Colorado Lawmakers Establish Regulated Marijuana Market for Adults

marijuana bud and joint

DENVER, CO — On the final day of their legislative session, the Colorado legislature made history Wednesday by passing the first bills nationwide to establish a regulated marijuana market for adults.  The legislature was charged with doing so when voters approved the marijuana legalization Amendment 64 last November.

In addition to passing and sending to the governor a bill to regulate the recreational cannabis market in Colorado, the legislature also passed a bill to establish what will become the first tax ever collected on commercial sales of marijuana purchased for recreational use in the United States.

Two other bills were passed by the legislature this week relating to marijuana: one that would establish a driving impairment standard, and another which treats marijuana magazines, such as High Times and Nuggs, as pornography, requiring them to be kept behind the counter at retail stores.

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, even if signed by the Governor.  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.

Jeff Dorschner, spokesman for the U.S. Attorney’s Office in Denver, released a statement following the legislative action stating that federal authorities were monitoring Colorado’s marijuana legalization legislation.

“The Department of Justice is taking into consideration all aspects of this issue in both Colorado and Washington as part of its decision-making process regarding what response the federal government should have to the legalization initiatives in the two states,” the statement said.

Under Amendment 64, personal possession of up to one ounce (28 grams) of marijuana is legal for anyone  21 years of age or older, and personal cultivation of cannabis is allowed, limited to six plants per person.

On the down side, the legislature approved another bill Tuesday, House Bill 1325, which would set a level of THC in the blood above which drivers would be presumed to be impaired. Drivers with 5 milligrams or more of THC per milliliter of blood would be considered to be impaired, but could challenge that presumption in court.

Amendment 64 also directed the legislature to create regulations for the cultivation, processing, and distribution of industrial hemp. A bill initiating the development of a regulatory framework for industrial hemp, SB 241, was adopted Monday.

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 milligrams or more of THC per milliliter of blood will be considered too high to drive.

Democratic Governor John Hickenlooper is expected to sign all four bills, and the first retail marijuana shops are expected to open around January 1, 2014.