Colorado Gov. to Sign Marijuana Tax and Regulation Bills Today

Colorado Amendment 64 victory celebration, November 2012.

Colorado Amendment 64 victory celebration, November 2012.

DENVER, CO —  Colorado Governor John Hickenlooper is expected to sign a series of bills Tuesday that will tax and regulate marijuana as approved by voters in Colorado.

The legislature was charged with creating the rules and regulations for the recreational cannabis industry when voters approved the marijuana legalization Amendment 64 last November, and finalized those regulations in early May.

The bills will establish, among other things, the regulations regarding how marijuana should be grown, packaged and sold.  The bills also include a law giving the voters the option of imposing a 25% tax on recreational cannabis, a bill to create new impaired driving limits, and a bill allowing marijuana businesses in Colorado to claim certain business deductions at the state tax level.

The marijuana regulation bills, House Bill 1317 and House Bill 1318, create the framework for regulations governing marijuana retail sales, cultivation, and product manufacturing. Under the provisions of Amendment 64, the Colorado Dept. of Revenue has until July 1 to develop the specific regulations necessary for implementation.

House Bill 1318 enacts a 10% special sales tax on retail sales of non-medical marijuana (in addition to standard state and local sales taxes) and a 15% excise tax on wholesale sales of non-medical marijuana.  Under Colorado’s Taxpayers’ Bill of Rights law, the bill enacting the marijuana taxes,  House Bill 1318, will still have to be approved by voters in November.

A survey commissioned by the Marijuana Policy Project, and conducted last month by North Carolina-based Public Policy Polling, found that 77 percent of the 900 registered Colorado voters polled favored the proposed taxes.

“The adoption of these bills is a truly historic milestone and brings Colorado one step closer to establishing the world’s first legal, regulated, and taxed marijuana market for adults,” said Mason Tvert, director of communications for the Marijuana Policy Project, who served as an official proponent and campaign co-director for the ballot measure approved by Colorado voters in November.

“Facilitating the shift from the failed policy of prohibition to a more sensible system of regulation has been a huge undertaking, and we applaud the many task force members, legislators, and others who have helped effect this change,” Tvert said. ”We are confident that this legislation will allow state and local officials to implement a comprehensive, robust, and sufficiently funded regulatory system that will effectively control marijuana in Colorado.”

The bills were adopted in accordance with Amendment 64, a ballot measure approved by 55% of Colorado voters last November. Gov. Hickenlooper issued executive orders in December officially making possession and home-growing of limited amounts of marijuana legal for adults 21 and older and establishing the Amendment 64 Implementation Task Force to provide legislators and regulators with recommendations for establishing a regulated marijuana market for adults.

The two-month task force process culminated at the end of February and was followed by an additional two-month legislative process.

Under the four bills passed this week, Colorado’s recreational marijuana market will shape up like this:

  • Recreational marijuana will be sold in specially licensed retail stores that will also be allowed to sell paraphernalia, such as pipes, bongs, and vaporizers.
  • Only Colorado residents can own or invest in the retail marijuana industry.  There is a two-year residency requirement for owners and investors.
  • Only curent medical marijuana dispensary owners will be allowed to apply to open a recreational marijuana store for the first nine months.
  • Recreational marijuana stores are expected to open in early January, 2014.
  • Colorado residents will be allowed to purchase up to one ounce of marijuana, the maximum amount allowed for non-medical marijuana patients to possess.
  • Out of state residents will be limited to purchasing a quarter ounce of marijuana at a time.
  • All recreational marijuana must be sold in child-resistant packages with labels specifying the potency of the strain.
  • The state will impose serving size limits on edible marijuana products.
  • The state’s voters will have the final say on marijuana taxes. A proposed 15% excise tax and 10% sales tax will appear on the November 2013 ballot.

Some of the things that Colorado’s marijuana laws will not allow:

  • Public use of marijuana will continue to be banned.
  • Smoking marijuana in bars will not be allowed.
  • Amsterdam-style “coffee shops”, or other business that allow consumption of marijuana on-site, are not allowed.
  • Incorporated marijuana collective gardens will be banned.
  • Marijuana related magazines, such as High Times and Nuggs, will be required to be kept behind the counter with the pornographic magazines at retail stores that allow minors under 21 (such as convenience stores).
  • Driving under the influence of marijuana is now prohibited in Colorado. Drivers with 5 nanograms or more of THC per milliliter of blood will be considered too high to drive.

Once Governor John Hickenlooper signs the bills, the first retail marijuana shops are expected to open around January 1, 2014.