A bill setting out guidelines for regulation of marijuana stores in Colorado received a second vote of approval from the state House of Representatives on Saturday and needs one more before it heads to the state Senate. In addition to amendments creating an unfair and misguided new legal standard for driving under the influence of marijuana and extending a rule requiring retailers to grow most of the marijuana they sell, the latest version of H.B. 1317 requires limits on advertising that the original version merely suggested, including a ban on "mass-market campaigns that have a high likelihood of reaching minors." It is doubtful that such a far-reaching rule, suppressing communication with adult customers because it might be seen by minors, would be upheld by Colorado's courts. Such an approach is inconsistent with the way the U.S. Supreme Court has read the First Amendment, and Colorado's courts historically have read the state constitution's free-speech guarantee even more broadly.
Similarly, the bill now requires, rather than merely allowing, the Colorado Department of Revenue to "minimize the market for unlawful marijuana" by limiting the total number of retail licenses, the amount produced by each grow operation, and statewide cultivation capacity. Toward the same end, regulators are charged with creating and maintaining "a seed-to-sale tracking system that tracks retail marijuana from the immature plant stage until the marijuana is sold at a retail marijuana store." Such a system is already supposed to exist for medical marijuana, but it never quite got off the ground.
Under the vertical integration requirement, also supposedly aimed at preventing diversion, pot shops have to grow at least 70 percent of their inventory while selling no more than 30 percent of the marijuana they produce to other stores. That requirement currently applies to medical marijuana centers (MMCs), some of which lobbied to keep it. The bill extends the 70 percent rule through September 30, 2014. It also gives existing MMCs a head start in the recreational market, barring new entrants from seeking licenses for three months.
The new version of H.B. 1317 elaborates on yet another anti-diversion measure: the quarter-ounce limit for marijuana buyers from other states (as opposed to residents, who can buy up to an ounce). The bill now says pot stores may not sell more than a quarter of an ounce at a time to "a person who does not have a valid identification card showing that the person is a resident of the State of Colorado." That way of wording the rule seems to be aimed at reconciling it with Amendment 64, the ballot initiative (now part of the state constitution) that set this whole process in motion. Amendment 64 says the state "shall not require a consumer to provide a retail marijuana store with personal information other than government-issued identification to determine the consumer's age." Here the state arguably is not requiring pot buyers to provide proof of residence. A visitor could use a passport, for example, to prove he is 21 or older without revealing where he lives. But if he wants to buy more than a quarter of an ounce in one transaction, he will need an ID listing a Colorado address.
Other restrictions on marijuana retailers that have been added to the bill since it was introduced include bans on deliveries, Internet sales, on-site consumption, and the sale of "any consumable product," including tobacco, alcohol, and non-cannabis-infused foods or drinks. These rules, together with the proposals to restrict advertising, suggest that Colorado is moving closer to the discreet, buttoned-down version of legalization laid out in I-502, Washington's marijuana legalization initiative.
A companion bill making its way through the Colorado legislature, H.B. 1318, would authorize, subject to voter approval this fall, a 15 percent excise tax and a special 15 percent sales tax on marijuana. As Matthew Feeney noted on Friday, some legislators have hatched a scheme to present voters with an initiative that would repeal Amendment 64 unless the new taxes are approved. That's only fair, they argue, since Amendment 64 passed based largely on (possibly overblown) promises of additional tax revenue, which will be necessary to fund enforcement of all those nifty new regulations. "The whole purpose of it was to raise money for education and so forth," says state Sen. Larry Crowder (R-Alamosa), "so if there's no money, we shouldn't have marijuana." Others see the effort to make marijuana legalization contingent on new taxes as a blatant attempt to subvert the will of voters, who should be able to choose legal marijuana without additional taxes if that is what they want. "That's almost like saying to voters, 'Vote for this, or else,'" says Sen. Cheri Jahn (D-Wheat Ridge). "I don't think you threaten voters like that. When over 55 percent of the people vote for something, I think we have to respect that." While Crowder plots to cancel legalization, his fellow Republicans in the state House are putting their party's resistance to taxes above its aversion to cannabis, pushing to reduce the excise and sales tax rates by one-third, to 10 percent.