HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/30/2013 - LOCAL ACTION REGARDING AMENDMENT 64 (RECREATIONALDATE: July 30, 2013
STAFF: Darin Atteberry, Ginny
Sawyer, Don Vagge, Bronwyn
Scurlock
Pre-taped staff presentation: available
at fcgov.com/clerk/agendas.php
WORK SESSION ITEM
FORT COLLINS CITY COUNCIL
SUBJECT FOR DISCUSSION
Local Action Regarding Amendment 64 (Recreational Marijuana.).
EXECUTIVE SUMMARY
On November 6, 2012, Colorado voters passed Amendment 64, which requires the state to establish
a system in which marijuana is regulated and taxed (similar to alcohol) in a retail environment.
These licensed establishments must be separate and distinct from medical marijuana centers.
Under Amendment 64, Council has three options in regard to retail operations: (1) adopt an
ordinance prohibiting retail marijuana businesses in Fort Collins; (2) refer a retail marijuana
prohibition question to the voters; or (3) allow retail marijuana businesses in Fort Collins and
impose local restrictions on the time, place, manner and number of retail marijuana operations.
Additionally, the Amendment allows persons 21 years of age or older to legally possess up to one
ounce or less of marijuana without a doctor’s recommendation and to grow up to six marijuana
plants. Local jurisdictions have the option to better define and regulate home growing if they
choose.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Does Council need additional information to make a decision as to whether to ban or
regulate retail marijuana operations? If so, what information?
2. If retail operations are allowed in the City, what regulatory concerns would Council like staff
to address?
ALLOW RETAIL BUSINESSES - Includes Retail, Cultivation, Manufacturing, Testing
• Which types of retail establishments would be allowed?
• Utilize State regulations and adopt additional local regulations?
There are many options available for local regulations, including land use regulations,
limiting the number, fee setting, taxing allowing co-location of retail and medical,
etc.
If Council chooses to allow retail businesses, staff will recommend a temporary ban to allow
time to develop and approve local regulations
July 30, 2013 Page 2
BAN RETAIL BUSINESSES - Some or All (Retail, Cultivation, Manufacturing, Testing)
• By Ordinance?
• By Vote? (November 2014 ballot)
TEMPORARY BAN
• Adopt a temporary ban on retail establishments until:
N Council has adopted local regulations
N It is determined whether the voters will approve sales and/or excise taxes on retail
operations in November 2014.
N Other?
3. Is Council interested in submitting a local sales tax on retail operations to the voters?
BACKGROUND / DISCUSSION
Amendment 64
On November 6, 2012, Colorado voters passed Amendment 64. In Larimer County, the Amendment
passed 55.77% to 44.23%. The Amendment allows for the following types of recreational marijuana
businesses:
• Retail Store - May purchase marijuana from cultivation facilities and marijuana products from
manufacturing facilities and sell to the public.
• Manufacturing Facility - May purchase marijuana for the manufacture, preparation, and
packaging of marijuana products. Products can be sold to retail stores or other manufacturing
facilities. May not sell to the public.
• Testing Facility - Entity licensed to analyze and certify the safety and potency of marijuana.
• Cultivation Facility - May cultivate, prepare, and package marijuana for sale to a retail store
or manufacturer. May not sell to the public.
Amendment 64 also allows people 21 years of age or older to legally possess, use, display, purchase,
or transport one ounce or less of marijuana without a doctor’s recommendation. Additionally,
anyone 21 years or older may possess, grow, process, or transport up to six marijuana plants. The
cultivation of marijuana must occur in an enclosed, locked space.
In May 2013 the state legislature passed three pertinent bills addressing retail marijuana regulation
and taxation (Attachment 2).
The State was required to adopt regulations implementing Amendment 64 by July 1, 2013. The
State met this deadline by enacting emergency rules that address some, but not all, aspects of retail
marijuana businesses. These emergency rules will expire in October and are meant to provide a
July 30, 2013 Page 3
place-holder to give the State more time to conduct a formal rule making process. The State will
have final rules prior to businesses opening for operation in January 2014.
The State can begin accepting applications on October 1, 2013. A state license must be issued
within 45 to 90 days after the date of application unless the state finds that the application fails to
conform to the state’s regulations or any local ordinances or regulations that were in effect at the
time the application was submitted. If the City chooses to allow licensed retail stores and wants the
state to consider local regulations with regard to any applications submitted by October 1, the local
regulations would need to be adopted by that date.
Council Options
Amendment 64 has always allowed for local government to opt out entirely or opt in and enact local
regulations. Should a local government opt in, they must adopt an ordinance addressing licensing
by October 1, 2013.
Retail Businesses
The key local decisions include:
1. Whether to allow retail marijuana establishments to exist at all?
2. Whether to prohibit the establishment of licensed retail marijuana businesses permanently,
or only until a certain date in the future when the municipality would reevaluate whether
or not to allow such businesses to exist after some later date?
3. Which, if any, of the four distinct types of retail marijuana establishments should be
allowed?
a. retail marijuana stores?
b. retail marijuana cultivation facilities?
c. retail marijuana products manufacturers?
d. retail marijuana testing facilities?
4. Whether to limit the number of businesses allowed in any of the four classes of state
licensing and, if so, determine how to prioritize those who would compete for the limited
number of approvals.
5. Whether to pursue additional taxation on sales or businesses.
The Amendment provides for two means of opting out:
1. Ban by ordinance;
2. Refer a prohibition question to the voters in November 2014.
Communities that opt in have many local options, including:
• Setting a temporary ban until a reevaluation date in the future.
• Allowing some but not all of the types of retail establishments.
• Allowing only currently licensed medical marijuana licensees to convert to retail.
July 30, 2013 Page 4
• Limiting the number of retail establishments allowed.
• Adopting local zoning and land use requirements.
• Setting fees.
• Imposing additional taxation including a sales tax and/or occupation tax.
• Adopting local licensing procedures.
Should Council decide to opt in, staff recommends enacting a temporary ban until March 2014. This
date allows time for final state rules to be adopted and incorporated, time to draft local regulations,
and also allows time to see if voters approve taxation in November.
Marijuana Growing-Personal Use
Amendment 64 allows adults to grow six plants “provided that the growing takes place in an
enclosed, locked space, is not conducted openly and publicly, and is not made available for sale,”
however, the law does not define these terms. Municipalities may consider, and staff has already
begun, better defining what constitutes an “enclosed, locked space” and “open and publicly” in their
municipal codes.
As with medical marijuana, municipalities can use land use, building, and fire codes to regulate
home grows. Some municipalities have limited the number of plants per household (regardless of
the number of residents), some have dictated the minimum space needed per plant, others have
restricted indoor grows to using only specific types of lights; and at least one community has
prohibited home grows in multifamily housing.
Fort Collins currently allows medical marijuana patients and caregivers to grow up to 12 plants in
single-family detached residences. Growing is prohibited in multifamily residences for health and
safety reasons.
Regardless of Council direction on growing, the City will need to expand our current provisions
regarding patients and caregivers growing medical marijuana to include persons growing marijuana
consistent with Amendment 64, which allows for anyone over 21 to grow up to 6 plants.
What Other Communities are Doing
Staff has compiled data from CML and other sources to show what action other communities are
taking (Attachments 3 and 5). This data helps demonstrate the potential effects regionally, not just
by individual jurisdiction.
Our nearest neighbors are currently doing the following in regarding Amendment 64:
Loveland: Evaluating recreational marijuana
Windsor: Prohibition of all marijuana retail businesses
Greeley: Prohibition of all marijuana retail businesses
Berthoud: Prohibition of all marijuana retail businesses
Larimer County: Evaluating recreational marijuana
Boulder: Evaluating recreational marijuana
July 30, 2013 Page 5
Next Steps
Should Council decide to opt-in at any level, staff recommends enacting a temporary ban to allow
time to craft, vet, and adopt local regulations. Should Council opt to refer the question to the voters
in November 2014, staff recommends a temporary ban until after voting results are known.
ATTACHMENTS
1. Retail establishment definitions
2. CML Knowledge Now-Marijuana Legislation Implementation
3. Chart of Other Jurisdictions
4. Powerpoint presentation
Amendment 64 Definitions
(h) "MARIJUANA CULTIVATION FACILITY" MEANS AN ENTITY LICENSED TO CULTIVATE,
PREPARE, AND PACKAGE MARIJUANA AND SELL MARIJUANA TO RETAIL MARIJUANA STORES,
TO MARIJUANA PRODUCT MANUFACTURING FACILITIES, AND TO OTHER MARIJUANA
CULTIVATION FACILITIES, BUT NOT TO CONSUMERS.
(i) "MARIJUANA ESTABLISHMENT" MEANS A MARIJUANA CULTIVATION FACILITY, A
MARIJUANA TESTING FACILITY, A MARIJUANA PRODUCT MANUFACTURING FACILITY, OR A
RETAIL MARIJUANA STORE.
(j) "MARIJUANA PRODUCT MANUFACTURING FACILITY" MEANS AN ENTITY
LICENSED TO PURCHASE MARIJUANA; MANUFACTURE, PREPARE, AND PACKAGE MARIJUANA
PRODUCTS; AND SELL MARIJUANA AND MARIJUANA PRODUCTS TO OTHER MARIJUANA
PRODUCT MANUFACTURING FACILITIES AND TO RETAIL MARIJUANA STORES, BUT NOT TO
CONSUMERS.
(l) "MARIJUANA TESTING FACILITY" MEANS AN ENTITY LICENSED TOANALYZE AND CERTIFY
THE SAFETY AND POTENCY OF MARIJUANA.
(m) "MEDICAL MARIJUANA CENTER" MEANS AN ENTITY LICENSED BY A STATE AGENCY TO
SELL MARIJUANA AND MARIJUANA PRODUCTS PURSUANT TO SECTION 14 OF THIS ARTICLE AND
THE COLORADO MEDICAL MARIJUANA CODE.
(n) "RETAIL MARIJUANA STORE" MEANS AN ENTITY LICENSED TO PURCHASE MARIJUANA FROM
MARIJUANA CULTIVATION FACILITIES AND MARIJUANA AND MARIJUANA PRODUCTS FROM
MARIJUANA PRODUCT MANUFACTURING FACILITIES AND TO SELL MARIJUANA AND MARIJUANA
PRODUCTS TO CONSUMERS.
ATTACHMENT 1
Marijuana LegisLation iMpLeMentation
By Rachel Allen, Colorado Municipal League staff attorney, and Kevin Bommer, deputy director
Important actIon Item for
munIcIpalItIes:
By oct. 1, municipalities must enact a
local ordinance as described in the
“Local Ordinance” section on page 2
of this document unless the governing
body of the municipality opts out of
retail marijuana pursuant to provisions
in Amendment 64. CML will draft a
boilerplate ordinance and collect
samples that will be available upon
request. It also will be available at
www.cml.org/marijuana.aspx.
introduction
In November 2012, Colorado voters
passed Amendment 64 to the Colorado
Constitution, legalizing the personal use
and possession of marijuana for adults
21-years-of-age and older, as well as
allowing for the retail sale, cultivation,
and testing of marijuana and the
production of marijuana-infused
products.
Gov. John Hickenlooper assembled the
Amendment 64 Implementation Task
Force on Dec. 10, 2012, in Executive
Order B2012-004. The task force was
asked to identify the legal, policy, and
procedural issues that needed to be
resolved, and to offer suggestions and
proposals for legislative, regulatory, and
executive actions necessary for the
effective and efficient implementation of
Amendment 64. The task force met for
two months and delivered its final report
on March 13.
Late in the 2013 legislative session, the
Colorado General Assembly passed
legislation to implement the licensing
and regulatory framework for retail
marijuana establishments, as well as
legislation submitting a single question
to voters to implement state sales and
excise taxes.
This paper is intended to be a general
introduction to the constitutional
amendment, state legislation, upcoming
regulatory actions by the state, and
some of the options municipalities have
to regulate local retail marijuana
operations. It is not intended as an
exhaustive legal analysis, and it should
not serve as a substitute for advice from
your municipal attorney.
state legislation
Three predominant bills encompass the
state marijuana law pertaining to retail
marijuana regulation and taxation:
• The duties of the state licensing
authority and the manner in which it
interacts with local jurisdictions is
established in Part 2. A state license
will be conditionally approved within
45 and 90 days, provided the
applicant meets state licensing
standards, but the state license only
becomes operational upon approval
from the local jurisdiction. A RMJ
establishment cannot operate legally
without both a state license and local
approval, in whatever form that
approval is granted as chosen by the
local jurisdiction.
• Once the conditional license has
been issued, local jurisdictions are
required to acknowledge to the state
licensing authority whether or not the
application is either approved or
denied by the local jurisdiction. There
is no time frame established in the
statute under which this approval or
denial must occur.
• Definitions and appropriate limitations
are created on each of the four state
license types under Amendment 64.
• Numerous unlawful acts related to
state licensure are established.
There are numerous other provisions
in the bill. It is important to note that,
consistent with Amendment 64, local
governments may adopt ordinances
and regulations that are more
restrictive as long as they do not
conflict with Amendment 64, state
statutes, or state rules.
Municipalities that do not choose to opt
out will need to consider the manner in
which they will approve or deny any
state application for an establishment.
While there is no requirement to have
a local license, the decision to require
establishments to meet local licensing
requirements provides an additional
element of local control, especially
as it relates to enforcement. (In the
Colorado Liquor Code, there are some
types of licenses — such as limited
winery licenses and manufacturers’
licenses — that may be issued without
local government approval, and CML
occasionally fields complaints and
concerns from members about a lack
of local control on the establishments.
Several municipalities requested
HB 13-1317 clearly establish the option
for a local licensing requirement to
maintain a clear local interest in
RMJ establishments within their
A local license in this scenario is
different than a local license that may
be required by a local jurisdiction as
part of dual state and local licensing.
The former scenario is in lieu of
the state’s license, and the latter
(described in more detail below) is in
conjunction with a state license.
To maintain harmony with the apparent
intent of Amendment 64, local
governments that want to prohibit the
operation of any or all of the retail
marijuana licenses should adopt an
ordinance to do so prior to Oct. 1,
and in a manner consistent with
the language of Amendment 64.
Moratoriums should be worded
sufficiently to apply enough force of
law to be recognized as the “opt-out”
allowed by Amendment 64. While a
retail marijuana business cannot
become operational without local
approval, the only guarantee against
the state processing any applications
for state licenses within jurisdictions
that do not want them is to choose
to prohibit retail marijuana operations
via ordinance.
Only the governing body can opt its
jurisdiction out prior to Oct. 1, as well
as any time thereafter. Initiated or
referred questions to opt out cannot be
voted on until November 2014, or any
even year thereafter. Referenda,
initiatives, and referred questions to
opt back into Amendment 64 are not
prohibited or restricted by Amendment
64 and can apparently occur at
any time.4
options permitted under the
constitution
In conjunction with the adoption of the
required ordinance mentioned above,
Amendment 64 also permits local
ordinances governing local fees, local
regulations, and the time, place,
manner, and number of marijuana
establishments within a city or town.5
fees
While the constitution allows the
establishment of application, operating,
and licensing fees, only the operating
fee may be collected by the local
government unless the state fails to
enact rules by July 1 or fails to act
upon an individual state license
4 Id. at § 16(5)(f).
5 Id.
application within 90 days.6 Operating
fees, while not defined in Amendment
to existing medical marijuana
licensees who seek to convert
to or add a retail marijuana
license?
10. Whether to impose spacing
restrictions?
a) for retail marijuana stores, or
for other classes of state
licensing as well?
b) carry forward any existing
spacing requirements currently
imposed upon medical
marijuana centers?
c) carry forward any existing
grandfathering provisions
currently enjoyed by medical
marijuana centers and
cultivators under previous city
licensing and zoning laws?
d) adopt new forms of spacing
requirements to be applied
to retail marijuana
establishments?
11. Whether to impose other location
restrictions on retail marijuana
establishments through zoning or
otherwise, e.g., by identifying
specific zone districts in which retail
marijuana establishments are
or are not allowed?
12. Whether to impose special
restrictions on signs and
advertising?
a) defer to state restrictions?
b) carry forward restrictions
previously imposed on medical
marijuana centers and apply
the same to retail marijuana
establishments?
c) adopt new restrictions?
13. To the extent a municipality
establishes a local licensing and
regulatory regime, what is an
appropriate annual “operating fee”
to impose upon licensed retail
marijuana establishments?
14. Whether board or council members
want to allow retail marijuana
businesses to exist in the
municipality at all if the state
defaults on its licensing and
regulatory responsibility by failing
to adopt necessary regulations by
July 1, 2013; or, failing to act on
any license application, the state
licensing authority receives within
90 days?
15. In general, any implementing
ordinance allowing retail marijuana
establishments to exist should
reports of co-ops and mobile
marijuana delivery services have
emerged after the passage of
amendment 64. Does the legislation
curb these activities?
Co-ops, and mobile delivery of
marijuana are prohibited.11
Municipalities may be better served by
enacting clearer local prohibitions in
zoning ordinances or other local land
use and regulatory tools.
social clubs (where adults gather in
a commercial space to consume but
not sell marijuana) have become
another recent concern. What
options do local governments have
to regulate these?
The state legislation prohibits
on-site consumption in licensed
establishments,12 and language added
to HB 13-1317 late in the session is
largely insufficient to effectively prohibit
social clubs. Some municipalities have
regulated private cannabis clubs with
local ordinances under their land
use authority.
can a person be charged with
stoned driving, similar to DuI?
Yes. In addition to existing laws
prohibiting driving under the influence,
the legislature passed a “driving under
the influence of drugs” (DUID) bill this
session, specific to marijuana, which
creates a “permissive inference”
of intoxication if a person tests
positive for five or more nanograms
of active THC.13
can adults use marijuana while
operating a motor vehicle or
possess an open container?
No, the open container law has been
amended to include marijuana in
addition to alcohol.14
Does the clean Indoor air act apply
to marijuana smoking in addition to
cigarette smoking indoors?
Yes, the Clean Indoor Air Act was
amended to prohibit marijuana smoke
in an identical manner to the existing
prohibition on cigarette smoke.15
11 C.R.S. 12-43.4-901(4)(c) and (h)
(2013).
12 Id. at § 12-43.4-901(4)(c).
13 C.R.S. 42-4-1301 (2013).
14 C.R.S. § 42-4-1305.5 (2013).
15 C.R.S. § 25-14-203 to 204, et seq.
(2013).
Do the same 1,000-foot distance
requirements from a school; an
alcohol or drug treatment facility;
Municipality Action Taken on Amendment 64
Medical
Marijuana
Growing
Regulations Incorporation
Vote in Favor
of Amend. 64
Aurora Ordinance to Comply with Amendment 64 age, grow, and
possession provisions; Moratorium on applications until
5/5/2014
prohibited N/A Home Rule Adams 56%;
Arapahoe
52.8%; Douglas
(45.4%)
Berthoud Prohibition of marijuana cultivation, product manufacturing,
testing facilities and retail marijuana stores
allowed N/A Statutory Town Larimer 54.6%;
Weld 50.2%
Boulder Evaluating recreational marijuana allowed N/A Home Rule 66.1%
Broomfield Prohibition of the operation of marijuana establishments prohibited N/A 52.8%
Carbondale Moratorium on the establishment of any new medical or retail
marijuana facility to 12/11/2013
allowed N/A Home Rule 56.8%
Castle Rock Ordinance to comply with Amendment 64 age and possession
provisions
prohibited N/A Home Rule Town (45.4%)
Centennial A moratorium to 09/30/2014 on the operation of marijuana
cultivation facilities, marijuana product manufacturing facilities,
marijuana testing facilities, retail marijuana stores, and
marijuana clubs; Ordinance regulating the manner in which
marijuana is grown for personal use, prohibiting the operation of
certain marijuana enterprises, and prohibiting marijuana on city
owned or leased property.
prohibited N/A Home Rule 52.8%
Colorado
Springs
Prohibition on all retail marijuana sales. allowed N/A Home Rule City
Denver Informally voted to move forward in regulating licensure of retail
marijuana. (6/4/2013)
allowed Home Rule City
Dillion Moratorium on the submission, acceptance or processing of
applications and the licensing, permitting, establishment or
operation of any recreational marijuana business to 10/01/2013.
prohibited N/A Home Rule 69.2%
Eaton Prohibition of marijuana cultivation, product manufacturing,
testing facilities and retail marijuana stores
Englewood Prohibition of the operation of marijuana establishments, put to
a citizen vote for the November 5, 2013 election as an advisory
question
allowed N/A Home Rule 52.8%
Erie Moratorium on the submission, acceptance or processing of
applications and the licensing, permitting, establishment or
operation of any recreational marijuana business to 10/01/2013.
prohibited N/A Statutory Town Boulder 66.1%;
Weld 50.2%
ATTACHMENT 3
Municipality Action Taken on Amendment 64
Medical
Marijuana
Growing
Regulations Incorporation
Vote in Favor
of Amend. 64
Estes Park Moratorium on marijuana establishments until 10/1/2013 prohibited Statutory Town
Evans Prohibition of marijuana cultivation, product manufacturing,
testing facilities and retail marijuana stores
prohibited Home Rule City
Ft. Morgan Moratorium on the operation of marijuana establishments
pursuant to Amendment 64 to 2/31/2013.
prohibited N/A Home Rule (42.3%)
Garden City Awaiting guidance allowed Statutory Town
Greenwood
Village
Prohibition of any marijuana cultivation facility, marijuana
product manufacturing facility, marijuana testing facility, or
retail marijuana store or marijuana club; Regulation of the
personal cultivation, possession, and use of marijuana; Banned
marijuana on sidewalks and public streets
prohibited Developing
ordinance
regarding
home growing
to
address mold &
fire
concerns
Home Rule 52.8%
Greeley Prohibition of any marijuana cultivation facility, marijuana
product manufacturing facility, marijuana testing facility, or
retail marijuana store.
allowed Home Rule 50.2%
Gunnison Ordinance to comply with Amendment 64 age, grow, and
possession provisions; Prohibition of any marijuana cultivation
facility, marijuana product manufacturing facility, marijuana
testing facility, or retail marijuana store.
prohibited N/A Home Rule City 67.3%
Johnstown Prohibition of marijuana cultivation, product manufacturing,
testing facilities, and retail marijuana stores.
prohibited
N/A Home Rule Larimer 54.6%;
Weld 50.2%
Larimer
County
allowed
Lafayette Moratorium on the submission, acceptance or processing of
applications and the licensing, permitting, establishment or
operation of any recreational marijuana business to 10/01/2013.
allowed N/A Home Rule 66.1%
Lakewood Moratorium on the licensing, permitting, establishment, or
operation of any new marijuana enterprise to 01/01/2014
N/A Home Rule 53.7%
Longmont banned marijuana‐related businesses from the city limits; ban
marijuana clubs
prohibited N/A Home Rule City
Loveland prohibited N/A Home Rule City
Louisville Moratorium on retail marijuana establishments allowed Home Rule 66.1%
Municipality Action Taken on Amendment 64
Medical
Marijuana
Growing
Regulations Incorporation
Vote in Favor
of Amend. 64
Lyons Moratorium on the licensing, permitting, establishment, or
operation of any new marijuana enterprise to 10/01/2013;
Moratorium on the licensing, permitting, establishment, or
operation of any new business that sells, cultivates, or tests
marijuana or any marijuana products, or any marijuana
enterprise to 10/01/2013.
N/A Statutory Town
Northglenn Decision pending on retail stores allowed N/A Home Rule Adams 56%;
Weld 50.2%
Steamboat
Springs
Moratorium on any business that permits or invites private
assembly for the purpose of the use or consumption in any
manner of marijuana or marijuana products in any form to
05/05/2013.
allowed N/A Home Rule 62.9%
Timnath Prohibition of marijuana cultivation, product manufacturing,
testing facilities and retail marijuana stores, and marijuana clubs.
prohibited N/A Home Rule Town
Vail Moratorium on the operation of marijuana establishments
pursuant to Amendment 64 to 08/06/2013.
prohibited N/A Home Rule 66.5%
Westminster Prohibition on retail sale, distribution, cultivation and dispensing
of recreational marijuana through marijuana establishments and
optional premises cultivation operations; Ordinance to comply
with Amendment 64 age, grow, and possession provisions.
prohibited N/A Home Rule Adams 56%;
Jefferson 53.7%
Wellington Ordinance to prohibit retail cultivation, retail manufacturing,
retail testing, and retail stores.
prohibited N/A Statutory Town
Windsor Prohibition of the operation of any marijuana business
enterprise within the meaning of Amendment 64; Prohibition of
the establishment and operation of private marijuana clubs.
prohibited N/A Home Rule Larimer
54.6%;Weld
50.2%
1
1
Amendment 64
and Local Implications
City Council Work Session
July 30, 2013
2
Direction Sought
1. Does Council need additional information to make a decision as to
whether to ban or regulate retail marijuana? If so, what
information?
2. If retail operations are allowed, what regulatory concerns would
Council like staff to address?
3. Is Council interested in submitting a sales tax option to the voters?
ATTACHMENT 4
2
3
Amendment 64 Overview
Provides for Legislature to adopt a system for
licensing marijuana businesses defined in the
Amendment.
Does not amend existing medical marijuana laws.
Does not amend Federal prohibition.
4
Types of Businesses
• Retail Store- May purchase marijuana/ products and sell to the
public.
• Manufacturing Facility- May purchase marijuana for the
manufacture, preparation, and packaging of marijuana products.
May not sell to the public.
• Testing Facility- Analyze and certify the safety and potency of
marijuana.
• Cultivation Facility-May cultivate, prepare, and package marijuana
for sale to a retail store or manufacturer. May not sell to the public.
3
5
Amendment 64 Overview
Allows Municipalities three options:
• Prohibit retail marijuana businesses by ordinance.
• Refer a retail marijuana prohibition question to the
voters. (Nov. 2014)
• Impose local restrictions on the time, place,
manner and number of retail marijuana
operations.
6
Amendment 64 Overview
• Treats marijuana similar to alcohol.
• Over 21, person may possess up to 1 ounce
without medical permission.
• Allows individuals to grow up to 6 plants in an
enclosed, locked space.
4
7
Current Status
• The state adopted emergency rules by
July 1, 2013.
• These rules will expire in October 2013 but are
meant to be a place holder.
• The state anticipates having final rules by
January 2014.
• State can begin accepting applications on
October 1, 2013.
8
Next Steps
Amendment 64 has always allowed for local
government to opt-out entirely or opt-in and enact
local regulations.
Should a local government opt-in they must adopt an
ordinance addressing licensing by October 1, 2013.
5
9
Opt-Out Options
Two means of opting out:
– Ban by ordinance.
– Refer a prohibition question to the voters in
November 2014.
10
Temporary Ban Options
• If Council refers a measure to the November
2014 election.
• If Council chooses to see whether voters
approve additional taxes in November 2014.
• If Council chooses to opt-in a temporary ban
would allow time to create and adopt local
regulations.
6
11
Opt-In Options
• Set a temporary ban until a re-evaluation date in
the future.
• Allow some but not all of the types of retail
establishments.
• Allow only currently licensed medical marijuana
licensees to convert to retail.
12
Opt-In Options
• Limit the number of retail establishments allowed.
• Adopt local zoning and land use requirements.
• Set fees.
• Pursue additional taxation.
• Adopt local licensing procedures.
7
13
Direction Sought
1. Does Council need additional information to make a decision as to
whether to ban or regulate retail marijuana? If so, what
information?
2. If retail operations are allowed, what regulatory concerns would
Council like staff to address?
3. Is Council interested in submitting a sales tax option to the voters?
14
Direction Sought
BAN RETAIL BUSINESSES-Some or All
By Ordinance?
By Vote? (November 2014 ballot.)
8
15
Direction Sought
ALLOW SOME OR ALL RETAIL BUSINESSES
Includes Retail, Cultivation, Manufacturing, Testing
Utilize State regulations and adopt additional local regulations?
Adopt a temporary ban on retail establishments until:
• Council has adopted local regulations.
• It is determined whether voters approve a sales tax in
November 2014.
• Other?
the principal campus of a college,
university, or seminary; or a
residential child care facility, as
medical marijuana establishments
apply to retail marijuana
operations?
No, there is no 1,000-foot distance
limitation for retail marijuana
establishments as it pertains to
qualifications for a state license, so
municipalities should consider
addressing this in their local
ordinances or rules.
can a municipality act as the grower
or owner?
No, state law prohibits government-run
retail marijuana operations.16
Does the same requirement for the
state to issue a state license
between 45 and 90 days also apply
to local jurisdictions?
No. There is no constitutional or
statutory requirement specifying how
long a local government may take to
indicate its approval or denial of a
conditional state license. However, in
the event the state fails to meet any of
the obligations that would otherwise
cause an applicant to apply directly to
the local government under the
constitutionally required local licensing
ordinance, then the local government
must act within 90 days.17
If we choose to license retail
marijuana establishments, can the
city or town prohibit use in public
buildings and parks?
Yes. While consumption of marijuana
“openly and publicly”18 is not allowed,
Amendment 64 specifically allows
for the prohibition of marijuana
possession, consumption, use, display,
transfer, sale, transportation, or
growing in public buildings.19 The
state legislation does not define “open
and public,” so municipalities might
consider doing so in their local codes.
16 C.R.S. § 12-43.4-103 (2013).
17 COLO. CONST. art. XVIII, § 16(5)(h).
18 Id. at § 16(3)(d).
19 Id. at § 16(6)(d).
can a municipality limit the size of
personal home grows authorized by
amendment 64?
While Amendment 64 allows each
adult to grow six plants “provided that
the growing takes place in an
enclosed, locked space, is not
conducted openly and publicly, and is
not made available for sale,”20 the law
does not define those terms, so
municipalities may consider clearly
defining what constitutes an “enclosed,
locked space” in their municipal codes.
Much like they can with medical
marijuana, municipalities can use
land use, building, and fire codes
to regulate home grows. Some
municipalities have limited the number
of plants per household (regardless of
the number of residents), some have
dictated the minimum space needed
per plant, others have restricted indoor
grows to specific types of lights, while
others have prohibited home grows in
multifamily housing.
additional resources
CML has sample ordinances and a
table tracking municipal actions on
retail marijuana at www.cml.org/
marijuana.aspx. Please contact
CML Staff Attorney Rachel Allen at
303-831-6411, 866-578-0936, or
rallen@cml.org to request copies of
additional sample ordinances.
If you have questions, please contact
CML Deputy Director Kevin Bommer
(kbommer@cml.org) or CML Staff
Attorney Rachel Allen (rallen@cml.
org). Both can be reached at 303-831-
6411 or 866-578-0936.
Special thanks
CML would like to extend a special
“thank you” and acknowledgement to
Denver Assistant City Attorney David
Broadwell for authoring the “Key
Decision Points” section of this
document.
20 Id. at § 16(3)(b).
KNOWLEDGE NOW 3
establish “civil penalties” for
violation of city requirements.
16. Any implementing ordinance
allowing retail marijuana
establishments to exist should:
a) clearly identify a single point of
contact with whom the state
licensing authority will interact
to determine whether or not a
particular license application or
other licensing action complies
with local requirements; and
b) specify deadlines for
responding to the state
regarding new license
approvals and other licensing
actions.
revenue and taxation
The major marijuana taxation bill of the
session was HB 13-1318, which refers
a single question to the November
2013 statewide ballot with two revenue
raising components: a wholesale
15 percent excise tax on cultivated
marijuana earmarked for school capital
construction as described in
Amendment 64; and a special
10 percent sales tax to be imposed
over and above the state’s normal
2.9 percent sales tax. The legislature
will have the ability through legislation
to increase the tax. Of the special
10 percent sales tax revenue,
15 percent will be shared with the
local jurisdictions in which the tax is
collected, similar to the cigarette tax
share back, with the exception that
local governments would not be
penalized for retaining their own sales
tax authority and existing taxes.
Both HB 1317 and 1318 capture sales
tax and fee revenue derived from retail
marijuana businesses and dedicate
these revenues to the “direct and
indirect costs” of administering the
state regulatory regimes for both
medical and retail marijuana. However,
the local share-back of revenue
derived from the special 10 percent
sales tax is not earmarked by 1318 for
any particular purpose.8
Policy makers should consider a
variety of options including:
• Whether to budget and appropriate
monies to provide additional
resources for marijuana-related
regulatory enforcement and services?
• Whether to require marijuana
establishments to post a marijuana
tax bond to ensure the payment of
local taxes by these retail
establishments?
• Whether to refer to the ballot a
question imposing additional local
sales or excise tax on marijuana?
— if your board or council decides
to refer a ballot question
- at what rate?
- earmark the revenues
for a purpose?
— additional tax considerations
include
- what to do with state
share back?
- what to do with existing
sales tax revenues derived
from medical and/or retail
marijuana operations?
- opt to levy an additional
sales or excise tax?
• Whether to impose operating fees on
retail marijuana establishments?
faQs
Is dual licensing at both the state
and local level (like liquor licensing)
contemplated in the legislation?
Dual licensing is expressly allowed, but
not mandated. However, unlike liquor
licensing, an applicant will get
conditional state approval before any
local approval is considered.9
can an adult purchase and
consume marijuana in the same
location?
No, consumption of marijuana is
prohibited on public premises that
are licensed to sell retail marijuana
or products.10
8 The ballot title designates that tax
revenues will be used “to fund the
enforcement of regulations on the retail
marijuana industry and other costs
related to the use and regulation of
retail marijuana.” Some may argue this
creates a limitation.
9 C.R.S. § 12-43.3-104(3) (2013).
10 Id. at § 12-43.4-901(4)(c).
4 COLORADO MUNICIPAL LEAGUE
64, are defined by HB 13-1317 as
“fees that may be charged by a local
jurisdiction for costs, including but not
limited to inspection, administration,
and enforcement of retail marijuana
establishments.”7
local licenses
Even though it is not expressly
permitted or prohibited by Amendment
64, HB 13-1317 establishes the ability
for local jurisdictions to require a local
license under local “time, place, and
manner” conditions. This should not be
confused with the constitutional
requirement mentioned above that
directs local jurisdictions to establish
a local licensing procedure based
on the state’s failure to meet
certain deadlines. A local licensing
requirement under “time, place, and
manner” is purely optional and is
meant to work similar to alcohol
beverage dual licensing.
Key decision points
The legislation from the 2013 session
addressing state and local authority to
license and regulate retail marijuana
establishments and the text of
Amendment 64 leave cities and towns
with numerous options for local
regulation. Some of the considerations
for local regulation might include:
1. Whether to allow retail marijuana
establishments to exist at all?
2. Whether to prohibit the
establishment of licensed retail
marijuana businesses permanently,
or to do so only until a certain date
in the future at which time the
municipality would reevaluate
whether or not to allow such
businesses to exist after some
later date?
3. Which of the four distinct types of
retail marijuana establishments will
be allowed?
a) retail marijuana stores?
b) retail marijuana cultivation
facilities?
c) retail marijuana products
manufacturers?
d) retail marijuana testing
facilities?
6 Id.
7 Id.; C.R.S. § 12-43.4-103(11).
4. Whether to provide a phase-in
period during which only current
medical marijuana licensees may be
allowed to convert to retail marijuana
establishments or add a retail
marijuana license to current
operations?
a) if so, for how long?
b) allow changes of ownership
during the phase-in period?
c) allow changes in location
during the phase-in period?
5. Whether to allow collocation (i.e.,
dual use of the same location) for
medical marijuana businesses and
retail marijuana businesses?
6. Whether to limit the number of
businesses allowed in any of the
four classes of state licensing and, if
so, determine how to prioritize those
who would compete for the limited
number of approvals.
7. Whether to establish and administer
a separate local licensing
requirement, per se, or instead
depend entirely on other laws (e.g.,
zoning and land use laws) to enforce
“time, place, and manner”
restrictions on retail marijuana
establishments?
8. Whether to adopt counterpart local
regulations addressing some or all
of the same subject matter being
addressed in state regulations, or
instead focus local regulations
entirely on aspects of “time, place,
and manner” that are not being
regulated by the state?
a) character and background
checks for state license
applicants?
b) business operational
standards?
c) product standards?
9. Whether to establish hearing
procedures and approval criteria for
retail marijuana establishments?
a) only for retail marijuana stores,
or for other classes of state
licensing as well?
b) mandate public hearing
requirements?
c) criteria for approval: “needs
and desires” and “reasonable
requirements of the
neighborhood” as it is for liquor
licensing or something else?
d) apply same approval
procedures and criteria equally
KNOWLEDGE NOW 3
respective jurisdictions.)
HB 13-1318
HB 13-1318 contains the statutory
implementation of a special sales tax
and an excise tax, as well as refers a
single question on the adoption of both
to voters on the November ballot. If
approved by the voters, both the sales
and excise tax described in the
“Revenue and taxation” section below
become operational.
sB 13-283
SB 13-283 enacts several provisions
that were generally identified as
“consensus items” by the Amendment
64 Task Force. The bill
• enacts permissive language allowing
local governments the ability to
prohibit the use of compressed,
flammable gas in a residential setting
for use as a solvent in the extraction
of cannabinoids or THC;
• establishes the legality and
enforceability of contracts pertaining
to lawful activities authorized by
Amendment 64;
• creates several required state reports
and studies on various social and
health impacts of legalization of
possession and use of marijuana;
• includes marijuana smoke within the
Clean Indoor Air Act’s prohibition on
smoking in public places; and
• establishes a prohibition on open
containers of marijuana or marijuana
products within a motor vehicle that
mirrors the same prohibition on open
containers of alcohol.
As introduced, the legislation also
included consensus language on
criminal matters in Title 18, including
key definitions and related prohibitions
on terms stated in Amendment 64 but
left undefined. All of this language was
stripped, and the bill instead requires a
report by the Colorado Commission on
Criminal and Juvenile Justice (CCJJ)
by the end of the year with the
intention of introducing a bill in the next
legislative session. The result is a
failure to have a standard language in
the state’s criminal code of “openly and
publicly,” “enclosed, locked space,”
and other language connected to the
now legalized possession and use of
cannabis until legislation is enacted
next year. In the meantime,
municipalities may choose to
address these issues within their
respective municipal codes.
constitutional requirements
state rulemaking
The Colorado Department of Revenue
(DOR) Marijuana Enforcement Division
(MED) must adopt regulations
implementing Amendment 64 by
July 1, 2013.2 Should the state fail to
meet this deadline, applicants may
submit license applications directly to
local jurisdictions starting on Oct. 1,
2013, and the local jurisdiction must
act on the application within 90 days.3
This local license is issued under
authority of the constitutionally
mandated local ordinance discussed
below, and the licensee is not subject
to any regulation or enforcement by
MED while the local license is active.
local ordinance
By oct. 1, every municipality and
county (that has not already prohibited
retail marijuana establishments) must
adopt an ordinance that designates the
entity within the local government
responsible for licensing under three
specific circumstances:
• if the state fails to adopt regulations
by the July 1 deadline;
• if the state fails to issue any licenses
by Jan. 1, 2014; or
• if the state licensing authority fails to
act within 90 days upon an
application submitted to it.
Should the state fail to license under
any of the three scenarios above,
then applicants may apply directly to
the local jurisdiction for a local license
under the required ordinance unless
that municipality has opted to prohibit
retail marijuana operations.
Amendment 64 recognizes that a local
jurisdiction will not have any state
assistance in this case, and allows
the local jurisdiction to establish
procedures for the issuance,
suspension, and revocation of any
license issued by the local jurisdiction.
2 COLO. CONST.art. XVIII, § 16(5)(a),
PERSONAL USE AND REGULATION
OF MARIJUANA (also known as
“Amendment 64”).
3 Id. at § 16(5)(i).
2 COLORADO MUNICIPAL LEAGUE
HB 13-1317, HB 13-1318, and
SB 13-283.
HB 13-1317
HB 13-1317 contains the bulk of the task
force recommendations and establishes
the regulatory framework for licensing by
the state and local jurisdictions. The
established language of the Colorado
Medical Marijuana Code (CMMC) was
used to fill in the process-related
components of the new Colorado Retail
Marijuana Code (CRMC), but
differences in the licensing process
between the two led to significant
changes in the legislation as it
progressed.1
1 It is worth noting that the licensing
process in the CMMC was significantly
altered by HB 13-1238 to mirror
licensing under Amendment 64 going
forward. Municipalities are encouraged
to familiarize themselves with these
changes regarding any new medical
marijuana license applications in the
future. CML is available for further
assistance.
HB 13-1317 contains the following
significant provisions:
• At the state level, all future medical and
retail marijuana sales and excise tax
revenue, as well as all state licensing
and application fees, will be deposited
into a single fund for the newly
rebranded Marijuana Enforcement
Division of the Department of Revenue.
• On oct. 1, an existing medical
marijuana licensee may apply to the
state licensing authority for a state
retail marijuana establishment license.
Under certain circumstances, including
local approval, the licensee may
continue to operate part of the licensed
premises for medical marijuana (MMJ)
and part for retail marijuana (RMJ).
The state is required to act upon such
applications between 45 and 90 days,
and conditional licenses (explained
later) must be issued before Jan. 1,
and will be effective on Jan. 1.
• After Jan. 1, any person not already
licensed for MMJ may submit a notice
of intent to apply for a retail license. A
notice fee may be collected and half
will be sent to the local jurisdiction. The
person may apply for a state license on
July 1, 2014.
• Under all circumstances, one-half of
the application fee collected will be
sent to the local jurisdiction unless
the jurisdiction has opted out pursuant
to its authority to do so under
Amendment 64.
• Consistent with Amendment 64, local
jurisdictions may enact ordinances and
regulations governing the time, place,
manner, and number of marijuana
establishments. Under these
provisions, a local jurisdiction has the
option to create a local licensing
requirement.
The Knowledge Now series features practical research on timely topics
from the Colorado Municipal League.
KNOWLEDGE NOW 1
Marijuana legislation implementation, May 2013
The Voice of Colorado’s Cities and Towns the inforMation you need to serve your MunicipaLity and residents
knowledge now
ATTACHMENT 2