DENVER – Governor John Hickenlooper’s task force has not finalized legislation to implement voter-approved recreational marijuana, but lawmakers advanced two medical marijuana bills that may serve as model legislation for recreational cannabis retailers.
The two cannabis measures that traveled through separate House committees gained unanimous support this week from Republicans and Democrats. House Bill 1061, sponsored by state Rep. Dominick Moreno (D-Commerce City), might advance to the House floor, today.
HB 1061 would encourage legal training programs for medical marijuana industry employees. The curriculum would include instruction on state and local regulations, detecting fraudulent registration cards, and understanding legal penalties for noncompliance.
“”It’s important we have the medical marijuana establishments to be able to self regulate,” said Moreno, presenting the bill Thursday to the House Business, Labor, Economic and Workforce Development Committee.
Moreno said the training program would closely mirror a course used by establishments that sell or serve alcohol, and could be privately contracted by the vendor. The program would not be government funded or mandated.
“I support this bill because I see it as a way to really enhance our training efforts in the company,” said Kristy Kelly, founder of Good Meds that employees 40 people at three retail centers and several cultivation facilities.
“It’s an opportunity to ensure each and every one of our team members are fully in compliance,” said Kelly.
The consequences for noncompliance, she said, range from administrative hearings to fines to temporary or permanent closure of businesses.
“I take all of that seriously,” said Kelly, who added that having employees complete this course is akin to earning the “Good Housekeeping Seal of Approval.”
Morenosaid, “It’s not often you hear industries excited about self regulation, but these industries clearly are because they understand the importance of being partners in our communities.”
The committee unanimously passed HB 1061 to be heard in the House.
HB 1042, sponsored by state Rep. Daniel Kagan (D-Greenwood Village), would revise state income tax rules to allow medical marijuana retailers or pharmacies to claim deductions for operation expenses.
“The bill is about taxing medical marijuana dispensaries as legitimate businesses rather than taxing them as illegal drug traffickers,” said Kagan.
Kagan said that members of the medical marijuana industry asked him to carry the bill because their federal tax deductions last year were denied by the IRS (Internal Revenue Service) and by the state. That led to demands for payments of underestimated taxes which could amount to thousands of dollars for each vendor – and that could threaten the viability of stores.
The taxable income reported to theIRSis currently used to by Colorado which assesses a 4.63 percent state income tax. Because marijuana is illegal under federal law, deductions for operation expenses are disallowed, and consequently the gross income is taxed.
If passed, the loss of tax revenue to the state is an estimated $829,000 in the next fiscal year and $1.6 million in the following years. However, those figures don’t factor in taxes derived from retail sales of recreational marijuana.
Without a tax remedy, Kagan said that the marijuana medical pharmacies could be driven out of business and prescription holders would be forced to buy medication from illegal drug dealers.
“It’s important to me that these retail stores stay in business. I don’t want to have to go to the streets to get my medication,” said Teri Robnett of Cannabis Patient Action Network.
“They’re essentially being treated like a brothel,” said Robnett of the current federal and state tax codes. “That makes me a ‘John’ because I use their products.”
Mike Elliott, executive director of the Medical Marijuana Industry Group, said the medical marijuana retailers do not object to paying taxes, but being taxed 50 – 60 percent more than other businesses is unfair discrimination.
“We’re the most taxed industry in the United States,” declared Elliott.
The committee unanimously passed HB 1042 to the House Appropriations Committee.
“Every business should be treated the same – this is an issue of fairness,” declared state Rep. Brian DelGrosso (R-Loveland). Whether you support medical marijuana or not, he said, “it’s a legitimate industry in Colorado.”
State Rep. Kevin Priola (R-Henderson) said the bill is a “personification of states’ rights.”