Legalized Marijuana Update CWAG Annual Conference July 22, 2014 - PowerPoint PPT Presentation

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Legalized Marijuana Update CWAG Annual Conference July 22, 2014

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Lessons Learned Don t put it in your Constitution! Don t allow Medical and Recreational. Regulated Differently. ... Co-ops; OCC; FDIC/NCUA; ... – PowerPoint PPT presentation

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Title: Legalized Marijuana Update CWAG Annual Conference July 22, 2014


1
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2
Legalized Marijuana Update CWAG Annual
Conference July 22, 2014
David C. Blake Deputy Attorney General Colorado
Attorney Generals Office
3
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4
Legalized Marijuana
  • Medical (Amend 20) and Rec (Amend 64)
  • Limited possession 21 over
  • 1 oz of MJ plant or concentrate, 100 mg of THC in
    an edible or No more than 6 plants in home grow
  • May not consume openly and publicly
  • Local opt in/out Approval and Regulation
  • Significant Litigation and Legislative Effort

5
Commercial Licensing
  • Dept. of Revenue, Marijuana Enforcement Div
  • Growers
  • Processors
  • Retail stores (sell only marijuana,
    paraphernalia)
  • Testing Facilities
  • Licenses limited to Colorado residents (2 yrs)
  • Applies to all members of business entities
  • Criminal background checks for members and
    financiers

6
Similar but Different
  • Taxes
  • 15 Excise Tax (first 40m to schools)
  • 10 Point of Sale Tax
  • Regular 2.9 Sales Tax
  • Local Tax if imposed
  • Effective Tax Rate of about 22
  • Approx. 35m in total taxes Jan May 2014
  • Monthly Sales range between 14m and 19M per
    month for recreational
  • In litigation for tax collection
  • Medicinal Marijuana only subject to 2.9 Sales
    Tax

7
Similar but Different
  • Zero Policy Policies for Employers and Property
    Owners (but we are bring sued)
  • Edibles less regulated (new law takes effect
    2016)
  • 1000 buffer from schools but local controlled
    (Federally Enforced in 2012)
  • Advertising restrictions (but we are being sued)
  • Labeling and Packaging (Childe Proof THC
    content Contents, Warnings)
  • Child-Resistant packaging
  • Product tracking using RFID tags and Real-Time
    Tracking System
  • Authorized Banking Cooperatives

8
Similar but Different
  • DUI presumptive inference limit 5ng active THC
    / mL blood
  • 24 Hour Surveillance (no longer real time)
  • No Firearms
  • Approximately 50 Enforcement Officers for entire
    State
  • Food Safety is job of local jurisdictions
  • Locals, not state, can ban home production of
    Extracts
  • Require THC Testing but done by private labs
  • Contaminant Testing is coming (Recreational Only)

9
Supply and Demand
  • Approx. 130 Metric Tons of MJ in 2014 (21 only)
  • Approx. 485K regular users of marijuana in
    Colorado
  • Chronic Users Continue to Use Medical MJ
  • Regular Users drive market approx. 22 of users
    consume almost 70 of MJ sold (tax loophole)
  • Rare Users, make up 1/3 of market, account for
    less than 1 of demand
  • 90 of customers in Mountain Towns are from Out
    of State
  • Costs between 150 and 300 per oz

10
Meanwhile, in a state near you
11
Industry Campaign
  • Polls above 50 everywhere
  • National Strategy . . . State by State
  • Professional and Well Funded
  • Now in 33 States and increasing Federal Response
  • Strategy has 4 Main Parts
  • Market the Medicinal Value
  • No State Started with Recreational
  • Charlottes Web Strain
  • Compare it alcohol and/or tobacco
  • Benefits Education with Tax Dollars
  • Saves Money (less law enforcement/War on Drugs)

12
Industry Marketing
13
Industry Marketing
14
Industry Campaign
  • Polls above 50 everywhere
  • National Strategy . . . State by State
  • Professional and Well Funded
  • Now in 33 States and increasing Federal Response
  • Strategy has 4 Main Parts
  • Market the Medicinal Value
  • No State Started with Recreational
  • Charlottes Web Strain
  • Compare it alcohol and/or tobacco
  • Benefits Education with Tax Dollars
  • Saves Money (less law enforcement/War on Drugs)

15
Lessons Learned
  • Dont put it in your Constitution!
  • Dont allow Medical and Recreational
  • Regulated Differently
  • Both in Constitution
  • Caregiver Loophole (Gray Market)
  • Different Taxing Schemes
  • Different public consumption restrictions

16
Dude, How Did We Get Here?
  • Federal/State
  • Banking  (money laundering tax fraud/evasion
    BSA/SARs FINCEN Guidance Valentines Day memo
    Federal Reserve public safety/cash management
    Co-ops OCC FDIC/NCUA HR2652/Perlmutter)
  • Federalism/PreEmption (Raich CSA Asset
    Forfeiture (civil vs. criminal) interstate
    trafficking airport seizures federal lands
    Ogden Memo Cole I Cole II USAO Letters US
    Mail seizures)
  • IRS (tax collection 280E small business
    exemptions income standards (fed vs. State))
  • State cooperation w/Federal enforcement (info
    sharing subpoenas task forces)

17
Dude, How Did We Get Here?
  • Regulatory (State and Local)
  • Doctors (meaningful management of patient DEA
    license medical necessity)
  • Constitution vs. Statutory
  • Edibles (serving size THC contents labeling
    same as food markings child proof trademark)
  • Lawyer Ethics
  • Taxes (sales tax excise tax local tax fees
    restrictions on spending (MJ related vs
    potholes) prevention education treatment
    funding capital construction for education
    (mixed messages) general funding medical
    untaxed vs recreational taxed 2X)
  • Ownership/Employees/Investment (Residency
    jurisdiction background checks (fingerprint)
    bonding Straw Ownership)
  • Chronic Illness (PTSD Chronic Pain high-CBD
    content)
  • Point of Sale Quantity Limits (anti-trafficking
    amounts, personal use amounts, medicinal amounts
    (recommendations))
  • Sale to Minors (fake ID training confiscation
    mandatory alerts/hold)
  • Diversion (to under 21 interstate of
    tainted/mislabeled weed MIP redefine)
  • Seed-to-sale (technology real-time monitoring
    audits/inspections record keeping)

18
Dude, How Did We Get Here?
  • Regulatory (State and Local)
  • Trademark Infringement
  • DUID (Per se limits Inferences blood draws
    18-21? under 18 Delta 9 THC oral swabs
    statistics/metrics alcohol/THC mix mandatory
    mins vehicular manslaughter repeat offenders
    ARIDE training and DRE Officers)
  • Consumer Protection (testing contaminants
    trademark infringement content/potency labeling)
  • Public consumption ("open and public front
    porch next to a playground edibles vs burning)
  • Local control (public advertising zoning
    opt-out/opt-in inspection standards (food, fire,
    grows) establishment licensing)
  • Advertising (internet circulars street signs
    store signage pop-ups)
  • Magazine ban (1st Amend behind the counter)
  • Government Employee conspiracy participation
    (seizure return tax collection advice )
  • Home grows (amounts first safety child access
    extraction)
  • Safety mechanisms (potency limits, labeling,
    child proof packaging)
  • Grow size limits
  • Operating Applicants

19
Dude, How Did We Get Here?
  • Regulatory (State and Local)
  • Metrics/Statistics (LE tracking DUID tracking
    usage rates health risks rise in health costs
    LE costs (rise or lower Firearm possession (ATF
    Form 4473 de facto ban Felon in possession)
  • Free give-aways/sales/promotions
  • Testing lab capacity (in-state only
    out-of-state same level of control)
  • Danger Labels vs Child Proof packaging
  • Caregivers (agency law assistance direct
    relationship caregiver loophole affirmative
    defense Blue Cards)
  • Possession Oz/Plant count limits (enforcement
    (1oz vs 1.1oz) concentrates edibles
    equivalents (bud vs wet vs edible vs concentrate
    open container definition)
  • Heat vs. Cold extraction (concentrates banned?)
  • Home grows (banned?)
  • Consumer Privacy/Registry Confidentiality
  • Higher Ed (clinical trials strain testing
    independent tests government testing (non-DEA)
  • Hemp
  • Govt Controlled (ABC stores)
  • State vs State (lawsuits grant program
    (anti-diversion) cooperation)
  • Mobile stores

20
Contact Info
  • David Blake
  • Deputy Attorney General for
  • Legal Policy and Government Affairs
  • David.Blake_at_state.co.us
  • 303/866-5792

21
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