DEADLINE PROMPTS NEW DISPENSARY APPLICATIONS

Multiple parties seeking to enter the medical marijuana business in
Aspen filed paperwork for sales tax licenses Wednesday in order to
comply with a state deadline.

State laws passed this spring by the Legislature place a moratorium on
new dispensaries that aren't already established or don't have an
application in the pipeline before today.

Aspen currently has four operating dispensaries, which sprung up last
summer. It was not clear Wednesday night how many more had applied
before the deadline, but local attorney Lauren Maytin confirmed that
the deadline prompted activity.

Other facets of the new laws require all dispensaries to apply by Aug.
1 for a license through the state and pay a licensing fee that begins
at $7,500 for the first 300 patients. The license could cost as much
as $18,000, depending on the amount of products offered and the number
of patients. As part of the licensing process, every individual
working at or owning a dispensary must submit to a background check.
Anyone with a felony drug conviction will be prohibited from
participating in the medical marijuana business. Other felony
convictions will not bar a person from being in the medical marijuana
business.

By Sept. 1, 70 percent of the marijuana sold at a dispensary must come
from the dispensary itself or a licensed off-site growing operation
that is connected to the dispensary.

While the new regulations represent a "hurdle" for owners, "patients'
rights are essentially the same," Ute City Medicinals owner Brett
Nelson said.

The licensing fees represent an upfront cost to establish a new
regulatory framework. The Colorado Department of Revenue is hiring at
least 10 new enforcement officers to deal with dispensaries, Nelson
said, adding that he is expecting "10 times" more regulation.

The new regulations also apply to medical marijuana growers, some of
whom currently enjoy selling to multiple dispensaries. The law limits
how many dispensaries independent growers can have as clients. While
the new regulations will push many small-time growers out of business,
"the quality control will be through the roof" for the remaining
operations, Nelson said.

Some observers believe that between 30 percent and 50 percent of the
estimated 1,100 dispensaries in Colorado won't survive the new
regulations. However, Maytin, who has been "slammed" with local and
statewide medical marijuana clients, said "it's all guesswork" in
terms of the effects of the new regulations.

Chad Carlos, co-owner of local dispensary L.E.A.F., said the
regulations are "respected," but they will lead to a greater
corporatization of the medical marijuana business, which he said is
unfortunate. Many independent suppliers will go out of business, he
said.

"It's upsetting to see," Carlos said.

The new state laws give cities the power to ban dispensaries
altogether, or set up more stringent regulatory frameworks for their
operations in their jurisdictions.

"There has been no indication that [City Council] wants us to pursue
any of those options," city of Aspen Community Development Director
Chris Bendon said, adding that dispensaries, which are classified in
Aspen as both pharmacy and retail, are subject to the same zoning
codes as any other business. "For the time being, it's just business
as usual."

In the future, the city might consider amending its land-use code to
allow for commercial marijuana growing operations in more areas in
town, Bendon said. Such an agricultural use is currently allowed only
in limited areas.