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Sensi Magazine

Legal Lowdown

Jun 26, 2019 12:54PM ● By Leland Rucker
At this time last year, the cannabis industry and legislators were deflated and somewhat stunned after then-governor John Hickenlooper vetoed several hard-fought, bilateral cannabis bills. What a difference 12 months makes. 

Democrats took over both legislative houses in November, and Coloradans voted for Jared Polis, a staunch cannabis advocate during his years in the US Congress, as governor. Today the industry is celebrating the pas-sage of 13 cannabis bills (see sidebar) in the latest legislative session that promises to change how cannabis companies are financed, expands options for medical cannabis, and finally gives users places to use and en-joy cannabis outside their homes. None of the new laws take effect until January 2020, which gives state regulators and advocates time to hammer out rules.

A few of the bills suggest major transformations are ahead. The number of conditions that can be treated by medical marijuana was expanded to include autism (something Hickenlooper vetoed last year) and doctors now have the chance to prescribe cannabis for patients instead of opiates. House Bill (HB) 1234 gave cannabis delivery the green light to begin for medical marijuana patients in January 2020, recreational delivery begins a year later. HB 1090 allows for greater flexibility for out of state investments in marijuana businesses, and HB 1230 allows for a wide variety of businesses to include cannabis as part of their offerings.

Andy Williams, co-founder and CEO of cannabis consultancy Medicine Man Technologies, says HB1090 is intended to help local companies better compete in an expanding market, which Medicine Man is trying to do. “This will benefit consumers because you have to bring value and economies of scale that translates to the consumer,” he says. “With the people we’re bringing on board, we’ll be able to innovate and create improved products. Retail stores will be more sophisticated and consumer-friendly, and look more like retail stores around the world.”

Amendment 64, which legalized cannabis for adult use in Colorado, banned all out-of-state investment, and smaller longtime businesses are rightly concerned about the new law’s implications. Williams admits that it gives bigger companies advantages over smaller ones. “But this is not just outside companies coming and buying their way in,” he says. “This industry will mature, like alcohol after prohibition. We’re a family business, and the people we’re acquiring have been in this industry since the beginning. If we don’t do this, we will be left behind.”The bill with the potential to have the most impact on consumers when it goes into effect next year is HB 1230, concerning Marijuana Hospitality Establishments. Social consumption has been a lagging problem for every state where cannabis is now legal for adult use. Colorado’s Amendment 64 says to treat cannabis like alcohol, but that has not happened. It’s still illegal for anyone to use cannabis in a public setting or in most hotels which leaves out of state visitors largely prohibited from consuming their legal cannabis purchases. Imagine you’re a visitor to, say, Napa Valley. You pick up a bottle of wine and head to your hotel, planning on enjoying a glass on your balcony only to find out you can’t because that’s illegal. Sub out “wine” for “cannabis” and that’s what it’s like in Colorado.

“This is truly a situation where grown adults have been relegated to the shadows,” says Cindy Sovine, who has long lobbied for legal social consumption laws in Colorado. She heads the Social Consumption Coalition and has been trying to open a cannabis-themed health and wellness spa in Denver. “Think of the beauty that can happen when people can consume and embrace their culture. Now we’re like second-class citizens hiding in the dark to do a legal thing.”

House Bill 1230 allows for two licenses. The first would allow dispensaries to apply for a limited consumption license in which small amounts of marijuana may be purchased and consumed on site. The second would offer a marijuana hospitality license to any business that would allow consumption on site, under certain rules and with a special exception to the Colorado Clean Air Act.

One thing Sovine wants to make clear is that HB 1230 is not about cannabis “tasting rooms,” which were the focus of a similar, less expansive bill that Hickenlooper vetoed last year. The addition of the second hospitality license opens it to the imagination of individual entrepreneurs to come up with innovative ideas to incorporate cannabis into their businesses.

She says that by allowing micro-sales at dispensaries, as well as giving opportunities for other businesses to incorporate cannabis, the bill is the most expansive in the world. “It offers so much more opportunity out there for different jurisdictions to get creative,” she says.

“This is a transition that will take years, but the legal groundwork is now there,” says Michael Eymer, co-founder and CEO of Cannabis Tours, whose tour consumption buses are now fully legal to operate in Colorado. “It offers a much deeper reach into the hospitality world. As we move forward, we have the leverage to create reasonable rules. ”

And, as with all Colorado cannabis-related laws, local governments can opt in or out. “Just like anything with marijuana, locals always have the option. They can continue to do nothing,” says Sovine. “But there are a lot of jurisdictions that are full of home grows and might be interested in places where people could go and be monitored, but they don’t necessarily want sales.”

The new law finally offers opportunities to health and wellness centers and yoga studios. “These are all options,” Sovine says. “There are lots of opportunities for governments to engage in solutions that work for them.”

It doesn’t change the current law or allow people to consume openly in cars or in public. It will allow hotels to create their own rules on cannabis use in rooms. Restaurants will be able to decide whether to serve cannabis infused drinks and food. “This will provide people with a place to go,” says Sovine. “We should be thinking in Denver of places around Union Station. Right now there’s an underground consumption industry that has been doing pop-up events despite all the hurdles you have to jump through to throw one.”

Eymer sees cannabis-friendly concert venues, or legal smoking areas in places like Red Rocks, where illegal consumption goes on all the time anyway. “A lot of good stuff will unpack, and people will try different models. There will be more traditionally unfriendly businesses offering friendly options.”

Sovine also heads the Social Use Avengers, created to help those interested in opening or adding consumption to their business. “I want to make sure people who are interested in being an operator in this industry have access to it in a meaningful way so we can help develop an end-to-end solution for people who want to get into the business.”

Eymer says one big change for his tour buses will be the ability to sell small amounts. “One thing we haven’t been able to do is include cannabis sales in our services,” he says. “Soon, if they want to buy a joint and smoke it, they can. It’s a small but major change.”

More than five years after adult-use sales began, it’s clear that social consumption should have been dealt with long before now. “We should have done this with the rollout,” says Eymer. “We have moved at a snail’s pace. Regulators are nervous. People have different personal opinions about it. The industry has oftentimes wanted it to change slowly, too.”

Now that finally ends. “Whatever dream we have, the exciting part is that now we can begin to build it. The onus is now on us to build what consumers want.”

Cannabis Bills Passed in the 2019 Legislative Session

HB 1028: Medical Marijuana Condition Autism
Allows autism spectrum disorders to be added to the list of disabling medical conditions for medical marijuana patients.

HB 1031: Child Patient More Than One Primary Caregiver
Allows a parental guardian to serve as a medical marijuana child patient's primary caregiver.

HB 1055: Public School Cap Construction Financial Assistance
Increases the amount of retail marijuana excise tax revenue to go to the public school capital construction assistance fund and some school-related functions.

HB 1090: Publicly Licensed Marijuana Companies
Allows more investment opportunities in marijuana businesses than Amendment 64 originally outlined.

HB 1230: Marijuana Hospitality Establishments
Allows two licenses for marijuana hospitality establishments under certain conditions.

HB 1234: Regulated Marijuana Delivery
Allows delivery of cannabis to medical patients beginning in January 2020 and adult-use a year later.

HB 1311: Institute Of Cannabis Research Role And Mission
Creates an institute of cannabis research at Colorado State University-Pueblo.

SB 13: Medical Marijuana Condition Opiates Prescribed For
Allows a doctor to prescribe cannabis instead of an opioid for medical marijuana patients.

SB 213: Marijuana Cash Fund Transfer
Requires state treasurer to make specific transfers from the marijuana cash fund to the marijuana tax cash fund in 2019 and 2020.

SB 218: Sunset Medical Marijuana Program
Continues the medical marijuana program set to expire this year.

SB 220: Hemp Regulation Alignment With 2018 Federal Farm Bill
Updates the industrial hemp regulatory program to align with the federal Agricultural Improvement Act of 2018.

SB 224: Sunset Regulated Marijuana
Continues the regulated marijuana program set to expire this year.

SB 240: Industrial Hemp Products Regulation
Continues the hemp products regulated programs.