Select Committee Committee on Amendment 64 Implementation Committee (03/21/2013)

Final
STAFF SUMMARY OF MEETING

COMMITTEE ON AMENDMENT 64 IMPLEMENTATION COMMITTEE

Date:	03/21/2013	ATTENDANCE

Time:	07:35 AM to 08:59 AM	Baumgardner	X
		DelGrosso	X
Place:	SCR 356	Marble	X
		May	X
This Meeting was called to order by		Nordberg	X
	Representative Pabon	Schwartz	X
		Singer	*
This Report was prepared by		Ulibarri	X
	Erin Vanderberg	Jahn	*
		Pabon	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Discussion on A64 Task Force Recommendations		Committee Discussion Only

07:35 AM -- Discussion on A64 Task Force Recommendations

Representative Pabon, chair, called the meeting to order. A quorum was present. Representative Pabon discussed the work of the previous committee meeting on Friday, March 15. He stated that five recommendations from the final report of the task force were voted on as written and passed with unanimous support: 1.2, 1.3, 1.4, 6.1, and 6.2. The vote was to recommend that the Office of Legislative Legal Services (OLLS) include this language in draft legislation. Representative Pabon stated that the balance of the regulatory framework recommendations were left to consider in this and subsequent meetings. He explained that these recommendations are for action only, and that no public testimony would be taken by the committee during this meeting.

07:40 AM

Representative Pabon opened discussion on Recommendation 1.1 - Vertical Integration. Representative Pabon discussed the background and provided an overview of Recommendation 1.1.

07:50 AM

Committee discussion ensued on Recommendation 1.1. Senator Schwartz discussed issues related to the cultivation of marijuana. Senator Ulibarri discussed types of licenses, the constitutional language of Amendment 64, and whether that language allows vertical integration. Committee discussion ensued on the vertical integration model and the issue of monopolies. Discussion moved briefly to Recommendation 17.1, which recommends that the Task Force meet again in three years, and whether one year would be more appropriate. The committee discussed the issue of lawful selling.

08:00 AM

Representative DelGrosso discussed the issue of the regulatory timeframe. He suggested a 90-day moratorium on new licenses rather than one year, and committee discussion ensued on the licensing burden at the Department of Revenue (DOR) and potential issues and solutions there. Discussion moved to the 5-Series of recommendations: Transition to the Amendment 64 Regulatory Environment. The committee discussed federal intervention and local control. Representative Singer asked members of the task force to discuss previous task force discussion around the cultivator-retail relationship and whether the 5-Series of recommendations may unintentionally create a black market.

08:10 AM

Senator Jahn and Representative Pabon responded to questions on the vertical integration model. They stated that vertical integration represented the task force's best thinking, after considerable time and debate. Committee members discussed variations on the 70/30 model. The committee discussed excise taxation.

08:20 AM

Discussion of the excise tax continued. Members of the committee who sat on the task force discussed the excise tax's application to the retail percentage, the recommended escalator (pursuant to Recommendation 3.3), and the issue of excise tax going to a public vote. Representative Pabon noted the interconnectedness of the recommendations.

08:30 AM

The committee submitted to a straw poll on the issue of the 70/30 split (first paragraph of Recommendation 1.1), which had the majority in support. Another poll was taken on monthly reporting requirements (first bullet point of Recommendation 1.1), which had the majority in support. Discussion continued on the idea of conditional licenses, where the state could approve when localities did not. Representative DelGrosso discussed the idea of providing for initial local approval to help DOR with the potential large volume of applications.

08:36 AM -- Kevin Bommer, of the Colorado Municipal League (CML) and a task force member, was brought to the table to answer questions from the committee on local control. Mr. Bommer stated that Amendment 64 clearly states that the application is made at the state level and half the fee is to be forwarded to the local governments. He commented that this was an efficiency measure to ensure that the license gets to local government as soon as possible, and provided an example. Mr. Bommer responded to questions from the committee on licensing criteria, which he stated will be part of the rule-making process subsequent to legislative implementation. Mr. Bommer discussed the different areas of focus that the state and local governments will have on licensing.

08:42 AM

The committee submitted to a straw poll on the issue of state and local licensing (second bullet point of Recommendation 1.1), which had unanimous support. Representative Pabon laid over Recommendation 1.1. Discussion began on the 4-Series of recommendations: Licensee Requirements. Committee discussion ensued on the residency requirement. In response, Representative Pabon stated that these requirements came from the medical marijuana regulations and that these residency requirements are a public safety measure, designed to discourage out-of-state residents from moving to Colorado to take part in this business. A vote on Recommendation 4.1 was laid over.

08:51 AM

The committee discussed Recommendation 4.2. The issue of the lifetime ban on marijuana industry involvement for felons was discussed. Senator Marble stated that informed discussion should continue once the committee had the facts around felony offenses. Senator Schwartz stated that there could be other related crimes that might be an indicator of potential marijuana industry misuse.

08:59 AM

The committee adjourned.