MARIJUANA DISPENSARY OWNERS SAY STATE LAW IS UNCONSTITUTIONAL

LONGMONT -- If House Bill 1284 puts Larry Hill out of business, he
has a back-up plan.

"Personally, I'm 63 years old. I'm going fishing," the medical
marijuana dispensary owner said with a smile.

But Hill's humor belies a real fear: that new state regulations --
and more to come -- will wipe out Colorado's medical marijuana
industry or drive it back into the shadows. Which, some say, was
lawmakers' intention.

"They are going to accomplish one thing: They are going to accomplish
putting medical marijuana underground," Hill said.

Hill, whose dispensary on Coffman Street was the first in Longmont
when it opened in February 2009, got into the business for the
medical attributes of cannabis, not money. But, he said, that's what
state lawmakers made HB 1284 about.

"Reading the bill, the whole thing makes me sick, because they are
putting money over health," he said.

He added wryly, "I don't understand (the bill) any more than the
people who wrote it."

HB 1284, which state legislators passed this month, creates a state
licensing authority to enact regulations governing medical marijuana
facilities.

Most of the regulations in the bill (which Gov. Bill Ritter has yet
to sign, although he has said he will) don't take effect until July
1, 2011.

The bill also leaves the nuts and bolts of licensing up to the
Colorado Department of Revenue -- so those details are still up in
the air.

The bill, however, specifically gives local governments the authority
to ban dispensaries, a decision that a city council or town board can
make or can refer to voters.

And that is one of several pieces of the new law that could bring
legal and constitutional challenges, said Boulder attorney Craig
Small, who focuses on medical marijuana business development.

No existing dispensaries are "grandfathered" under the new law; they
have to apply for state and, if necessary, local licenses no matter
how long they have been in business.

If a municipality were to ban dispensaries, it could be on par with
government taking private property without compensation, Small said.

"They were issued a license; there's some protection with that
license," he said. "To have the government snatch it back, that might
be a taking (of property)."

Small said Sen. Chris Romer, who sponsored the bill, is on record
saying he was crafting the law to shut down 80 percent of
dispensaries in the state.

"It's going to be very, very expensive, difficult, and these
timelines are onerous," Small said of the bill.

By July 1, dispensaries need to have a license from a local
authority. For example, the eight dispensaries in Longmont that
already are open can continue to do business under HB 1284.

But anybody else who applied to the city to open a dispensary has to
get approval by July 1. Because most cities and towns don't yet have
local regulations in place -- or have active moratoriums on new
dispensaries -- it essentially prohibits any new dispensaries from
opening.

"By nature of the laws in conjunction, no one is going to be able to
get any licenses in time," Small said.

The bill also requires dispensaries to apply to the state for a
license by Aug. 1. But as of yet, the state hasn't created a
licensing authority; therefore, the licensing authority doesn't have
an application process, Small said.

Colorado Springs attorney Clifton Black summed it up best when he
said that "we're going to have to fill out forms that don't exist,
created by an agency that doesn't exist," Small paraphrased.

And by Sept. 1, each medical marijuana center must prove that it is
growing 70 percent of the product it sells -- a requirement that
could present another constitutional challenge, Small said.

"(A law) still needs to have a rational basis, and we can't figure
out a rational basis for that one," he said. "It seems completely
arbitrary."

Another possible constitutional issue is the requirement that a
person must have lived in the state for two years to qualify for a
medical marijuana center license, Small said.

Still, he said, there are good points to the law. Before, under
Amendment 20, patients and caregivers were protected. Now, HB 1284
"creates levels of protection among everyone on the distribution
chain," he said.

Brad Hensen, who opened Dacono Meds LLC in Dacono on Nov. 1, said
that at least the bill allows banks and credit unions to do business
with dispensaries. Banks often won't work with dispensaries because
marijuana still is illegal under federal law.

But other than that, Hensen said, HB 1284 likely will succeed in
putting most dispensaries out of business.

"The fees could be tens of thousands of dollars. They could be
$50,000," he said.

In the meantime, "We'll just take it day by day; we have hoops and
hurdles every day and every week."

Hill also fears HB 1284 -- and whatever regulations the Department of
Revenue eventually comes up with -- will put him out of business.

The fee for a state medical marijuana license has yet to be set, but
Hill has heard big numbers tossed around, even as much as $50,000.

"I am not one of the big guys with a lot of money," he
said.

Small said the bill will drive the "mom-and-pop shops" out of
business because they don't have the capital, and there will be a
push toward "Wal-Mart" types of dispensaries."

Ed Bruder, owner of Colorado Care and Wellness in Lyons, said the
entire bill seems "pretty unconstitutional."

"I think it goes against the intent of Amendment 20, which allows
patients safe access to medicine," said Bruder, who also was elected
to the Lyons Town Board of Trustees in April.

Bruder said there should be regulations that set quality standards
for medicinal marijuana to ensure patients' safety.

But patients are hardly mentioned in HB 1284, which is mostly about
money, he said -- underscored by the fact that Amendment 20 gave
oversight to the state health department and HB 1284 hands it over to
the department of revenue.

"They've figured out pretty much every way to put all but the people
with the deepest pockets out of business," Bruder said.

One benefit of the whole process, Hill said, is that the general
public is being educated about medical marijuana and more people are
researching the medical attributes of cannabis.

As such, Hill said, if the voting public of Longmont doesn't want
dispensaries in the city, he'll accept that -- but it should be up to
residents, "not a few good men ... and women."

"If the city (council) decides to ban dispensaries, I would be very
bitter," Hill said. "If the city left it to voters, and the voters
decide they don't want dispensaries, I would walk away with a smile
and a handshake."