicular
manslaughter; repeat offenders; ARIDE training and DRE Officers)
 Consumer Protection (testing; contaminants; trademark infringement;
content/potency labeling)
7/18/2015
Regulatory (State and Local)
 Public consumption ("open and public”; front porch next to a playground; edibles vs
burning)
 Local control (public advertising; zoning; opt-out/opt-in; inspection standards (food,
fire, grows); establishment licensing)
 Advertising (internet; circulars; street signs; store signage; pop-ups)
 Magazine ban (1st Amend; behind the counter)
 Government Employee conspiracy participation (seizure return; tax collection; advice; )
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Home grows (amounts; first safety; child access; extraction)
Safety mechanisms (potency limits, labeling, child proof packaging)
Grow size limits
Operating Applicants
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Dude, How Did We Get Here?
 Metrics/Statistics (LE tracking; DUID tracking; usage rates; health risks; rise in
health costs; LE costs (rise or lower Firearm possession (ATF Form 4473; de
facto ban; Felon in possession)
 Free give-aways/sales/promotions
 Testing lab capacity (in-state only; out-of-state; same level of control)
 Danger Labels vs Child Proof packaging
7/18/2015
Regulatory (State and Local)
 Caregivers (agency law; “assistance”; direct relationship; caregiver loophole; affirmative
defense; Blue Cards)
 Possession Oz/Plant count limits (enforcement (1oz vs 1.1oz); concentrates; edibles; equivalents (bud vs wet vs
edible vs concentrate; open container definition)
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Heat vs. Cold extraction (concentrates banned?)
Home grows (banned?)
Consumer Privacy/Registry Confidentiality
Higher Ed (clinical trials; strain testing; independent tests; government testing (non-DEA)
Hemp
Gov’t Controlled (ABC stores)
State vs State (lawsuits; grant program (anti-diversion); cooperation)
Mobile stores
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Contact Info:
David Blake
Deputy Attorney General for
Legal Policy and Government Affairs
[email protected]
303/866-5792
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