COLORADO'S MEDICAL-POT RULES: ID, VIDEO AND A VAST PAPER TRAIL

DENVER-Colorado state regulators are putting the final touches on a
fat stack of rules aimed at monitoring, recording and tracking every
aspect of the booming medical-marijuana industry, from seed to sale.

The regulatory system-more rigorous and comprehensive than in any
other state-will likely require pot growers to place tags on every
plant and train security cameras on their cultivation rooms around the clock.

Cannabis dispensaries, meanwhile, will likely be required to record
high-resolution video of every customer's face and photo
identification and then link that footage to a computer record of
each purchase. Even the moment when the dried weed is weighed for
sale will have to be captured on video, according to draft
regulations now being finalized.

State regulators and local law enforcement-who say they are
determined to prevent medical pot from being diverted to the black
market-will have the authority to review any surveillance tape at any
time, without a warrant. "We don't ask. We just go look," said Matt
Cook, senior director of the state's medical-marijuana enforcement division.

That's not popular with patients, who say they shouldn't have to
sacrifice their privacy to get access to medication. Some lawyers who
work with the medical-pot industry say the regulations might be
vulnerable to a constitutional challenge. But state officials say
they have the right to impose strict controls, since marijuana
remains a controlled substance under state law, legal only for
registered patients and only in specified quantities. "You give up a
lot of your Fourth Amendment rights when you're dealing with a
controlled substance," Mr. Cook said.

Medical marijuana is legal in Washington, D.C., and 15 states. Many
of them have minimal regulations aimed at limiting the amount of
marijuana that a patient can legally possess and cultivate. Other
regulations tend to be a patchwork: Some states require patients to
register, but some don't. Some allow dispensaries, while others rely
on patients to grow the pot themselves or obtain it from registered
"caregivers." New Jersey, Arizona and Washington, D.C., are all
working on comprehensive regulations. Meanwhile, individual cities
and counties in many states are busy drafting their own restrictions.

Colorado has led the way in regulation. Anyone seeking to open or
invest in a medical-marijuana business must fill out a 22-page form
that asks for character references, criminal records, bank statements
and income-tax returns-even copies of the applicant's college
diplomas and, if applicable, divorce decrees.

Pharmaceutical pot is a growth industry in Colorado. The state has
113,000 residents registered as medical-marijuana patients, and
several thousand new applications coming in every month.

So far, 1,218 pot farms, 808 dispensaries and 318 businesses that
infuse candy, olive oils, pizzas and other edibles with marijuana
have applied for state licenses. Every facet of their operations will
soon be governed by the new regulations, which run about 100 pages
and are likely to be phased in beginning early next year.

The state's goals: to keep track of every ounce of cannabis that is
part of the legal medical-marijuana industry; to keep the drug from
the black market; and to make it easy for law enforcement to spot and
investigate suspicious behavior. For example, investigators could
detect if one patient is buying pot at multiple outlets in a single
day or if a greenhouse worker is slipping cannabis seedlings into his
pocket, state officials said.

The state Department of Revenue, which will enforce the rules, plans
a full-time staff of 40 to 50, funded entirely by annual licensing
fees of up to $18,000 imposed on pot-related businesses, said Julie
Postlethwait, a department spokeswoman.

Regulators scrapped some early proposals, such as requiring patients
to submit to a retinal scan before each purchase, but the draft rules
are still "far more bureaucratic and burdensome than in any other
state," said Keith Stroup, legal counsel for NORML, which works for
legalization of marijuana.

Mr. Stroup predicted, to his disappointment, that the regulations
would become a model for other states.

In Colorado, patient advocates have raised concerns about invasion of
privacy and warned that dispensary prices will rise to cover the cost
of complying with the regulations.

"There's a tipping point where an overly regulated system is going to
send a lot of people back to the black market" to buy their
marijuana, said Dan Pope, a resident of Longmont, Colo., who says he
takes the drug to ease symptoms from his muscular dystrophy.

But for all their anxiety, some in the industry can't help but feel a
bit delighted that the state is taking them so seriously.

"For years, the only discussion was, 'How long should we lock people
up for possessing marijuana?' " said Brian Vicente, executive
director of Sensible Colorado, a patient-advocacy group. "Now we're
discussing what the font should be on the label of a
medical-marijuana brownie."