DENVER – It may be time to break out the Cheetos and Goldfish – Gov. John Hickenlooper made history Tuesday by signing into law bills to implement adult recreational marijuana in Colorado. Times have changed since the November election when voters passed Amendment 64 legalizing pot – and Hickenlooper’s words of caution about celebrating munchies.
“We are going to see a very big change here and in our nation over the next several years,” said Mason Tvert, a leader in the movement to legalize marijuana in Colorado.
“Certainly this industry will create jobs. Whether it’s good for the brand of our state is still up in the air,” said Hickenlooper , who signed the bills and flew to Panama to pitch the state’s brand on a three-day economic development excursion.
Questions remain about federal laws prohibiting marijuana, voter approval of a 30 percent tax on pot products and whether the Department of Revenue is capable of overseeing retail sales after flunking an audit on medical marijuana operations.
During the bill signing, Hickenlooper said the bills to regulate marijuana are going to provide “clarity for business, increase transparency, make sure that we improve public safety, (and) in every way create common sense regulations.”
Among the bills signed into law are:
- A measure to allow business deductions for state taxes paid by marijuana growers, pharmacies and retail vendors;
- A DUI marijuana standard for driving impaired at 5 nanograms of Delta 9 THC in the bloodstream, but includes a preponderance of evidence clause to allow habitual users to argue they were not impaired;
- Regulations of the retail industry that allow purchases by adults 21 years or older, Coloradans to buy one ounce of pot from licensed retailers and limits each purchase of visitors from out of state to a quarter-ounce buy;
- Retail licenses to be accepted in October, but they will be awarded first to existing medical marijuana licensees and opened later to other potential operators, and prohibits applicants or investors from out of state;
- Vendor requirements for labeling potency of the product, child-proof packaging, and limitations for edibles such as brownies to protect children;
- A tax ballot initiative to ask voters in November to approve up to 30 percent taxes including 15 percent wholesale excise tax and 10 percent sales tax which legislators could hike to 15 percent. The products could ultimately be taxed 30 percent plus existing state and local taxes which may exceed 40 percent in taxes.
Republican legislators opposed the tax because it was too high and they warned it would not increase public safety through legal pot sales, but spur illegal sales on the black market.
If the tax measures fail, the program will move forward but the money to regulate it will be taken from the taxpayer-generated general fund which might require cuts to other programs.
Around 40 percent of the general fund currently goes to fund public education.
The Department of Revenue is to develop the regulations by July and oversee the enforcement – and that too concerned Republicans.
The audit last year of the Department of Revenue’s Medical Marijuana Enforcement Division concluded it had mismanaged $14.4 million in revenue since 2011, and failed to inspect and enforce regulations.
The Department of Revenue Director Barbara Brohl told the Legislative Audit Committee in March that Laura Harris was named new director of the Medical Marijuana Enforcement Division and problems were being resolved.
Brohl didn’t tell the committee that the division’s former Director Dan Hartman was given a new title in a different department division. She also didn’t explain what happened to over expenditures for a fleet of vehicles, computer equipment, and patio and office furnishings.
The unnecessary fleet of 21 SUVs and 11 trucks were doled out to employees in other divisions of the Department of Revenue. That may be the same scenario for the unused $15,000 in laptop computers and 22 unused Blackberry cell phones at $10,000 a year.
The division’s budget was so grossly overspent that the computer software to implement medical marijuana enforcement failed to be implemented and it forced layoffs of most staff members.
“It seems to me that we have a dysfunctional system,” said Sen. Steve King (R-Grand Junction), a member of the Legislative Audit Committee.
King’s sentiments were echoed by Republican legislators who opposed the tax increase and revenues going to the Department of Revenue to oversee the retail marijuana program.
However, Rep. Daniel Pabon (D-Denver), hailed the passage of marijuana bills and new regulations Tuesday and likened them to navigating unchartered waters by following the North Star.
“The North Star that we used was public safety and making sure we keep this out of the hands of kids, cartels and criminals.”