GOVERNMENTS SPLIT AUTHORITY

Local, State, Federal Laws Determine Who Regulates Medical Marijuana

Legislation that Colorado lawmakers passed this year has raised the
issue of whether local, state or federal governments should have
authority over medical marijuana.

When it comes to regulating medical marijuana dispensaries, the state
may hand down the rules, but Colorado towns and cities have the
ultimate say regarding whether dispensaries are allowed in city limits.

Regulation of the dispensaries is a dual licensing system that is a
shared responsibility between local governments and the state, said
Matt Cook, senior director of the Colorado Department of Revenue's
Enforcement Group. The revenue department is in charge of licensing
dispensaries under House Bill 1284, which the state Legislature passed
in May to address a legal gray area regarding dispensaries.

"Not one has more control than another," Cook said about state vs.
local governments. "Local government cannot issue a license without
our license, and the same is true in reverse. We cannot license a
center without a local license, nor would we want to. It is a
partnership, and the regulatory impacts are shared."

Local governments often deal with common policy decisions for
broad-based issues, Cook said.

"I wouldn't pretend to sit in my ivory tower and know what is going on
in Cortez," he said. "It is best to have local input."

Cortez City Manager Jay Harrington said the city's first step was to
regulate dispensaries through zoning authorities.

"One of the most successful parts of our first step was on the signage
side and not allowing marijuana or marijuana leaves, which is why,
when you look at a dispensary, it's hard to tell unless you know they
are there," Harrington said. "There is not a giant pot leaf on the
side of the building. If you go into Denver right now, it seems like
there are giant pot leaves on every corner."

HB 1284 opened a legal door for medical marijuana dispensaries to
operate in Colorado. The legislation required dispensaries to apply
for licenses from their local governments by July 1 and from the state
by Aug. 1. The state won't accept any new applications for
dispensaries until July 2011.

Though HB 1284 gives local governments the ability to ban
dispensaries, the city of Cortez is waiting for the state government
to adjust to the new medical marijuana regulations, Harrington said.

"The (city) council decided not to put it to a vote, whether they
should be (banned) or not," Harrington said. "They're pretty much set
through July of next year. We'll see where we align with the state."

Mancos Town Administrator Tom Yennerell said the Mancos Town Board
considered allowing the town's residents to ban medical marijuana
dispensaries, and Mancos even had a short moratorium on dispensaries
until the town board made a decision in March.

"We considered - in the future should we allow medical marijuana
centers or should we put it out to the voters," Yennerell said. "And
they (town board members) decided to not put it out to the voters and
to allow centers to locate here, provided that they conform to the
ordinance we set up prior to the state's adoption of regulations that
become effective July 1 (2011). Now ours may change based upon the new
legislation once rules get written, but at this point, the town is
allowing them."

Harrington said for Cortez, the most obvious issue was HB 1284's
requirement that dispensaries not be located within 1,000 feet of each
other. The city of Cortez has a 500-foot requirement. The city also
requires dispensaries be located at least 500 feet from a park. Parks
aren't included in state requirements.

"We need to decide if we're going to match up (with state
requirements) and, if so, how it would be implemented," he said.

Cook said the 1,000 foot requirement allows for the city's to set
their own distances, allowing both local governments and the state
power to regulate medical marijuana dispensaries.

"The state, under the new law (HB 1284), has the authority under the
Department of Revenue to regulate and inspect stores, but the
Legislature still preserves the option to have the city's own
regulations within its own parameters," he said.

Harrington said one aspect of regulation he is concerned with is
regulating caregivers.

"They think dispensaries are it, but there is this whole protected
group of caregivers who can have five patients which are not part of
this regulatory environment," he said. "Whether a city has a
dispensary, or not, medical marijuana is here."

According to the Colorado Department of Public Health and Environment,
regulations state a caregiver may serve up to five patients, with no
more than six plants each.

Montezuma County has one application for a medical marijuana
dispensary on hold while the county determines whether to allow
dispensaries in areas of the county outside city limits, said the
county's planning director, Montezuma County Administrator Ashton
Harrison said the county commissioners are scheduled to hold a public
hearing on the issue Aug. 30.

"Right now the county's position on medical marijuana is to look at a
public hearing," Harrison said. "As to whether to allow it or not, the
commissioners will make that decision. We won't look at regulatory
measures unless the commissioners allow it."

Montezuma County Sheriff Gerald Wallace and Cortez Police Department
Chief Roy Lane said their role will involve working with state
enforcement officers. State officers eventually will be hired to make
the rounds of Colorado's dispensaries to make sure rules are being
followed. If local police get the word a dispensary owner is in
violation, an arrest will be made or facility shut down. Cook said
HB1284 allows him to hire 1 office per 10 dispensaries, of 110, but he
has no intention of hiring that many and will hire a bout 48. Right
now.

HB 1284 requires employees at medical marijuana dispensaries to
undergo background checks, which Lane said local authorities will
assist in, adding the process for dispensaries is similar to liquor
licensing.

Cook agreed the new rules for dispensaries are similar to the rules in
obtaining liquor licenses, at least as far as regulation is concerned.

"They are, but it is not limited to just alcohol," he said. "We really
looked at the best practices from all the various divisions under the
enforcement division. Some came out of the gaming industry or the dog
and horse racing industry; licensing for employees that work in
casinos and handle money. It is all about maintaining the credibility
of the industry."

The federal government still classifies marijuana as an illegal,
"dangerous drug." However, a memo from Deputy Attorney General David
W. Ogden to the U.S. attorneys throughout the nation instructs them
not to prosecute medical marijuana cases as long as the medical
marijuana is for purposes laid out by the state and doesn't cross
state boundaries.

The memo states: "As a general matter, pursuit of these priorities
should not focus federal resources in your States on individuals whose
actions are in clear and unambiguous compliance with existing state
laws providing for the medical use of marijuana."