MMJ BUSINESSES WORK TO CORRECT VIOLATIONS AS LICENSING NEARS

As the Colorado Department of Revenue prepares to enact a slew of new
rules for medical marijuana businesses on July 1, ongoing industry
policing is weeding out those not meeting current regulations.

Top Shelf Alternative of Colorado Springs has closed as a result of
non-compliance with the mandate that centers must grow 70 percent of
all medical marijuana they sell, according to the state's Medical
Marijuana Enforcement Division.

The division in December notified 91 centers out of 818 statewide that
they were in violation of laws and in danger of being shut down, said
Julie Postlethwait, division spokeswoman.

Dispensaries were to have been certified to grow the bulk of their
stock by Sept. 1, 2010, as a result of legislation passed last year
and now called the Colorado Medical Marijuana Code.

Sixteen of the 91 centers cited were in Colorado Springs; one was in
Florissant.

All but six statewide made appointments with the Department of Revenue
to discuss the situation and are working to obtain certification to
stay in business, Postlethwait said. Top Shelf, which was at 825 N.
Circle Drive, was among the six that did not call for an
appointment.

"We are in the process of conducting site visits to the centers and
cultivation sites involved," she said.

The centers also could face fines.

Another local center, Med-A-Grow, 202 N. Chelton Road, is being
investigated for not having an application filed with the state and,
therefore, is considered to be operating illegally, she said.

Local authorities raided another dispensary, Cannabis Therapy Center
in unincorporated El Paso County, in December for not having the
proper paperwork.

On March 30, the state Attorney General's Office and Legislative Legal
Services passed the first set of rules for regulating the industry.
They will take effect July 1, and amount to 73 pages covering the
cultivation, manufacture, distribution and sale of medical marijuana
in an attempt to eliminate illicit activity. More regulations,
including patient identification cards, are yet to come.

To help enforce the rules, satellite offices are being established in
Colorado Springs, Fort Collins and Fruita.

Postlethwait said her division is negotiating leases for the new
offices and interviewing applicants to fill 25 inspector and four
auditor positions to staff the sites.

The state has applications for licenses from 206 centers and infused
product manufacturers in Colorado Springs, 11 in El Paso County and
four in Teller County.

Statewide, there are about 2,000 industry-related businesses.
Applications filed with the state include 818 centers, 237 infused
product manufacturers and 1,200 growers, Postlethwait said.

The state will begin issuing licenses to those applicants on July 1
and is expected to lift a moratorium on new business applications then.