Marijuana Sales Tax Revenues (08/28/2014)

Final
STAFF SUMMARY OF MEETING

MARIJUANA SALES TAX REVENUES

Date:	08/28/2014	ATTENDANCE

Time:	09:32 AM to 01:26 PM	Adams	*
		Aguilar	*
Place:	HCR 0112	Anderle	E
		Baumgardner	X
This Meeting was called to order by		Blake	X
	Representative Pabon	Bommer	X
		Connors	X
This Report was prepared by		Dore	*
	Bill Zepernick	Federspiel	X
		Freedman	E
		Martinez	*
		Massey	X
		McGowan	X
		Pace	X
		Raynes	E
		Schut	X
		Sills	X
		Singer	X
		Vasquez	X
		Jahn	X
		Pabon	X

		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
CDPHE Presentation Youth Prevention Initiatives Law Enforcement Issues Public Comment		Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only Witness Testimony and/or Committee Discussion Only

09:32 AM -- Call to Order

Representative Pabon, Chair, called the meeting to order. He made some opening comments and directed members of the public towards the committee webpage should anyone wish to access materials related to the committee.

09:36 AM -- Update from CDPHE on Medical Marijuana Issues and Public Awareness Campaign

Karin McGowan, Deputy Executive Director, Ali Maffey, Policy and Communication Unit Supervisor, Dana Erpelding, Director of the Center for Health and Environmental Data, and Natalie Riggins, Program Manager for the Medical Marijuana Registry, from the Colorado Department of Public Health and the Environment (CDPHE) came to the table to present on issues surrounding medical marijuana and the department's marijuana prevention public awareness campaign. CDPHE's presentation was distributed to the committee (Attachment A). Ms. Erpelding provided the committee with a history of the medical marijuana program in the state. She responded to questions on the enforcement of caregiver registration and penalties for not registering, how caregiver registration aligns with Department of Revenue (DOR) registration, and the eligibility requirements for a medical marijuana card. The representatives of the CDPHE responded to questions on the levels of pain required for a medical marijuana card issued for "severe pain," whether CDPHE is keeping track of doctors prescribing medical marijuana cards and how many cards each doctor issues, the breakdown of the types of pain that patients receive cards for, the departments upcoming requests for rule making, and how many patients moved from pharmaceutical medications to medical marijuana after it was legalized.

Attachment A.pdf

09:54 AM

The CDPHE representatives responded to further questions on the geographical movement of patients within the state to access particular physicians, the length of time that a patient can use a red card for before renewing it and how this relates to different medical conditions, whether there is a risk of caregivers growing marijuana for profit under the medical marijuana system, the regulation of medical marijuana within the state, the age limits for receiving a medical marijuana card, and caregiver recovery of costs for growing marijuana on behalf of medical marijuana patients.

10:03 AM

The committee discussed its charge, the interrelation of medical marijuana with retail marijuana, and the tax collections for medical and retail marijuana. The representatives of CDPHE responded to further questions on the regulation of caregivers and the criteria that CDPHE has for referring physicians to the Board of Medical Examiners.

10:10 AM

Ms. Erpelding spoke to the number of active medical marijuana patients in the state, the demographics of these patients, and how patients obtain medical marijuana. She responded to questions on marijuana users growing their own product following Amendment 64, if CDPHE has a system in place to prevent patients from going to multiple caregivers, and if there is data available on the number of patients replacing opioids with marijuana. Discussion on these topics ensued.

10:19 AM

Ms. Erpelding discussed the number of patients who have been authorized to have an increased plant count by their physicians, and responded to questions on whether the statutes prevent the state from implementing an upper limit on plant count, how higher plant count subscriptions are monitored and regulated, and what the average and extreme numbers are for extended plant counts.

10:26 AM

Ms. Erpelding discussed the geographical spread of caregivers in the state and the rule change requests that CDPHE is planning to bring before the Colorado Board of Health for rule making.

10:30 AM

Ms. Maffey presented on CDPHE's Public Awareness Campaign for retail marijuana, and stated that the charge of the department for this is to promote safe, legal, and responsible use of retail marijuana in the state. She described the program's five main components, (pages 9-12 of Attachment A) which include an 18-month campaign on the health effects of marijuana and its legal use, an ongoing education and prevention campaign focusing on specific groups, maintenance of a website portal, alignment of messages across state agencies, and an evaluation of the campaigns as they progress.

She responded to questions on whether there is an advisory board overseeing the efforts of the department in its public awareness campaign, the education efforts being made to prevent retailers from selling to underage citizens and how much funding has been devoted to this effort, and if CDPHE was collaborating with the Office of Behavioral Health in its campaign.

10:41 AM

Ms. Maffey discussed the process for implementing the prevention and education campaign and distributed a handout on this (Attachment B). She also spoke to the Request For Proposal that the CDPHE had issued for the execution of elements of the campaign and responded to questions on the opportunities for using the education campaign on marijuana in the overall context of substance abuse. Representative Pabon discussed the ways in which the committee could help optimize the funds appropriated by Senate Bill 14-215. Ms. Maffey responded to questions on the department's standardized definitions of drug use.

Attachment B.pdf

10:50 AM

Ms. Maffey discussed the evaluation of the campaign that CDPHE would be performing. She also provided a financial breakdown of the campaign and responded to questions on whether its costs are congruent with other public awareness campaigns and the overall budget for the 18-month and ongoing campaigns and their evaluation. The representatives of CDPHE responded to questions on continuation funding to support the department's charge, if there is information available on how funding can be most effectively used to prevent youth use, the importance of CDPHE's public awareness campaign, and whether there will be ongoing prevention efforts in the future. The committee discussed the educational aspects of the campaign for parents in Colorado.

11:04 AM -- Youth Marijuana Prevention Initiatives

Sarah Mathew, Director of the Office of Health and Wellness for the Colorado Department of Education (CDE), Nancy Dolson, Special Financing Division Director of the Department of Healthcare Policy and Financing (HCPF), Greg Trollan, Programs Manager for HCPF, and Robert Werthwein, Office of Children, Youth, and Families in the Department of Human Services (DHS), came to the table to present on youth marijuana prevention initiatives within the state.

Ms. Mathew began her presentation (Attachment C) and stated that CDE received $2.5 million under Senate Bill 14-215, and that this funding is being used to establish a school health professional program related to marijuana. She said that CDE is collecting student-level school health data through the Healthy Kids Survey, in cooperation with DHS and CDPHE, and discussed the survey's findings regarding youth marijuana use. She stated that school nurses are the first responders in schools and that the survey results suggested increasing the number of school nurses should help reduce the likelihood that youths access and use marijuana.

Attachment C.pdf

Ms. Mathew responded to questions on how the funding will increase the number of health professionals within schools and how these resources will be distributed across the state. She stated that school nurse resources will increase by 40.0 FTE across the state, with preference given to districts that have been identified as lacking in appropriate resources. She stated that CDE did not cap the number of grants that school districts would be able to apply for, and that districts will be able to hire a nurse if they do not currently have one because of SB 14-215 funds.

11:12 AM

Ms. Mathews discussed the strong relationships that CDE had established with CDPHE, DHS, and HCPF and the data collection this cooperation was allowing the department to perform. She said that CDE was looking for a coordinated approach to include staff, students, parents, and the community. She responded to a question on which entities are eligible for funding from CDE under its school health professional program.

11:19 AM

The presenters began their discussion of programs in HCPF and handouts (Attachment D) on the School-based Substance Abuse Prevention and Intervention (SAPI) program and School-based Substance Use Disorder Prevention and Early Intervention Services though Behavioral Health Organization (BHOs) were distributed to the committee. Nancy Dolson discussed the SAPI program in HCPF, stating that the focus of the grants from SB 14-215 are for marijuana use but can also address prescription drug misuse and underage alcohol use. Ms. Dolson described the monthly reporting that grant recipients must adhere to. She responded to questions on Medicaid eligibility under the program, funding eligibility over time given that prevention services are lengthy engagements, and the overall amount of funding for the entire program being only $2 million. The committee discussed the need for future prevention funding.

Attachment D.pdf

11:28 AM

Greg Trollan explained to the committee how HCPF intends to spend the $2 million of funding for School-based Substance Use Disorder Prevention and Early Intervention Services by BHOs. He said that initially the funding will be allocated to school districts that have little or no existing behavioral health programming. He added that the department is looking for a federal match on the funding it had received.

11:32 AM

Robert Werthwein discussed how the $2 million in funding that DHS had received under SB 14-215 would be allocated across 20-25 new community service programs regarding marijuana use in the state. He stated that the department's goal is to have the funds distributed by October 1, 2014. Representative Singer discussed the use of other substances by students across school districts. Mr. Werthwein responded to questions on which areas in the state had not previously received services, whether the programs were new in scope, and if they would address other substances or just marijuana.

11:43 AM

The committee and panel discussed concerns surrounding serving only Medicaid-eligible students under marijuana prevention programs, identifying how the state needs to focus on substance abuse prevention on a statewide level and not just exclusively on the Medicaid-eligible population. Mr. Trollan noted that by targeting Medicaid recipients under its programs, HCPF may receive federal matching funds that increases overall funding.

11:48 AM -- Law Enforcement Issues

Marco Vasquez, Chief of Police for Erie, Colorado, John Jackson, Chief of Police for Greenwood Village and President of the Colorado Association of Chiefs of Police (CACP), and Marc Fleecs, Commander of the Denver Police Department, came to the table to present to the committee. A marijuana position paper from the CACP was distributed to the committee (Attachment E). Chief Vasquez began by discussing the issues that law enforcement has encountered since the legalization of marijuana. He stated that law enforcement's primary concerns have been public safety and civil matters, people driving under the influence, youth use, legal and illegal marijuana distribution, and diversion of marijuana out of the state. He said that Colorado police have also raised concerns with the Drug Enforcement Administration (DEA) and have been working collaboratively with state agencies in their efforts. He stated that the law enforcement community does not yet have a good sense of the frequency of people driving under the influence of marijuana.

Attachment E.pdf

11:57 AM

Chief Jackson discussed the Amendment 64 Task Force and the issues for law enforcement that have not yet been addressed within the state. He said that the legislature needs a way to address the civil liability that law enforcement officers could face when confiscating plants from what they deem to be illegal grow operations. He added that more advanced technology for the testing of marijuana intoxication is still needed within the state, and that current funding resources were not adequate to ensure robust public safety.

Chief Jackson directed the committee towards the CACP's position paper on marijuana within the state and discussed the differing needs for law enforcement funding. He also discussed the need for significant data collection efforts on a number of issues, such as the trafficking of marijuana into and out of the state.

12:12 PM

Marc Fleecs, Commander of the Denver Police Department, explained to the committee how his department had recently undertaken an investigation into the movement of marijuana into and out of the state via the United States Postal Service (USPS). He stated that it had confiscated over $250,000 worth of marijuana, which equates to roughly 85 pounds. He described how the training of officers to recognize individuals driving under the influence of marijuana had increased significantly since January 2014, as had his department's crime analysis work to understand the effects of marijuana on the local community. He discussed how efforts to measure the tetrahydrocannabinol (THC) levels in marijuana products were underway, but that they are expensive, time consuming processes for their crime lab. He responded to questions on why the department needs to test confiscated materials and measure THC levels, how Denver is spending its 3.8 percent local special sales tax on law enforcement, the confiscation of materials from USPS and other mailing services, the assistance the state is receiving from the federal government to assess marijuana products, the increase in law enforcement's workload since the legalization of marijuana, and what the state can do to help with data collection efforts to better understand the scope of marijuana law enforcement needs.

12:28 PM

Chief Vasquez highlighted his concerns regarding the state's medical marijuana caregiver model, marijuana divergences from the black market, and the funding of DUI testing. He responded to questions on the prioritized needs identified by CACP and oral fluid testing devices. Commissioner Pace expressed his concerns about homegrow operations and the loss of tax revenue that could be resulting from people growing their own marijuana. He asked how law enforcement makes the determination of what constitutes a legitimate homegrow operations. Chief Jackson replied that homegrow operations are complicated and challenging for law enforcement to address. He cited an example of a homegrow operation where a caregiver presented papers for legally growing up to 75 plants.

The law enforcement representatives responded to questions on what would constitute sufficient funding for their needs, whether or not law enforcement has reached out to the Board of Medical Examiners to express concerns about certain doctors liberally prescribing medical marijuana, and data collection for understanding the scope of trafficking through the USPS and if this increased after Amendment 64 was passed.

Mr. Bommer expressed concerns about marijuana enforcement being a statewide responsibility and about whether there is adequate funding for local law enforcement beyond revenue from special sales taxes. Mr. Bommer asked what data local law enforcement thinks they need and if there was a dollar amount that the state can provide to help this happen. Chief Vasquez cited the data collection efforts of Kevin Wong to help highlight the extent of the data collection gaps and needs. He stated that there needs to be a way to funnel local law enforcement data collection into a statewide system and that they are currently working to determine what the costs of such data collection efforts will be.

12:50 PM

Chief Jackson told the committee that law enforcement has created a comprehensive report to detail what funding and technology they need to properly address marijuana enforcement. The panel responded to questions on the increase in marijuana trafficking since legalization, whether the state should engage border states to assess the impacts of legalization, and whether the focus should be on the federal government and reclassifying marijuana. The committee discussed the importance of complying with federal banking laws. The panel responded to questions on safety and crime rate reduction.

01:00 PM

Representative Pabon discussed the importance of data collection in driving decisions about funding of law enforcement activities within the state. He said that there are valid concerns about the growth of the black market, diversion to out of state markets, but that we cannot currently quantify the extent of this problem because of a lack of data.

01:03 PM -- Public Comment

Mike Elliot, Executive Director of the Marijuana Industry Group, came to the table to testify. He stated that the group had not taken a formal position on Amendment 64 but that they did support Proposition AA. Mr. Elliot stated that one reason tax revenue is not as high as anticipated is because cities and counties have the option to opt out of allowing retail marijuana sales. He told the committee that the way we think about the black market needs to evolve given the legalization of marijuana, and that there has been a decrease in teen marijuana use since legalization.

01:09 PM

Teri Robnett, Executive Director of the Cannabis Patients Alliance, came to the table to testify. She expressed concern about medical marijuana patients being taxed heavily for their prescriptions, stating that there are misconceptions surrounding why people use medical marijuana and the law enforcement issues that exist. She told the committee that homegrow operations are becoming a much safer activity and that medical marijuana saves lives. She responded to questions about the CDPHE funding for research on medical marijuana efficacy.

01:15 PM

Marvin Ventrell, Program Coordinator of the Harmony Foundation, came to the table to testify. Mr. Ventrell expressed his organization's interest in helping with data collection, treatment programs, and other state needs surrounding substance abuse treatment.

01:18 PM

The committee discussed its next meeting on September 8 and how legislation can be formally requested. Bill Zepernick, Legislative Council Staff, came to the table to discuss this process. The committee discussed its charge and how it can make requests to the General Assembly for future legislative action.

01:25 PM

The committee was adjourned.