Medical Marijuana in Colorado

 

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By Michael Dohr

Medical marijuana was in the national news recently when each of the U.S. attorneys in California executed a coordinated shutdown of the retail medical marijuana establishments in the state. Since states began passing medical marijuana laws either through initiatives or legislative bills, tension has existed between the legality at the state level for medical purposes and the blanket illegality at the federal level. Primarily, that tension has played out based on how each federal administration has viewed medical marijuana and states' rights. The raids in California have led to questions about what will happen in other states with retail medical-marijuana establishments. Before these raids occurred, a truce appeared to exist between federal law enforcement agencies and medical-marijuana states, but the raids have changed that dynamic. Some have speculated that a highly regulated market such as Colorado's sets the acceptable balance between federal and state interests. This is the story of how Colorado's medical-marijuana system developed.

The History

During the 1997-98 initiative cycle, proponents filed Initiative 40, related to medical marijuana and collected signatures. After proponents submitted the collected signatures, a protracted battle began in 1998 about whether proponents had collected enough signatures. The battle ended in October 1998, when the Colorado Supreme Court ruled that Initiative 40 would not be placed on the November ballot. Soon after the 1998 election, Colorado's Secretary of State Victoria Buckley unexpectedly passed away, and a new secretary of state, Donetta Davidson, took office. Davidson subsequently discovered several  boxes containing petitions for Initiative 40 in the secretary of state's office, and it was determined that those signatures had not been counted. Davidson counted the petitions and, on Sept. 21, 1999, determined there were enough valid signatures to place the initiative on the November 2000 ballot as Amendment 20; it passed with 915,527 votes for and 786,983 votes against.

Amendment 20 was codified at Section 14 of Article XVIII of the Colorado Constitution. Section 14 gave patients the right to use medical marijuana, and most importantly, provided protection from state criminal prosecution for patients who use medical marijuana in compliance with Section 14. During the 2001 session, the General Assembly codified the medical marijuana program at 25-1.5-106, Colorado Revised Statutes, and created the criminal penalties for medical-marijuana fraud at 18-18-406.3, Colorado Revised Statutes. After that point, rarely a word about medical marijuana was spoken until the summer of 2009.

In 2009, retail medical-marijuana businesses began openly operating in the state, leading to newspaper articles on their emerging presence and a noticeable uptick in the number of people receiving state authorization to use medical marijuana. Several theories were developed regarding the business boom for medical marijuana, including a friendlier federal administration and limited economic opportunities. As a result, the General Assembly considered two bills during the 2010 regular session.

The Bills

To obtain a medical marijuana card, a person must have a doctor's  recommendation stating that they suffer from a debilitating medical condition and may benefit from the use of medical marijuana. One issue that garnered a lot of media attention was the spike in the number of patients on the state's registry of authorized users. That led to questions about the doctor's role in the process, specifically, whether doctors actually were evaluating patients before issuing a recommendation. Anecdotal stories told of doctors selling recommendations in store parking lots or setting up booths at fairs. The state Department of Health and Environment also reported that just a few doctors were providing approximately 75 percent of the recommendations. Finally, many retail medical-marijuana businesses had doctors on site to provide recommendations, and many were concerned that it would be difficult for these doctors to be objective.
 
These issues led to the first bill, S.B.10-109, which dealt with the physician-patient relationship and enacted three significant measures. First, to ensure that doctors actually were evaluating the patients, the bill required that there be a bona-fide physician-patient relationship when a physician provides a recommendation. To establish a bona-fide relationship, the doctor must assess the patient before the patient applies to be placed on the medical marijuana registry and must be available for follow up care. Next, to bolster the legitimacy of the physician-patient relationship, the bill prohibits a doctor from providing to or receiving remuneration from a medical-marijuana business. Finally, the bill bolstered the discipline process for physicians who violate the new provisions.

The second bill, H.B. 10-1284, garnered the most attention. It establishes the licensing structure for medical-marijuana businesses. The most significant aspect of the bill was the legal authority the medical-marijuana businesses received. When the businesses began to appear, the No. 1 question was whether they actually could operate. The bill gave them that legitimacy, but it did not provide the constitutional protection from criminal prosecution that patients have. So the businesses operate in a legal limbo.

The licensing structure was based on the Colorado liquor-licensing code, which requires an applicant to first procure a local license before the state can issue a state license. The bill detailed the application process, stated who could be licensed, and created a new licensing body in the state Department of Revenue. The bill also imposed a one year moratorium on new medical marijuana businesses. To apply for a license, businesses were required to be operating when the bill went into law. In addition to the regulatory provisions, HB10-1284 allowed local governments to ban medical-marijuana businesses, either through a vote of its governing board or by referring a vote to its citizens.

The bill creates two types of licensed businesses: medical-marijuana centers and medical-marijuana infused products manufacturers. No independent cultivation license is available, but an associated off site cultivation license exists. All centers must obtain the associated cultivation license, and an infused-products licensee also can either have a cultivation license or obtain its medical marijuana from a center that sells infused products. Since there are no independent growers, the regulatory model is a vertically integrated model. The bill permits centers to obtain no more than 30 percent of their stock from another center, so each center does not depend completely upon its own growth operations.

The licensing structure also created a state-level licensing division that has significant regulatory oversight over all licensed businesses. The licensing division adopted significant rules that govern operation of licensed businesses. For example, each medical-marijuana center must have a security camera system that meets specific standards regarding placement and resolution. The division also regularly monitors the entire cultivation operation to ensure more product is not grown than is allowed.

The Elephant Issue

The most interesting issue that was vigorously debated in HB10-1284 was whether the legislature could create and regulate a retail model for medical marijuana. Many in the law enforcement community felt the legislature had no authority to create the regulatory model for centers and infused product manufacturers. They argued that, since Section 14 does not mention a retail sale component, it is forbidden. Those who support the regulatory scheme argued that, since the word "dispensing" is mentioned in Section 14 and "distributing" is mentioned several times, Section 14 clearly contemplates some form of retail outlet based on those terms.

Neither argument seems satisfying. The major elephant hanging out in the corner of Section 14 is "Where do you get medical marijuana legally?"  If you are a patient who decides to grow your own, you  have to purchase the initial seeds, clones, or growth from someone. and that source  is illegal. Arguably, once you possess that source, it somehow now becomes legal, but at one time, it was illegal. Thus, even if patients use the original source of medical marijuana throughout their lifetimes (if that is possible), the original source was stil illegal. It is  a type of chicken-egg problem. In the more likely case, the patient actually regularly purchases marijuana from someone who illegally sells it. In that case, the source and sale of the marijuana  is illegal.

This leads back to the elephant: "Where do you get medical marijuana legally?" Since Section 14 does not mention a means to a legal source, the General Assembly, through its plenary authority, can create one. The General Assembly can decide a legal regulated market is necessary for effective operation of Section 14. As a result, the General Assembly used its plenary authority to fill gaps in constitutional provisions.

Looking Ahead

Medical marijuana presents a novel legal issue that involves competing questions of federal supremacy, states' rights, true intrastate commerce, criminal enforcement, and appropriate and ethical medical care. Colorado has tried to balance each of these interests and to respect the will of the people in placing medical marijuana in the Colorado Constitution, with a strong regulatory system that permits patients to purchase medical marijuana from a reputable and safe source. Whether it becomes the model the federal government respects remains to be seen.