Select Committee Committee on Amendment 64 Implementation Committee (03/15/2013)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON AMENDMENT 64 IMPLEMENTATION COMMITTEE

Date:	03/15/2013	ATTENDANCE

Time:	01:51 PM to 06:13 PM	Baumgardner	X
		DelGrosso	X
Place:	SupCt	Marble	X
		May	X
This Meeting was called to order by		Nordberg	X
	Representative Pabon	Schwartz	X
		Singer	X
This Report was prepared by		Ulibarri	*
	Kelli Kelty	Jahn	X
		Pabon	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Opening Comments Overview of the Work of the Amendment 64 Task Force		Witness Testimony and/or Committee Discussion Only Recommendation(s) Approved

01:52 PM -- Opening Comments

Representative Pabon, chair, called the meeting to order. A quorum was present. Representative Pabon gave a brief overview of the charge of the committee. He noted that each of the members received a binder with information concerning Amendment 64 and the final report of the Amendment 64 Task Force. Representative Pabon discussed the agenda for the meeting. He noted that he, Senator Jahn, Senator Marble, and Representative Nordberg were all members of the task force.

01:56 PM -- Overview of the Work of the Amendment 64 Task Force

Ms. Barbara Brohl, Executive Director of the Colorado Department of Revenue (DOR), introduced herself to the committee. She noted that she was the co-chair of the Amendment 64 Task Force. Director Brohl discussed the charge of the task force and said that page 11 of the final report provides a list of the task force membership. She gave a brief overview of the working groups of the task force and the establishment of guiding principles for the work of the task force. She said that the working groups analyzed all of the issues and referred the committee to Appendix E of the final report (page 129) for a list of the issues that were addressed by the working groups. She commented on the careful consideration of the working groups, including public testimony. She said that the recommendations of the task force were consolidated into 58 recommendations. She referred the committee to the Table of Contents and said that the 58 recommendations were broken up into 17 issue area groups. She commented on the process of developing the recommendations and the need for synergy within the working groups. She noted that there were some recommendations that did not receive consensus or agreement and that those issues were listed as "issues for further consideration" in the final report. She stressed the desire for consensus when developing and finalizing the recommendations. She gave a brief overview of the layout of the final report.

02:12 PM

Representative Pabon asked Director Brohl to comment on federal law and how Amendment 64 would operate in relation to federal law. Director Brohl said that the federal government has three primary concerns or requirements: to create a robust regulatory scheme, ensure that diversion does not occur (not allow it to go out of state), and keep it out of the hands of children.

02:15 PM

Representative Pabon asked Director Brohl to comment on the timeline of the work of the task force. Director Brohl said that the timelines for the task force were set forth by Amendment 64. She briefly discussed the responsibilities of DOR under Amendment 64 concerning rules and regulations and dates for such actions to be completed.

02:18 PM

Representative Pabon asked what would happen if the General Assembly was not able to establish statutory authority via legislation. Director Brohl said that Amendment 64 requires the DOR to promulgate rules by July 1, 2013 and that it is preferable to promulgate rules with guidance from the General Assembly.

02:19 PM

Representative Pabon asked Director Brohl to walk the committee through the Regulatory Framework recommendations. Director Brohl gave a brief background on Amendment 64 and the interplay between how state and local licensing occurs. She discussed the application process for licensing by the state. She discussed Recommendation 1.1, concerning adoption of the current 70/30 vertical integration model contained within the Medical Marijuana Code for adult-use marijuana. She said that vertical integration requires a common ownership between the grow and retail center or medical center, and allows for the manufacturer of infused products to have common ownership. She commented on concerns that were raised over the vertical integration model, including lack of competition and the creation of a monopoly.

02:28 PM

Representative Singer commented on the vertical integration model. He asked about votes in the working group on the vertical integration model. Director Brohl said that vertical integration was one of the recommendations that needed to be sent back down for consideration by the working group. She commented on discussion by the working group concerning the vertical integration model, including the possible adoption of a "hybrid" regulatory framework. She said that the working group sent two choices to the task force: an alternative regulatory model and the vertical integration model. Discussion ensued concerning the three-year sunset review and whether the business community had any input as to whether a three-year sunset would be effective for a regulatory framework.

02:38 PM

Director Brohl discussed Recommendation 1.2 of the regulatory framework, which recommends that the General Assembly not adopt legislation to allow or require a state-run distribution model.

02:39 PM

Director Brohl commented on Recommendation 1.3, which recommends adopting a law to recognize the authority of local governments to require a local license for any marijuana establishment as a legitimate type of "time, place, manner and number" regulation at the local level. Discussion ensued concerning state and local licensing.

02:47 PM

The committee took a brief recess.

04:00 PM

The committee came back to order. Representative Pabon commented on the rest of the schedule for the meeting. Director Brohl gave a brief overview of Recommendation 1.4, concerning converting the Medical Marijuana Enforcement Division into the Marijuana Enforcement Division. Representative May asked why the recommendation would use General Fund monies. Director Brohl gave a brief overview of Recommendation 5.1, concerning the transition of current medical marijuana licensees who desire to surrender their Medical Marijuana Center ("MMC") or Marijuana-infused Products ("MIP") licenses and corresponding optional premises cultivation ("OPC") licenses and apply for a Retail Marijuana Store ("RMS") license, Marijuana Product Manufacturing Facility ("MPMF") license and corresponding Marijuana Cultivation Facility ("MCF") license. Representative DelGrosso asked about the transition of licenses pursuant to the recommendation. Discussion ensued.

04:17 PM

Director Brohl continued to discuss Recommendations 5.1, 5.2, 5.3, 5.4, and 5.5, concerning Transition to the Amendment 64 Regulatory Environment.

04:21 PM

Representative Pabon commented on the organization of the recommendations in the final report. Director Brohl discussed Recommendation 4.1, concerning residency requirements for owners of licensed marijuana establishments. Representative DelGrosso asked for clarification of "ownership" pursuant to the recommendation. Director Brohl discussed Recommendation 4.2, concerning identifying persons prohibited as licensees. Representative DelGrosso asked if there is a prohibition to own a liquor store if the owner has a prior felony.

04:29 PM

Director Brohl discussed Recommendation 4.3, concerning authorizing DOR to establish a voluntary Responsible Marijuana Retailers program for owners of adult-use marijuana retail businesses and their employees, similar to the voluntary Responsible Vendor program currently in place for alcohol retailers. Senator Baumgardner asked about the advisory committee and whether DOR will determine membership or the General Assembly will appoint members.

04:31 PM

Director Brohl gave an overview of Recommendation 6.1, concerning requiring DOR to develop rules and regulations that ensure the safe transport of marijuana and marijuana products among and between licensed businesses and labs. She commented on Recommendation 6.2, concerning the disposal of marijuana products and waste, and Recommendation 7.1, concerning authorization of persons in Colorado to possess up to one ounce of marijuana. Senator Baumgardner expressed his concern about the provision of the recommendation concerning setting per-transaction purchase limits that are more restrictive for non-residents than for residents. Senator Jahn commented on Senator Baumgardner's concern. Representative DelGrosso commented on the recommendation and liability issues that may arise.

Representative Pabon opened the public testimony phase, and specified a two-minute limit per person.

04:47 PM -- Doug Robinson, Smart Colorado, came to the table with a panel of four others. He stated that there are many supporters and members of SMART Colorado in the audience. He referenced the SMART Colorado handout (Attachment A).

130315 AttachA.pdf

04:52 PM -- Dr. Christian Thurstone, representing SmartT Colorado, discussed substance treatment abuse issues around marijuana.

04:54 PM -- Arturo Ayala, representing Smart Colorado, expressed his concerns about the impact of marijuana on low-income neighborhoods which are home to a disproportionate number of minorities. He commented on federal law.

04:58 PM -- Dick Kaufman, representing Smart Colorado, commented on the taxation aspect of marijuana.

05:00 PM -- Gina Carbone, representing Smart Colorado, discussed her concerns about the commercialization of marijuana. Discussion ensued concerning issues around revenue.

05:03 PM

The panel responded to questions from the committee on marijuana use by adolescents and young adults. The panel discussed decriminalizing marijuana use and expressed concerns with commercialization. Dr. Thurstone commented on the issue of commercialization.

05:08 PM -- Mike Elliott, representing the Medical Marijuana Industry Group (MMIG), distributed handouts to the committee(Attachment B). He said that teen marijuana usage is decreasing, and that studies show that suicide rates fall and traffic fatalities decrease when states legalize medical marijuana.

130315 AttachB.pdf

05:10 PM -- Robert Chase, representing the Colorado Coalition for Patients and Caregivers, discussed the Controlled Substances Act.

05:13 PM -- Bob Doyle, representing the Colorado Tobacco Education and Prevention Alliance, said that the state interest needs to remain reducing drug use for state health. A handout was distributed to the committee (Attachment C).

130315 AttachC.pdf

05:17 PM -- Eleanor Scott, representing the Westminster Community Awareness Action Team (CAAT), discussed students' perspectives on the new legislation. She stated that marijuana has become more acceptable because of medical use and Amendment 64.

05:19 PM -- Jessica LaRouz, representing herself, commented on the conversion of medical marijuana to recreational and the separation of products from a permitting perspective.

05:22 PM -- Mark Belkin, Director of the United Food & Commercial Workers Union Local 7, commented on food processing, retail, health care and agriculture. He proposed the following concerning licensing: avoid exploitation and authorize a conditional use permit.

05:25 PM -- Renee Womack, representing herself, expressed her desire for the most conservative regulatory framework. She commented on health issues in multi-dwelling units and air quality issues.

05:29 PM -- Jason Warf, representing the Colorado Springs Medical Cannibis Council, spoke against vertical integration. Mr. Warf responded to question from the committee.

05:32 PM -- Wendi Chamberlain, representing Smart Colorado, said that the task force was overpowered by pro-marijuana advocates who did not consider youth. A handout was distributed to the committee (Attachment D). She commented on the privatization of profit and the socialization of costs.

130315 AttachD.pdf

05:35 PM -- Chris Maj, representing the Republican Liberty Caucus, commented on the need to allow business diversity and hybridization.

05:38 PM -- Nick LoVuolo, representing himself, said that vertical integration is flawed, virtually and physically.

05:41 PM -- Cheri Hackett, representing Associated Cannibis Trades, commented on issues of dual licensing.

05:43 PM -- Robert Corry Jr., representing himself, stated he was a co-drafter of Amendment 64. He commented on industrial hemp and the 15 percent excise tax. He said that these are the two issues where the General Assembly should act. He said that vertical integration will disallow an excise tax and will result in a loss of school capital revenue.

05:47 PM

Public testimony was closed. Representative Pabon discussed the work of the committee. He commented that the committee is focusing on the regulatory framework recommendations first because this order will determine many things downstream. Representative Pabon expressed an interest in gauging desire to include any of the recommendations that the committee discussed: Series 1, 4, 5, 6, 7.1 in draft legislation. He said that rather than take a formal vote, at this point, the committee would discuss all but 1.1, Vertical Integration, which warrants more discussion.

Representative Pabon asked if there was further committee discussion concerning the state-run model, Recommendation 1.2. There was no further discussion by the committee.


BILL:	Overview of the Amd64 Task Force
TIME:	05:52:21 PM
MOVED:	DelGrosso
MOTION:	Recommend that the Office of Legislative Legal Services (OLLS) not include Recommendation 1.2 in draft legislation. The motion passed on a vote of 7-0, with 3 excused.
SECONDED:	Singer
		VOTE
	Baumgardner	Excused
	DelGrosso	Yes
	Marble	Yes
	May	Yes
	Nordberg	Yes
	Schwartz	Excused
	Singer	Yes
	Ulibarri	Excused
	Jahn	Yes
	Pabon	Yes

YES: 7 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS


BILL:	Overview of the Amd64 Task Force
TIME:	05:55:49 PM
MOVED:	Jahn
MOTION:	Recommend that the Office of Legislative Legal Services (OLLS) include Recommendation 1.3 in draft legislation. The motion passed on a vote of 7-0, with 3 excused.
SECONDED:	Singer
		VOTE
	Baumgardner	Excused
	DelGrosso	Yes
	Marble	Yes
	May	Yes
	Nordberg	Yes
	Schwartz	Excused
	Singer	Yes
	Ulibarri	Excused
	Jahn	Yes
	Pabon	Yes

YES: 7 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS


BILL:	Overview of the Amd64 Task Force
TIME:	05:57:28 PM
MOVED:	DelGrosso
MOTION:	Recommend that the Office of Legislative Legal Services (OLLS) include Recommendation 1.4 in draft legislation. The motion passed on a vote of 7-0, with 3 excused.
SECONDED:	Singer
		VOTE
	Baumgardner	Excused
	DelGrosso	Yes
	Marble	Yes
	May	Yes
	Nordberg	Yes
	Schwartz	Excused
	Singer	Yes
	Ulibarri	Excused
	Jahn	Yes
	Pabon	Yes

YES: 7 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS

05:58 PM

Representative Pabon laid over discussion and consideration of sections 4.1, 4.2 and 4.3 of the task force recommendations.


BILL:	Overview of the Amd64 Task Force
TIME:	06:03:53 PM
MOVED:	DelGrosso
MOTION:	Recommend that the Office of Legislative Legal Services (OLLS) include Recommendation 6.1 in draft legislation. The motion passed on a vote of 7-0, with 3 excused.
SECONDED:	May
		VOTE
	Baumgardner	Excused
	DelGrosso	Yes
	Marble	Yes
	May	Yes
	Nordberg	Yes
	Schwartz	Excused
	Singer	Yes
	Ulibarri	Excused
	Jahn	Yes
	Pabon	Yes

YES: 7 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS


BILL:	Overview of the Amd64 Task Force
TIME:	06:04:55 PM
MOVED:	May
MOTION:	Recommend that the Office of Legislative Legal Services (OLLS) include Recommendation 6.2 in draft legislation. The motion passed on a vote of 7-0, with 3 excused.
SECONDED:	Singer
		VOTE
	Baumgardner	Excused
	DelGrosso	Yes
	Marble	Yes
	May	Yes
	Nordberg	Yes
	Schwartz	Excused
	Singer	Yes
	Ulibarri	Excused
	Jahn	Yes
	Pabon	Yes

YES: 7 NO: 0 EXC: 3 ABS: 0 FINAL ACTION: PASS

06:06 PM

The committee laid over discussion and consideration of the following recommendations: 1.1, 4.1, 4.2, 4.3, 5.1, 5.2, 5.3, 5.4, 5.5, and 7.1. Representative Pabon discussed the committee agenda. He said that the committee will continue to discuss regulatory framework recommendations at the next meeting, and that criminal law could be the next in the natural order. Committee discussion of the calendar, timeline, and concerns about a special session ensued.

06:13 PM

The committee adjourned.