BUDDING BUSINESS TAKES OFF

It's not a good time to be a banker or a home builder, but business is
booming for the growers and sellers of medicinal marijuana in Colorado
Springs.

At least 50 dispensaries have opened there in the past year, with more
waiting in the wings as the city ponders a proposed ordinance to
regulate the business -- and make money for city coffers.

Wynetta Massey, deputy city attorney, said she's wading in territory
she never dreamed of exploring as a law school student, but she and
government leaders want to follow the constitutional amendment passed
by voters in 2000, while also trying to make sure patients' rights are
protected but illegal marijuana growers and sellers aren't.

"It's kind of an odd place to be," Massey said.

"If you really want to honor what's in that amendment, your hands are
kind of tied. Had the state health department and the Legislature been
more proactive, we wouldn't have all these questions right now. Or
maybe we'd have different questions. No one's happy right now. The
(city) council's not happy. The district attorney's not happy. No one
is sure how to handle this. It's in flux."

Massey said the council instructed her and other legal staff last fall
to draft ordinances that would regulate where dispensaries can be
located, along with signage issues and the licensing and taxing of
growing and retail operations.

Research conducted before the idea of local ordinances was introduced
found that, based on a projected 4,500 Springs residents on the
state's patient registry by year's end, the city could collect more
than $1.6 million on dispensary sales alone this year if all known
dispensaries were licensed and paying sales taxes.

(Those figures are based on an average price of $350 for an ounce of
dispensary marijuana and estimated citywide monthly sales of more than
$3.9 million, taxed at 3.5 percent. They don't include a proposed
annual licensing fee of $1,000.)

"We're keeping a close eye on the bills the Legislature is considering
regarding medical marijuana," Massey explained.

What isn't clear now is "at what point a caregiver becomes a
dispensary," for instance.

"Nobody has a good idea of what that is. The amendment talks about the
patient, who may or may not nominate a caregiver. How many patients a
caregiver can provide care to is unclear in the amendment. Do you
limit the number?

"Obviously, a patient can grow a specified number of plants, and if
incapable, the caregiver can provide that service. But the amendment
doesn't talk about sales, or what has been referred to as grow
operations. They aren't even mentioned in the amendment," Massey said.

So, she and her staff are working with a council-appointed task force
in an attempt to come up with answers that make sense for Colorado
Springs but don't conflict with existing or proposed state law.

The group's recommendations are due in March, with hopes of ordinances
governing location and licensing of dispensaries in place by summer,
following a series of public hearings on whatever proposals meet
preliminary approval.

"Council made it clear they don't want us to dawdle, but they also
want to make sure we're in compliance with whatever the state passes.
We've got a lot of carts and a lot of horses," she said. "Our main
concern is coming up with a definition of a legal land use, and how to
license these operations. It's not easy."

Medical Marijuana Fast Facts

* Colorado voters passed Amendment 20, legalizing marijuana for
medical purposes, in 2000.

* As of Sept. 30, 2009, there were 17,346 patients -- 256 of them in
Pueblo County -- who were legally registered with the state to buy and
use medical marijuana.

* The average age of all patients certified to the registry since it
began operating in 2001 is 40, with eight patients younger than 18.

* 73 percent of patients are male, with an average age of 29; 27
percent are female, with an average age of 42.

* Only 24 applications have been denied, and 21 registration cards
have been revoked.

* 2,054 registration cards have expired.

* More than 800 doctors have signed patient applications to join the
registry, but state health department officials say a much smaller
number signed for the majority of all applicants.

* Ninety percent, or 15,654 of patients statewide, listed severe pain
as their reason for seeking medical marijuana. Thirty percent cited
muscle spasms and 21 percent severe nausea. The remainder of patients
sought marijuana to treat the side effects of cancer treatment,
wasting syndrome related to AIDS or other AIDS symptoms, glaucoma and
seizures, according to data gleaned from applications to the state
registry.

* There are no state or local laws regarding the operation of medical
marijuana dispensaries or growing operations. The state Legislature is
considering two bills: One would more strictly regulate the process
for inclusion on the patient registry and the other would regulate
dispensaries and growers.

* Colorado Springs, where at least 50 dispensaries are openly doing
business, is working on city ordinances to license and regulate the
location and, to some degree, the operation of dispensaries and
growers, and collect sales tax on both.

* Colorado Springs estimates it could collect $1.6 million in sales
tax from dispensaries and growers this year if all such businesses
were licensed.

* There is a moratorium on dispensaries in the city of Pueblo, where
the opening of one dispensary has been indefinitely postponed. The
county's moratorium, which expired last week, has been extended to
July 2.

* There are three medical marijuana dispensaries doing business in
Pueblo West, and another business that offers twice-monthly "clinics"
with doctors who sign off on applications for inclusion on the state
registry of certified medical marijuana users. The clinic operates in
rented space at another Pueblo West business.