11 Rules for Legal Pot in Colorado
Earlier this morning I noted the final meeting of the Amendment 64 Implementation Task Force, which is advising the Colorado General Assembly about how to regulate the production and distribution of marijuana for recreational use. Here are some of the most significant recommendations approved this week and last:
1. Require both state and local approval for marijuana stores.
2. For the first year, retail licenses should be limited to current operators of medical marijuana centers (MMCs).
3. Pot stores should be required to grow at least 70 percent of what they sell to consumers and sell no more than 30 percent of what they grow to other stores or producers of cannabis-infused products. This is the current rule for MMCs, many of which fought to keep it. It would expire after three years, at which point the legislature could choose a more flexible approach that neither requires nor bans vertical integration.
4. Advertising should be restricted, which depending on the details could invite challenges under the Colorado constitution's free speech clause (but not under the First Amendment, since marijuana is still prohibited by federal law).
5. THC content should not be restricted, but it should be listed on packages.
6. The legislature should consider requiring "child-proof" packaging for marijuana products, which would increase retail prices.
7. Visitors as well as residents of Colorado should be allowed to buy marijuana, as long as they are 21 or older.
8. The amount of marijuana a consumer may buy in a single purchase should be capped at a level below the one-ounce limit that Amendment 64 puts on possession, perhaps an eighth of an ounce, for both visitors and residents.
9. Marijuana should be taxed heavily, with a 15 percent excise tax imposed at the wholesale level and a special sales tax, perhaps as high as 25 percent, imposed at the retail level, in addition to existing state and local sales taxes (which total 8 percent in Denver, for example). Depending on how high the rates are and how they interact with markups, this triple whammy could push retail prices close to the black-market level, which would undermine the central aim of Amendment 64 to create a legal market in which marijuana is treated like alcohol.
10. The legislature should amend the state ban on smoking in bars and restaurants so that it covers recreational marijuana.
11. Home cultivation, which is permitted by Amendment 64, should be kept indoors.
These proposals are mostly bad news for consumers, although the recommendations against THC limits and residence-based restrictions on purchases are welcome. The former would be arbitrary and unworkable, while the latter would be unenforceable and inconsistent with the language of Amendment 64.
Update: According to University of Denver law professor Sam Kamin, a member of the task force, part of the motivation for proposing a special sales tax was the difficulty of assessing and collecting an excise tax when the same entity is both wholesaler and retailer, as required by the 70/30 rule. He says some members of the task force repeatedly warned that setting taxes too high would push consumers back into the black market.
Kamin says there was a consensus that Amendment 64, which lets people transfer up to an ounce of marijuana "without remuneration," does not allow them to give away marijuana while soliciting "donations," but that position was not part of a formal recommendation. He says the task force also did not make a recommendation about on-site consumption, except for saying that pot smoking in businesses should be banned under the Colorado Clean Indoor Air Act. That would leave open the possibility of allowing people to use vaporizers or eat marijuana edibles in a café-like environment, either at marijuana retailers or in bars and restaurants where people could bring their own pot.
Another unresolved (and related) question: What does it mean to consume marijuana "openly and publicly," which remains illegal under Amendment 64? If you smoke pot on your front porch, is that "openly and publicly"? What about the back yard? Since consumption is prohibited only when it is open and public, it should be possible to smoke pot on public property (a park, say) as long as you are discreet. Conversely, consuming marijuana while sitting on a restaurant's patio arguably would not be public (since it's on private property) but would be open. Kamin says this issue was so contentious that the task force did not take a position in it.
