Speakers for the Town Hall include: Rachel Allen, staff attorney, Colorado Municipal League Sean Paige, former City council member Don McKay,

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1 Speakers for the Town Hall include: Rachel Allen, staff attorney, Colorado Municipal League Sean Paige, former City council member Don McKay, co-owner, Southern Colorado Medical Marijuana Charles Houghton, attorney, Colorado Springs Medical Cannabis Council Don Kidd, Military Affairs Council Ed Anderson, LTG, U.S. Army Ret. and Chairman, Colorado National Defense Support Council Jo McGuire, director, Compliance and Corporate Training, Conspire Pete Carey, chief of police, Colorado Springs Vince Niski, deputy police chief, Colorado Springs Thor Eells, commander VNI, Colorado Springs Police Department Tommy Smith, interim fire chief, Colorado Springs Stephanie Finley, executive director, University Partnerships, University Colorado at Colorado Springs Alicia McConnell, chair, board of directors, Colorado Springs Convention and Visitor's Bureau Dave Anderson, principal/2012 Candidate for US Congress, Cogent Strategies Joe Raso, president and CEO, Colorado Springs Regional Business Alliance Mike Jorgensen, chair of the board, Colorado Springs Regional Business Alliance; president and partner, Red Noland Cadillac Tom Neppl, vice chair of the board, Colorado Springs Regional Business Alliance; president, Springs Fabrication Dave Munger, president, CONO Mark Slaugh, owner, icomply

2 Retail Marijuana ( RMJ ) Overview by Rachel Allen, staff attorney

3 Amendment 64 Regulate the growth, manufacture, and sale of marijuana in a system of licensed establishments overseen by state and local governments; Allow individuals who are 21 years old or older to possess, use, display, purchase, transport, and transfer (without remuneration), to individuals who are 21 years old or older one ounce or less of marijuana

4 RMJ Timeline July 1, 2013 Department of Revenue ( DOR ) shall adopt necessary regulations October 1, 2013 DOR shall begin accepting and processing license applications October 1, 2013 Localities must enact an ordinance or regulation specifying the entity within the locality that will be responsible for licensing January 1, 2014 DOR must begin issuing licenses (90-day requirement) January 1, 2014 through October 1, 2014 additional triggers under HB

5 Local Impacts of RMJ October 1, 2013 Each locality shall enact an ordinance identifying the entity responsible for licensing Local governments may enact ordinances governing time, place, manner, and number of RMJ establishments Local governments can prohibit the operation of marijuana enterprises within their local limits by passing an ordinance or by initiated or referred measure appearing on the ballot during an even numbered election year (i.e. Nov. 2014) Local governments may establish a schedule of operating fees for marijuana establishments

6 More Local Impacts of RMJ Local governments may establish civil penalties for violation of ordinances or regulations governing time, place and manner of operation DOR must provide the local government with a copy of the license application and half of the application fee ($250 or $2,500) upon receipt Local governments must notify the DOR if an applicant is not in compliance with local ordinances prior to the issuance of the state license

7 Additional Local Impacts of RMJ If the DOR does not adopt regulations required by July 1, 2013, an applicant may submit an application directly to the local government after October 1, 2013 and the local government is authorized to issue a license without the consent of the DOR If the DOR does not issue a license within 90 days of receipt, the applicant can re-apply with the local government who will have the authority to approve the license without the consent of the DOR There is no similar time limitation on the local licensing authority

8 Other Local Impacts of RMJ Licenses issued by local governments without state consent will have the same force and effect as a license issued by the DOR for the term of the license State has no jurisdiction over licenses issued by local governments, due to inaction by the State, during the term of the license

9 HB , HB and SB

10 License types established by HB Marijuana Cultivation Facility Marijuana Product Manufacturing Facility Marijuana Testing Facility Retail Marijuana Store Applicant may surrender the medical marijuana license upon issuance of retail marijuana license Applicant may opt to operate both retail and medical establishments Can only have both establishments at same location if the local jurisdiction permits it. Retail and medical stores must have a physical separation between the two establishments unless both establishments intend only to sell to persons 21 years or older.

11 Additional Consideration for Local Governments However you address retail establishments, home grows are a whole different animal May possess, use, show, buy and transport 1 ounce or less of marijuana and marijuana accessories if over 21. May possess, grow, and transport up to 6 marijuana plants (3 or fewer flowering) if over 21. Growing must take place in an enclosed locked space and not conducted openly and is not made available for sale. May not be consumed openly and publicly.

12 DOR Regulations DOR Regulations must address procedures for the issuance, renewal, suspension and revocation of a license to operate a marijuana establishment Fee schedules for application, licensing and renewal fees (the application fee shall not exceed $5,000 adjusted annually for inflation, unless DOR determines a greater fee is necessary) An entity currently licensed under the Medical Marijuana Code may not be subject to an application fee of more than $500 to apply for a license to operate a recreational marijuana establishment Qualifications for licensure to operate a RMJ establishment

13 DOR Regulations Security requirements for the operation of a marijuana establishment Labeling requirements for marijuana and marijuana products sold or distributed by a marijuana establishment Health and safety standards for the cultivation of marijuana and the manufacture of marijuana products Emergency Rule issued on the advertising and display of marijuana and marijuana products Civil penalties for the failure to comply with adopted regulations DOR must adopt regulations necessary for the implementation of Amendment 64 not later than July 1, 2013

14 Revenue and taxation HB refers a single question to the November 2013 statewide ballot with two revenue raising components: a wholesale 15% excise tax on cultivated marijuana earmarked for school capital construction and a special 10% sales tax to be imposed over and above the state s normal 2.9% sales tax. The legislature will have the ability through legislation to increase the tax. Of the special 10% sales tax revenue, 15% 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% sales tax is not earmarked by 1318 for any particular purpose

15 What s Everyone Else Doing? Complete table is available at Type of Issue Board/Council Action to Prohibit 1 33 Board/Council Action to Regulate 0 0 Board/Council Action to comply with Amendment 64: 2 11 Totals 3 44 Moratoria 6 19

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17 What should we do? Review Key decision points section of CML s Knowledge Now highlighting local authority to license and regulate RMJ establishments and the text of Amendment

18 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 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?

19 Additional considerations for local regulation might include: 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.

20 More considerations for local regulation might include: 7. Whether to establish and administer a separate local licensing requirement, 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?

21 Other considerations for local regulation might include: 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 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?

22 Even more considerations for local regulation might include: 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?

23 Still more considerations for local regulation might include: 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 establish civil penalties for violation of city requirements.

24 Seemingly never ending considerations for local regulation might include: 16. Whether to include criminal code provisions? (might consider those stripped from SB13-283) 17. 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.

25 Policy makers should consider revenue options: 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, then 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?

26 Additional questions? visit Rachel Allen Kevin Bommer (303) or (866) (toll free)