AGENDA AMENDMENT 64 IMPLEMENTATION TASK FORCE REGULATORY FRAMEWORK WORKING GROUP

Meeting of January 10, 2013 Beginning at 2:00 p.m. Medical Marijuana Enforcement Division 455 Sherman Street, Suite 390 Denver, CO 80203

In addition to other matters that may be considered by the Regulatory Framework Working Group, the following items are scheduled for consideration on January 10, 2013. I. Welcome and Introductions (Co-chairs)

II. Analysis of Regulatory Models: Liquor and Medical Marijuana Liquor Business Perspective (Bob Dill and Jim Shpall) Liquor Regulator Perspective (Don Burmania) Medical Marijuana Business Perspective (Meg Sanders and Norton Alrbelaez) Medical Marijuana Regulatory Perspective (Laura Harris) III. State and Local Mandates: Amendment 64 (Ron Kammerzell)

IV. State vs. Local Regulation and Enforcement (Jeremy Nemeth)

V. Categorizing Regulatory Framework Issues Identified (Co-chairs)

VI. Public Comment (limited to 2 minutes per person)

VII.

Consideration of Organizational Matters Agenda Items for Future Meetings Scheduling of Future Meetings Approval of Minutes

Meeting adjourned.

Analysis of Liquor Licensing Enforcement Regulatory Model from the Perspective of a Liquor Licensee.
By: Robert A. Dill The purpose of this memo is to provide background and information pertaining to the Liquor License Regulatory Model from a business persons perspective for the purpose of analyzing the State Liquor Code as its pertaining to a regulatory model for Amendment 64 licensing. The Liquor Code is enforced by Department of Revenue, Liquor Enforcement Division, Mr. Don Burmania is the Director. There are approximately 17 different types of liquor licenses which permit various combinations of the sale of beer, wine, and hard liquor at different types of business establishments primarily on the retail side of the industry. There are wholesale liquor license permits granted to businesses which purchase product from manufacturers and sell it to the retail industry and manufacturing industries such as beer manufacturers, spirits manufacturers, and wine manufacturers which sell primarily to wholesalers but may also in certain circumstances sell directly to the public, such as brew pub licensees and vintner licensees. The State Liquor Enforcement Division and all Local Liquor Licensing Authorities (cities and counties) may enforce any known liquor license violations in their respective jurisdictions. The primary types of violation, as it pertains to the Liquor Code, are as follows: # # # sale of alcoholic beverages to a minor sale of alcoholic beverages to a visibly intoxicated person; and sale of alcoholic beverages after hours

General licensing guidelines and information are attached as Exhibit A. The ownership restrictions for various licenses are a patchwork of regulation depending on the type of license involved. For instance, for a retail liquor store, the state permits only one retail liquor store license to be issued to any one company or persons. There are no exceptions which would allow persons to have an equity interest in more than one liquor store; various other ownership restrictions which have previously been addressed by Mr. Don Burmania are listed in the attached Exhibit B.

Analysis of Liquor Licensing Enforcement Regulatory Model from the Perspective of a Liquor Licensee January 10, 2013 Page 2

Trade practice restrictions are primarily enforced by the State Liquor Enforcement Division and pertain to regulations, promotions, and incentives between manufacturers, wholesalers, and retailers. The State Liquor Licensing Laws and Local Liquor Licensing Ordinances function very well. These laws and regulations have developed over a period of 75 years. Numerous legislative amendments and rule changes have improved the enforcability and transparency of the liquor licensing process. Local Liquor Licensing Authorities conduct hearings to determine whether or not a need or desire exists for the type of license applied for and if the determination if favorable, the state will receive an application from the Local Liquor Licensing Authority requesting that the state process and approve the license application. The state reviews the application on a limited basis to determine if the applicant is of good moral character and if all other requirements are established then the state will approve and issue the liquor license. As it relates to liquor enforcement, any alleged violation of state or local liquor laws may be prosecuted by the respective Authorities. If a licensee is determined to have violated the liquor laws, then the license may be either suspended, fined, or revoked. In the event that the licensee wishes to challenge that determination, then licensee has a right to appeal the decision of the state or local liquor licensing authorities either to the District Court where the liquor license is located or in connection with the State Licensing Authority to the Denver District Court for an ultimate determination as to the sufficiency of the evidence in favor of the action and the appropriateness of the penalty imposed upon the licensee. The regulatory model that has been established by state and local authorities is not broken. There are always certain instances and unique situations where the decision to grant or deny a license may be challenged or the decision involving a suspension or revocation of a license is an issue, but for the most part the licensees are well aware of their duties and responsibilities as it relates to compliance with local liquor laws. There are no restrictions whatsoever which prevent any person coming to the

Analysis of Liquor Licensing Enforcement Regulatory Model from the Perspective of a Liquor Licensee January 10, 2013 Page 3

State of Colorado from out of the state from owning a direct or indirect financial interest in any liquor license in the State of Colorado as long as the ownership is properly and completely disclosed with the local licensing authorities. Those members must have good moral character which would allow them to be considered as an owner of a liquor license in the State of Colorado. This system is contrary to the medical marijuana laws where persons may not immediately apply for or obtain a medical marijuana license in the State of Colorado unless they have been a resident for 2 years prior to the application for a license. Except for manufacturing, wholesaling of beer, wine, or liquor, the federal government plays very little role in the state regulatory model as it relates to issuance of local and/or state liquor licenses. The difficulty in using the Liquor License Enforcement Regulatory Model to analyze the potential regulatory issues as it pertains to the enactment of the statutory framework for Amendment 64is problematic. Issues have arisen in the course of the enforcement of the medical marijuana code that has created a very uncertain relationship between the state and federal government. The state has not control over certain key issues. Specifically, federal law prohibits individuals from growing, transferring, manufacturing, possessing, or selling medical marijuana or, in this case, recreational marijuana. No clear federal guidance other than the Ogden Memorandum, the Cole Memorandums (see Exhibit C), and recent statements by President Obama have given much comfort to medical marijuana licensees in the State of Colorado regarding legal protection from federal prosecution. The United States attorneys have discretion as it relates to the enforcement of federal laws pertaining to drug offenses. Local district attorneys have statutory authority as to whether or not to prosecute marijuana offenses for the possession of marijuana, the cultivation of marijuana, or the distribution of marijuana. As it relates to banking relationships for medical marijuana businesses and recreational marijuana businesses the Federal Deposit Insurance Corporation has notified federal chartered banks that they should not and cannot accept deposits from

Analysis of Liquor Licensing Enforcement Regulatory Model from the Perspective of a Liquor Licensee January 10, 2013 Page 4

illegal sources such as marijuana businesses and if they do they will risk losing their status as a federally insured institution. As it relates to federal and state income tax liability, most business deductions or expenses incurred in the ordinary course of the business by a medical marijuana licensee are disallowed. Section 280E of the Internal Revenue Code precludes businesses which sell medical marijuana from deducting reasonable and ordinary business expenses incurred in the business except for expenses related to the growing of marijuana. The IRS relies on the principle that the business consists of trafficking in a controlled substance and as a result a number of cases have ruled against the taxpayers resulting in significantly increased tax liability for this business. See Californians Helping to Alleviate Medical Problems, Inc. vs. Commissioner, 128 T.C. 173 and Olive v. C.I.R., 139 T.C. No. 2, 2012 WL 3137839 U.S.Tax Ct.,2012. The government and the tax court have determined that medical marijuana is controlled substance under Section 280E in the Champ case, 128 T.C. at 181, and Gonzalez v. Raich, 545 U.S. 1, and United States v. Oakland Cannabis Buyers' Coop., 532 U.S. 483. Congress and the Tax Court recognize that Section 280E precludes a taxpayer from deducting expenses incurred in the medical marijuana business even if the business is legal under state law.

1/10/2013

LIQUOR LICENSING & ENFORCEMENT IN THE STATE OF COLORADO

Colorado Liquor & Tobacco Enforcement Division January 2013

Dual Licensing Authorities

Local Licensing Authority Roles
City - City Council / Licensing Board / Hearing Officer 5(e) County - Board of County Commissioners 5(e) Deny, Issue, Suspend, or Revoke Retail Licenses, Temporary Permits for Transfers, Special Permits 5(e), 3(d) Establish community standards ~ Reasonable requirements ~ Adult needs and desires ~ Distance restrictions ~ Undue concentration (taverns & liquor stores only) 5(f) Conduct public hearings ~ Public posting requirements ~ Parties in interest testimony Enforcement at the local level

1/10/2013

Dual Licensing Authorities

State Licensing Authority Roles
Review licenses issued by Local Authorities before issuing State license ~ Can only deny based on premises not meeting requirements, character of applicant(s), or needs of locality adequately met by existing licenses Act as Local Licensing Authority for licenses on State-owned property Deny, Issue, Suspend, or Revoke State-Issued Licenses, Special Events Permits, and Reports of Changes Promulgate Liquor Regulations through rulemaking process Collect sales and excise taxes Enforce Colorado Liquor Code and Regulations on statewide basis

Liquor License Types

Local-Issued Licenses
Off-Premise Retail Licenses ~ Retail Liquor Store ~ Liquor Licensed Drug Store On-Premise Retail Licenses ~ Arts ~ Beer & Wine ~ Brew Pub ~ Club License ~ Hotel & Restaurant ~ Optional Premises ~ Racetrack ~ Resort Complex ~ Retail Gaming Tavern ~ Tavern ~ Vintners Restaurant Retail 3.2% Beer Licenses ~ Off-Premise ~ On-Premise ~ Combined On- and Off-Premise Local-Approved Special Permits Temporary Permits for Transfer Applications ~ Marijuana Cultivation Facility ~ Marijuana Product Manufacturing Facility ~ Marijuana Testing Facility ~ Retail Marijuana Store

1/10/2013

Liquor License Types

State-Issued Licenses, Permits & Reports of Changes
All Local-Issued License Types Manufacturer Licenses ~ Brewery ~ Distillery & Rectifier ~ Limited Winery ~ Winery ~ 3.2% Beer ~ Non-Resident Manufacturer (Malt Liquor and 3.2% Beer) Wholesaler & Importer Licenses ~ Malt Liquor ~ Vinous & Spirituous ~ 3.2% Beer Public Transportation License Alternating Proprietor Premises Permits ~ Art Gallery ~ Bed & Breakfast ~ Retail Warehouse Storage ~ State-Issued Special Event ~ Wholesale Branch Warehouse ~ Wine Delivery ~ Wine Festival Reports of Changes ~ Modification of Premises ~ Change of Location ~ Change of Trade or Corporate Name ~ Corporate Structure Change ~ Limited Liability Change ~ Manager Registration Master Files (Business & Individual)

Three-Tier Structure
1. Manufacturer Tier (Cultivation/Product Manufacturer Facilities) 2. Wholesaler/Supplier Tier 2. Retailer Tier

Statutory Financial Interest Restrictions ~ Prohibits first two tiers from having financial interest in Retailer tier Unfair Trade Practices and Competition Regulations ~ Restricts trade practices that can be construed as financial interests to prevent influence and control by first two tiers over Retailer tier

1/10/2013

Financial Restrictions

Unfair Trade Practices & Competition

No sales to retailers below laid-in cost Restrictions on on-site sales promotions Restrictions on retailer entertainment Restrictions on samples for retailers Consignment sales prohibited Limits on lawful product returns Free warehousing for retailers prohibited Indirect financial assistance through third-party arrangements prohibited No credit extended beyond 30 days Specific list of consumer advertising specialties that can be provided Specific list of point-of-sale advertising materials that can be provided Restrictions on media advertising Restrictions on signs and displays that can be provided free of charge

1/10/2013

Underage Compliance
Use of underage operatives ~ Between 18-20.5 years of age ~ Use own valid vertical ID Responsible Vendor Program ~ Approved training programs ~ Established criteria ~ For all selling/serving employees ~ At least two hours of instruction time ~ Re-certification every three years Minor-in-possession operations ~ Sporting events ~ Entertainment venues

Enforcement Inspections
Licenses/permits posted Minor warning sign posted Meals or snacks available Cleanliness adequate Books and invoices available Beer, wine & liquor stock acceptable Alcohol purchased from permitted sources Compliance with gambling restrictions Manager registered with authorities Licensee in possession/control of premises Trade name properly registered Compliance with intoxicated sale restrictions Age requirements to sell or serve alcohol beverages Acceptable dispensing systems Off-premise storage licensed Removal of alcohol beverages from premises Only permitted items sold Permitted sales hours

1/10/2013

RegulatoryWorkingGroup
Howthecurrentmedicalmarijuanalaw promotespublicsafety,ensures transparencyandlegitimacy,andprotects theinterestsofbusinessowners,employees andpatients.

GeneralBackgroundInformation
WhentheGeneralAssemblyImplementedtheCode,it soughttocreateaverticallyintegratedclosedloop commercialmedicalmarijuanaregulatoryschemeby:
(1)theformationofaduallicensingsystemwithalocaloptout provision; (2)theestablishmentofsuitabilitystandardsforownershipand employmentbasedonColoradoresidencyandadetermination ofgoodmoralcharacter; (3)thepromulgationofasetofminimumsecurity,surveillance, andreportingrules;and (4)requirementsaimedatensuringpublicsafety,facilitatingfull operationaltransparency,andeliminatingillicitdiversionof marijuana. 1CCR2121Rules

1/10/2013

ColoradoResidencyRequirements
Owners/Investors

Policy 2yearresidency requirementforowners Createdtokeep product,money,and ownership responsibilitiesinthe stateofColorado.

Whyitworks StatesRights 10th Amendment Statesas Laboratoriesof Democracy AvoidRICOscrutiny

1/10/2013

BackgroundChecks

BackgroundChecks
Policy Owners/Investors/Empl oyees Occupationallicenses required Fingerprinting FelonsProhibited Reportingcriminal actions WhyItWorks Legitimacy Accountability Transparency Worksintheinterestof publicsafety

1/10/2013

FinancialTransparency
Policy Requiresindustry capitalcomesfrom legal,verifiablesources. Whyitworks Accountability Legitimacyoffunding Responsibleowners Publicsafety

LicensingStructure
Policy Parityforexisting businesses Cleardefinitionof licenselevels Whyitworks Allowsownersto operateatalicensing levelthatmatchestheir businessmodel

1/10/2013

VerticalIntegration
Policy Requireaconnectionbetween retailandgrow. Wholesalelimit Whyitworks chainofcustodyofproduct vitaltopreventdiversion. Efficientproducttracking system. Commonownershipofgrow andretailpromotes accountability. Wholesalelimitsworkbetter thanartificialcapson productionandprevents diversion. Avoidspitfallsofstateslike California.

InventoryTracking

1/10/2013

InventoryTracking
Policy SeedtoSaletracking PlantCount ProductBatching TransportationManifest Whyitworks Accountability ProtectsEmployees Detersdiversion Worksintheinterestof publicsafety AssistsLaw Enforcement

SecurityRequirements
Policy LimitedAccessAreas SecurityAlarmSystems LockStandards VideoSurveillance Whyitworks Protectsemployees Protectspatients Accountability AssistsLaw Enforcement Investigations

1/10/2013

MIPStructure
Policy Labelingrequirements: Ingredients,chemical additives,identity statement,netweight etc. Packagingrequirements Whyitworks Trackingofproduct Protectstheconsumer Addressespublicsafety concerns

Whatisntworking
Communications
Betweencityandstatelicensingauthorities Withlocalandstatelawenforcement
manifests,badges

DualLicensing
Cumbersomebackandforthprocess

Monthly/DailyReportingRequirements
BurdenforBusinessesandMMED

PatientCards
PatientsandBusinessesareeffected

1/10/2013

Whatisntworkingcontd.
NoTestingRequirements
Notconsistent,notregulated,marketingploy

Delays
ImplementationofHB1043 EmployeeLicensingandBadges

UnregulatedGrowers
Largethreatthathasbeenignored.

Colorado Department of Revenue Medical Marijuana Enforcement Division

Forms Packet Revised August 1, 2011

This Packet contains information and revised forms to give Applicants guidance necessary for compliance to rules which are effective July 1, 2011. Additionally, we have provided documents that you may choose to use or you may use as an indication of what records or data you are expected to keep in order to be in compliance. You may already capture this information and can generate a report and therefore the use of the specific MMED form may not be necessary. This is a work in progress and any one of these forms may be modified in the future, so please ensure you are using the current version of the form by checking our web site dates posted will be reflected next to the link to the form. Specifically, the form revisions include: additional instructions, removal of unnecessary information and clarification of required information. If you have already submitted the old version of the forms, you do not have to resubmit them, but please use the new forms going forward. All Center, Infused Product Manufactures and Cultivation businesses are required to submit two forms on a monthly basis: their employee list (form 1000) and patient list (form 1010). If your employees have not obtained their licenses prior to submittal of this list enter pending on the License Number column. The employee list and patient lists must be submitted to the MMED on a monthly basis thereafter. Please do not submit any personal data about patients; include only the fields shown on the forms. In addition, effective July 1, 2011, all centers must use the Medical Marijuana Transportation Manifest Form (form 1020), the Employee Status Change Form (form 1030), and the Patient Status Change Form (form 1040). See Form Matrix or individual forms for more detailed instructions. The past few weeks we have had two issues that have been legitimate problems for businesses trying to come into compliance and the MMED has determined to make accommodations which do not affect our regulation capabilities. Those accommodations are: Rule 10.400.B.3. Specific Standards, IP Camera Table Housing Rating) After consideration of concerns from the industry, an accommodation for Exterior Fixed Cameras to move from a Housing Rating of IP67 to an IP66 is allowed with the understanding that we may require the installation of a Heater and/or Blower on each camera affected, should the functionality be below our standards. Rule 10.400.B.4.g. The 9600 dpi requirement has been reinterpreted to read The licensee must be able to immediately produce a clear color still photo from any camera image (live or recorded). Each facility shall have a minimum of one color printer that produces a high quality, recognizable image of video surveillance images As we have had before and will say again, we focused on building a fair, unambiguous and transparent regulatory system for the Colorado Medical Marijuana Industry and we appreciate your willingness to work with us as we all move forward together. Form may be faxed to 303-205-2398 or emailed to mmedmanifest@dor.state.co.us. If you email the forms, please put the form name in the subject line. Manifest forms must be emailed separately from other forms.

MMED August 1, 2011

MMED investigators will soon begin visiting Medical Marijuana Centers (MMCs), Optional Premise Cultivations (OPCs) and Marijuana Infused Product (MIPs) establishments to conduct inspections for licensing. Listed below is a list of some of the areas of concern that investigators will be focusing on. This list is not all-inclusive. All Medical Marijuana industry owners and employees are encouraged to become thoroughly familiar with all provisions of the statutes and rules promulgated by the State Licensing Authority. The rules promulgated by the state licensing authority go into effect on July 1, 2011. The MMED investigators will be conducting both announced and unannounced visits on establishments throughout Colorado.

Limited Access Areas identified (proper signs posted) Properly displayed license(s) (local & state-issued medical marijuana licenses and sale tax license(s) as well as any other required license(s) All employees displaying proper MMED-issued credentials MMED investigators will be making observations regarding on-premise use of cannabis by patients and/or employees Security Alarm System, which is compliant with MMED rules Commercial-grade, non-residential locks, which are compliant with MMED rules Video surveillance of all required areas, including areas where marijuana is possessed, stored, grown, harvested, cultivated, cured, and sold; entrances and exits with logging, and limited access to equipment, compliant with MMED rules List of all licensed employees Diagram of licensed area Proper record-keeping of patients and inventory related to patients (both plant count and finished product). Ability to demonstrate compliance with 70%-30% rule Proper record-keeping of all sales (both to primary patients and other sales to nonprimary patients) Employees conform to hygienic practices Preparation areas; surfaces, utensils and equipment are adequately cleaned and kept clean Inspection of cleaning compounds, sanitizing agents, pesticides and insecticides to ensure that no banned and / or hazardous chemicals are on the premise Waste is stored and secured in a manner which is compliant with MMED rules Waste that is rendered unusable should be grinded with non-consumable solid waste and disposed of, which is compliant with MMED rules All product is properly labeled and identified for retail sales Labeling standards from 7/1/11 rules must be met Complete all sales between 8:00AM and 7:00PM (7:05PM is not acceptable) Do not transport Medical Marijuana without a MMED approved Manifest in place

Additional information can be found at: http://www.colorado.gov/cs/Satellite/Rev-Enforcement/RE/1251575119584

MEDICAL MARIJUANA ENFORCEMENT DIVISION FORM MATRIX

INSTRUCTIONS: Required forms must be faxed (303-205-2398) or emailed to mmedforms@dor.state.co.us. If you email the forms, please put the form name in the subject line. Manifest forms must be emailed separately from other forms. If you have already submitted the required information on forms previously published, you do not need to resubmit information on the revised forms. However, please use the new forms after August 1, 2011. Unless otherwise stated, Licensees do not have to use the form templates provided by the MMED. If Licensees have systems or procedures that capture the same information in the form templates, they can submit/retain the required information in their own formats. Licensee signatures are not required on the forms, but when Licensees provide a form or report to the MMED, they are attesting that the information provided is complete and accurate to the best of their knowledge. Records must be kept for three years prior to the current year. MMED Submit to Form MMED or Statute / Rule Maintain on Frequency of Required? Form (2) Instructions Reference Site? Audience Submission Number Form Name Provide the required information for all employees, including non-employee owners, that work at your facility. If an employee does not yet have a license number, put "Pending." The list is due by the fifth business day of the month and Licensees must report their employee list as of the last day of the prior month (the reporting month). For example, on Sept 5, Licensees are required to submit their employee list as of Aug 31. Licensees must submit the Employee Status Change Form (Form 1030), when required, within 10 business days to the MMED. Provide the required information for patients who have designated you as their Primary Center. Do NOT submit any additional patient information. For patients who do not have a license number yet, put "Pending." If a patient is authorized for more than 6 plants, maintain, but do not submit, supporting documentation for additional plants. The list is due by the fifth business day of the month and Licensees must report their patient list as of the last day of the prior month (the reporting month). For example, by Sept 5, Licensees are required to submit their patient list as of Aug 31. Licensees must submit the Patient Status Change Form (Form 1040), when required, within 72 hours to the MMED.

Employee List 1000 (Monthly)

Submit

OPCs, MMCs, Monthly (see MIPs instructions)

No

C.R.S. 12-43.3310 (2) & (4)

Primary Center Patient 1010 List (Monthly) Submit

MMCs

Monthly (see instructions)

No

C.R.S. 12-43.3901(4)(e), and MMED Rule 1.205.A.1

Transportation 1020 Manifest Form

Submit

Employee Status 1030 Change Form

Submit

24 hours OPCs, MMCs, before MM is MIPs transported Yes Within 10 business days OPCs, MMCs, of employee MIPs status change No Within 72 hours of patient status change No

C.R.S. 12-43.3202(2)(a)(XI) Provide the required information, submit the form to the MMED, and wait 24 hours for approved (stamped) copy to be returned to you. Drivers must use this exact form because law enforcement will expect to see this and MMED Rule 11.200.D exact form. See FAQs for more information. C.R.S. 12-43.3Provide the required information when there is a change in employee status. This form must be submitted to 901.3.d, 12-43.3the MMED within 10 business days of the change. Also update Form 1000 accordingly for submission by the 310.3, 12-43.3310.12 fifth business day of the next month. Provide the required information when there is a change in patient status. This form must be submitted to the MMED within 72 hours of the change. Also update Form 1010 accordingly for submission by the fifth MMED Rule business day of the next month. 1.200 C.R.S. 12.43.3202.2.x, MMED Rules 10.400.B.1.c & 10.400.B.1.g Maintain completed form and system lay-out for each business location. This report aggregates data from Forms 1010, 1070 and 1120 to show compliance with the 30% wholesale requirement and the two ounce limit per patient. Using 12-month averages, wholesales transactions as a percentage of inventory must be under 30% in order to be compliant. In addition, monthly average inventory C.R.S. 12-43.3cannot exceed two ounces per patient. The 30% requirement applies only to MMCs and excludes live plants 402.4, MMED Rule 1.210 (A-E) as part of average on-hand inventory. This report aggregates data from Forms 1080, 1090 and 1100 and calculates monthly totals for transfers, C.R.S. 12-43.3patient sales and wholesales transactions. 701 (1-3) Enter the weight (in grams) of wholesales transactions. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude wholesale transactions of C.R.S. 12-43.3701 (1-3) live plants. The daily total is calculated and carried to form 1070. Enter the weight (in grams) of transfers. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude transfers of live plants. The daily total is C.R.S. 12-43.3calculated and carried to form 1070. 701 (1-3) Enter the weight (in grams) of patient sales. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude sales of live plants. The daily total is C.R.S. 12-43.3calculated and carried to form 1070. 701 (1-3)
MMD form rev 7/2011

Patient Status Change 1040 Form Submit

MMCs

1050 Secure Facility Form

Maintain

OPCs, MMCs, MIPs N/A

No

30% Compliance 1060 Report Transfers, Sales, 1070 Purchases Report Wholesale 1080 Transaction Report Transfers from OPC 1090 Report

Maintain Maintain

MMCs N/A OPCs, MMCs, MIPs N/A OPCs, MMCs, MIPs N/A

No No

Maintain

No

Maintain

MMCs, MIPs

N/A

No

1100 Patient Sales Report

Form Matrix

Maintain

MMCs

N/A

No

MEDICAL MARIJUANA ENFORCEMENT DIVISION FORM MATRIX

INSTRUCTIONS: Required forms must be faxed (303-205-2398) or emailed to mmedforms@dor.state.co.us. If you email the forms, please put the form name in the subject line. Manifest forms must be emailed separately from other forms. If you have already submitted the required information on forms previously published, you do not need to resubmit information on the revised forms. However, please use the new forms after August 1, 2011. Unless otherwise stated, Licensees do not have to use the form templates provided by the MMED. If Licensees have systems or procedures that capture the same information in the form templates, they can submit/retain the required information in their own formats. Licensee signatures are not required on the forms, but when Licensees provide a form or report to the MMED, they are attesting that the information provided is complete and accurate to the best of their knowledge. Records must be kept for three years prior to the current year. MMED Submit to Form MMED or Statute / Rule Maintain on Frequency of Required? Form (2) Instructions Reference Site? Audience Submission Number Form Name MMC Licensees are required to record the grams of Medical Marijuana on their premises every day that they are open to the public. Licensees should record their on-hand inventory when the MMC is closed (i.e., when product is not moving in or out of the facility). Include only the net grams of Medical Marijuana (i.e., exclude weights of containers and packaging). For infused products, include only the grams of Medical Marijuana in the product. Plants are not considered inventory for the 30% requirement. Licensees can either do a physical inventory count (i.e., physically weigh the product) every day, or they can rely on their POS system for inventory data. If the Licensees do not have a POS system, they can calculate their ending inventory (e.g., C.R.S. 12-43.3beginning inventory + purchases and transfers in - sales and transfers out = ending inventory). The average 402.4, MMED Rule 1.210 (A-E) monthly inventory will be carried to Form 1060.

MMC Inventory Count 1120 Sheet Maintain

MMC

N/A

No

Form Matrix

MMD form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION EMPLOYEE LIST

Enter business licensee name

Business Licensee Name Business Licensee / Application Number

Enter business licensee/application number Enter month reporting

Reporting Month

INSTRUCTIONS: Provide the required information for all employees, including non-employee owners, that work at your facility. If an employee does not yet have a license number, put "Pending." The list is due by the fifth business day of the month and licensees must report their employee list as of the last day of the prior month (the reporting month). For example, on Sept 5, licensees are required to submit their employee list as of Aug 31. Licensees must submit the Employee Status Change Form (Form 1030), when required, within 10 business days to the MMED.

Employee License #

Employee Last Name

Employee First Name

Enter employee Medical Marijuana Key or Support license #.

Enter Employee Last Name

Enter Employee First Name

TOTAL EMPLOYEE COUNT

MMED form rev 7/2011 Form 1000

MEDICAL MARIJUANA ENFORCEMENT DIVISION EMPLOYEE STATUS CHANGE FORM

The purpose of this document is to notify the Medical Marijuana Enforcement Division of status changes for the employee of my business as listed below:

INSTRUCTIONS: Provide the required information when there is a change in employee status. This form must be submitted to the MMED within 10 business days of the change. Also update Form 1000 accordingly for submission by the fifth business day of the next month.

Business Name
Enter legal business name

Business License Number

Enter business Medical Marijuana registration license number

Date
Enter effective date of change

Employee License Number

Enter employee Key or Support license number

Employee Last Name

Enter employee's last name

Employee First Name

Enter employee's first name

Change of Status - check all that apply

Name Change Please Explain:
List details of change marked above (Name Change, New Hire, etc.). Include old information and new information where applicable.

Employee License Number Change

New Hire

Terminated Employee

Other

MMED form rev 7/2011 Form 1030

MEDICAL MARIJUANA ENFORCEMENT DIVISION MONTHLY PRIMARY CENTER PATIENT LIST

Enter month reporting

Reporting Month
Enter business licensee name

Business Licensee Name

Enter business license/application number

Business Licensee /Application Number INSTRUCTIONS: Provide the required information for patients that have designated you as their Primary Center. Do NOT submit any additional patient information. For patients that do not have a license number yet, put "Pending." If a patient is authorized for more than 6 plants, maintain, but do not submit, supporting documentation for additional plants. The list is due by the fifth business day of the month and Licensees must report their patient list as of the last day of the prior month (the reporting month). For example, by Sept 5, licensees are required to submit their patient list as of Aug 31. Licensees must submit the Patient Status Change Form (Form 1040), when required, within 72 hours to the MMED.

Please submit ONLY the fields shown on this form. Do NOT send any other personal information about patients.

Patient ID Number
Enter patient ID number from registry card

Patient Card Expiration Date

Enter patient card expiration date

Primary Center Designation Date

Enter effective date of primary center designation

Maximum Plants Per Patient *

Enter maximum number of plants authorized for patient

Total Patient Count Total Plant Count

enter total number of patients enter total of maximum number of plants authorized for patients listed on this report

MMED form rev 7/2011 Form 1010

MEDICAL MARIJUANA ENFORCEMENT DIVISION PATIENT STATUS CHANGE FORM

The purpose of this document is to notify the Medical Marijuana Enforcement Division of status change(s) for the patient of my business as listed below:
Enter date form is completed Enter date change is effective

Today's Date

Effective Date

Enter business licensee name

Business Licensee Name

Enter business licensee/application number

Business Licensee /Application Number

INSTRUCTIONS: Provide the required information when there is a change in patient status. This form must be submitted to the MMED within 72 hours of the change. Also update Form 1010 accordingly for submission by the fifth business day of the next month.

Patient ID Number
Enter ID # from patient's card

Patient Card Expiration Date

Enter patient card expiration date

Primary Center Designation Date (1)

Enter primary center designation date.

Status Change
(e.g. ID #, plant limit, Primary Center designation, etc.).
Enter status change details

Date of Primary Center Designation Change Notification # of Plants for this (2) Patient (3)
Enter date of notification Enter # of plants for patient

Please Explain Status Change Below:

Provide additional information necessary to clarify or document patient status change or plant # if it exceeds six.

(1) If the patient is changing primary centers, enter the date of the change. Patients cannot change their primary center if they have designated another center as their primary center within the past 120 days. (2) If the patient is changing primary centers, the new center must notify the old center of the change within 72 hours. The old center must remove the patient from its primary patient list. The patient's plants at the old center can be assigned to other patients or allowed to continue to harvest, but the old center cannot plant new plants for the patient. (3) For each patient with a plant count greater than 6, the licensee must maintain additional documentation from the recommending physician as required per C.R.S 12-43.3-901(4)(e). Do not submit the additional documentation to the MMED.

MMED form rev 7/2011 Form 1040

MEDICALMARIJUANAENFORCEMENTDIVISION MEDICALMARIJUANATRANSPORTATIONMANIFEST
AllsalestransactionsaretobecompletedpriortotransportationofanyMedicalMarijuana.Thereceivingentitymayrejectproductdelivered,butamountdelivered mustbelimitedtoamountagreeduponinpriorsalestransaction.IfthepersontranportingMedicalMarijuanahasnotyetreceivedhisorheroccupationallicense number,put"Pending"intheappropriatefield.

EmailcompletedformtoMMEDmanifest@dor.state.co.usorfaxto3032052398
DateCompleted: NameofOriginatingEntity: License#ofOriginatingEntity:
ForMMEDUseOnly

AddressofOriginatingEntity:

Phone#ofOriginatingEntity:

Fax#WhichApprovedMMEDCopyistoBeSent (N/Aifemailing): Phone#MMEDCanCallwithQuestions:

Ifyouaredeliveringmorethan17productstoonestop,usethespaceforthenextstoptocontinuelistingproducts.Forsmokableproduct,enterthegramsof MedicalMarijuanainthe"Weight/Quantity"field.Forinfusedproduct,enterthequantity(i.e.,itemcount)inthe"Weight/Quantity"field.Youdonothaveto includethegramsofMedicalMarijuanaininfusedproducts. Checkhereifmultiplepagesareused.Listthetotalnumberofpagesinthemanifesthere_____. StopNumberonRoute: NameofDestinationEntity: LicenseNo.ofDestinationEntity: AddressofDestinationEntity: Phone#ofDestinationEntity: DateandApproximateTimeof Departure: DateandApproximateTimeof Arrival: ItemDescription Weight/Quantity

RoutetoBeTraveled:

Notes:detailsforextenuating circumstances(e.g.,roadclosure, flattire,etc.) PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove. ) NameofPersonReceivingor Date: RejectingProduct: Iconfirmthatthecontentsofthisshipmentmatchweightrecordsenteredabove,andIagreetotakecustodyofthoseportionsofthisshipmentnot circledabove. Thoseportionscircledwerereturnedtotheindividualdeliveringthisshipment. Signature: Signatureofindividualtakingreceiptofrejectedportionofthisshipment: NameofPersonTransporting: SignatureofPersonTransporting Make,Model,LicensePlate# OccupationalLicense#ofPerson Transporting DateofSignature:

Form1020

MMEDFormrev9/2011

MEDICALMARIJUANAENFORCEMENTDIVISION MEDICALMARIJUANATRANSPORTATIONMANIFEST
StopNumberonRoute: NameofDestinationEntity: LicenseNo.ofDestinationEntity: AddressofDestinationEntity: Phone#ofDestinationEntity: DateandApproximateTimeof Departure: DateandApproximateTimeof Arrival: ItemDescription Weight/Quantity

RoutetoBeTraveled:

Notes:adddetailsforextenuating circumstances(e.g.,roadclosure, flattire,etc.) PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove. ) NameofPersonReceivingor Date: RejectingProduct: Iconfirmthatthecontentsofthisshipmentmatchweightrecordsenteredabove,andIagreetotakecustodyofthoseportionsofthisshipmentnot circledabove. Thoseportionscircledwerereturnedtotheindividualdeliveringthisshipment. Signature: Signatureofindividualtakingreceiptofrejectedportionofthisshipment: StopNumberonRoute: NameofDestinationEntity: LicenseNo.ofDestinationEntity: AddressofDestinationEntity: Phone#ofDestinationEntity: DateandApproximateTimeof Departure: DateandApproximateTimeof Arrival: ItemDescription Weight/Quantity

RoutetoBeTraveled:

Notes:adddetailsforextenuating circumstances(e.g.,roadclosure, flattire,etc.) PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove. ) NameofPersonReceivingor Date: RejectingProduct: Iconfirmthatthecontentsofthisshipmentmatchweightrecordsenteredabove,andIagreetotakecustodyofthoseportionsofthisshipmentnot circledabove. Thoseportionscircledwerereturnedtotheindividualdeliveringthisshipment. Signature: Signatureofindividualtakingreceiptofrejectedportionofthisshipment:
Form1020 MMEDFormrev9/2011

Medical Marijuana Enforcement Division Secure Facility Form

All Medical Marijuana Businesses operating with the State of Colorado must install security/video surveillance systems in each business location. Attach system lay-out to this form. Licensees must maintain completed form and attachments. Do not submit to the MMED.

Date Submitted: Business Name:

LICENSED BUSINESS INFORMATION License Number:

Physical Address:

Owners Name and Contact Information:

SECURITY VENDOR (IF OUT-SIDE CONTRACTOR USED) Business Name: Responsible Party or Owner: Address:

Phone Number: SYSTEM SPECIFICS IP Access Address for MMED Access to Surveillance System: DVR or NVR Product Used (Manufacturer and Model Number) : Location of Off-Site Security Video Storage:

Name of 24 Hour Contact for Business: (include: Landline; cell phone; email address; home location if available)

Form 1050

Revised 070111

MEDICAL MARIJUANA ENFORCEMENT DIVISION 30% COMPLIANCE REPORT For the 12 Months Ending (add month and year)
Business Licensee Name: Business Licensee Number:
INSTRUCTIONS: This report aggregates data from Forms 1010, 1070 and 1120 to show compliance with the 30% wholesale requirement and the two ounce limit per patient. Using 12-month averages, wholesales transactions as a percentage of inventory must be under 30% in order to be compliant. In addition, monthly average inventory cannot exceed two ounces per patient. The 30% requirement applies only to MMCs and excludes live plants as part of average on-hand inventory.

Inventory Information (in grams)

Average Daily Inventory On-Hand (From Form 1120) Wholesale Sales (From Form 1070) Wholesale Purchases (From Form 1070) Wholesale Sales as % of On-Hand Inventory Wholesale Purchases as % of On-Hand Inventory

Jul-11
-

Aug-11
-

Sep-11
-

Oct-11
-

Nov-11
-

Dec-11
-

Jan-12
-

Feb-12
-

Mar-12
-

Apr-12
-

May-12
-

Jun-12
-

Avg
#DIV/0! #DIV/0! #DIV/0!

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Inventory Maximums
Total Number of Primary Patients (From Form 1010) Maximum On-Hand Inventory (ounces) Maximum On-Hand Inventory (grams) Average Daily Inventory On-Hand (From Form 1120) na na na na

On-Hand Inventory (Under) Maximum

Over na

Form 1060

MMD form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION PHYSICAL INVENTORY SHEET FOR MMCs

INSTRUCTIONS: MMC Licensees are required to record the grams of Medical Marijuana on their premises every day that they are open to the public. Licensees should record their on-hand inventory when the MMC is closed (i.e., when product is not moving in or out of the facility). Include only the net grams of Medical Marijuana (i.e., exclude weights of containers and packaging). For infused products, include only the grams of Medical Marijuana in the product. Plants are not considered inventory for the 30% requirement. Licensees can either do a physical inventory count (i.e., physically weigh the product) every day, or they can rely on their POS system for inventory data. the Licensees do not have a POS system, they can calculate their ending inventory (e.g., beginning inventory + purchases and transfers in - sales and transfers out = ending inventory). The average monthly inventory will be carried to Form 1060. Business Licensee Name: Business Licensee / Application Number: Strain 1 (e.g., AK-47) Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12 Day 13 Day 14 Day 15 Day 16 Day 17 Day 18 Day 19 Day 20 Day 21 Day 22 Day 23 Day 24 Day 25 Day 26 Day 27 Day 28 Day 29 Day 30 Day 31 * Carries to Form 1060
Form 1120

Strain 2 (e.g., Purple Kush)

Strain 3 (e.g., Bubblegum)

MIP 1 (e.g., Brownies)

MIP 2 (e.g., Soda)

Add columns as necessary

Monthly Avg*

TOTAL #DIV/0!
MMED form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION TRANSFERS, SALES, AND PURCHASES MONTHLY SUMMARY

INSTRUCTIONS: This report aggregates data from Forms 1080, 1090 and 1100 and calculates monthly totals for transfers, patient sales and wholesales transactions.
Enter Reporting Month

Month*: Business Licensee Name Business Licensee Number

Enter Business Licensee Name

Enter Business Licensee/Application number

Date
Enter Transaction date
(NA if no transactions for the day)

Transfers from OPC (in grams)

Enter total grams transferred from the Transfers from OPC Daily Summary Report (form 1090)

Patient Sales (in grams)

Enter total grams sold to patients from the Patient Sales Daily Summary Report (form 1100)

Wholesale Purchases (in grams)

Enter total grams of wholesale purchases from the Wholesale Transaction Daily Summary Report (form 1080)

Wholesale Sales (in grams)

Enter total grams of wholesale sales from the Wholesale Transaction Daily Summary Report (form 1080)

Monthly Totals**

* Reporting month is defined as the month for which you are reporting your information. For example, if you are submitting information for July, July is your reporting month. ** Monthly totals should tie to the 30% Compliance Check Report (form 1060)

Form 1070

MMED form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION WHOLESALE TRANSACTION REPORT Daily Summary

INSTRUCTIONS: Enter the weight (in grams) of wholesales transactions. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude wholesale transactions of live plants. The daily total is calculated and carried to form 1070.
Enter date of transactions

Date
Enter business licensee name

Business Licensee Name

Enter business licensee/application number

Business Licensee /Application Number This form is to be used for all Wholesale Transactions: Purchases and Sales. Weight Quantity Purchased (in grams) Weight Quantity - Sales
(in grams)

Transaction Number
Enter transaction number as assigned by licensee

Strain
Enter strain

Batch #
Enter batch number

Employee License #
Enter employee License #

Employee Initials
Enter employee initials

Enter quantity purchased in grams Enter quantity purchased in grams

Daily Totals * Daily totals should tie to the Transfers, Sales, and Purchases Summary (form 1070) -

Form 1080

MMED form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION PATIENT SALES REPORT Daily Summary

INSTRUCTIONS: Enter the weight (in grams) of patient sales. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude sales of live plants. The daily total is calculated and carried to form 1070.
Enter date of sales

Date
Enter Business Licensee Name

Business Licensee Name

Enter Business License/Applicant #

Business Licensee /Applicant Number

Weight Quantity
Transaction Number
Enter transaction number as assigned by licensee

Patient ID Number
Enter Patient Registry #

Strain
Enter strain description

Batch #
Enter batch #

(in grams)
Enter quantity

Employee License Number

Enter employee License #

Employee Initials
Enter employee initials

Daily Total * Daily total should tie to the Transfers, Sales, and Purchases Summary (form 1070)

Form 1100

MMED form rev 7/2011

MEDICAL MARIJUANA ENFORCEMENT DIVISION TRANSFERS FROM OPC REPORT Daily Summary

INSTRUCTIONS: Enter the weight (in grams) of transfers. For infused products, include only the weight of Medical Marijuana in the product. If the strain is unknown, leave blank. Exclude transfers of live plants. The daily total is calculated and carried to form 1070.

Business Licensee Name Business Licensee # Date of Transfer Employee License # (from OPC) Employee License # (Center or MIP)

Strain

Product Description

Batch #

Weight Quantity (in grams)

Employee Initials

Employee Initials

Enter information and amounts of Medical Marijuana (in grams) or number of plants transferred from the Grow to the Center

Daily Total

* Daily total should tie to the Transfers, Sales, and Purchases Summary (form 1070)

Form 1090

MMED form rev 7/2011

1/10/2013

Laura Harris Director

Business and Occupational Licensing Monitoring Enforcement Licensee Reporting Requirements Funding

1/10/2013

WHAT WORKS

WHAT DOESNT (?)

Dual-authority concept Local responsibility for matters unique to the community State responsibility for matters of state-wide concern

Businesses allowed to operate prior to licensure Local approval as a condition precedent to state issuance Redundant efforts by state and local authorities Local and state standards not uniform

WHAT WORKS

WHAT DOESNT(?)

Ensuring that key personnel have no criminal background Local responsibility for persons working in the community

Over-reach in state background investigation required (residency, govt. loans paid, child support paid, taxes paid) Redundant efforts License needed to work

1/10/2013

WHAT WORKS

WHAT DOESNT (?)

Secured and monitored licensed premises Licensees responsible for inventory tracking and reporting Accountability from production to retail sale

States over-reach in monitoring control (State-centralized Video Surveillance) Redundant efforts (state as alarm administrator) Any govt monitoring that uses uncontrolledcost technologies

WHAT WORKS

WHAT DOESNT (?)

Common goals between local and state agencies Statewide intelligence networking

Lack of continuity in Caregiver/Licensee model Redundant efforts (prelicensing inspection) Inconsistent state and local standards Criminal vs regulatory enforcement-which is best? Privacy issues-patient information

1/10/2013

WHAT WORKS

WHAT DOESNT (?)

Streamlined business and background application process Streamlined license fee payment Reviewing records at licensed premises to determine compliance Filing relevant information at renewal

Filing business data with MMED (transportation , patient changes, patient employee changes) Requests for statutory waivers Reporting of false alerts from alarm systems to state Arrests

WHAT WORKS

WHAT DOESNT (?)

Vertical integration concept

Forcing vertical integration too soon Method of restricting wholesale sales /purchases (as a percentage of annual sales)

1/10/2013

WHAT WORKS

WHAT DOESNT (?)

Enforcement agency cash funded with user fees

No alternate funding source, or revenue safety net, for the start up years

Amendment 64

Regulatory Framework Working Group State and Local Mandates

Facts About 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 transferto individuals who are 21 years old or olderone ounce or less of marijuana;

Facts About Amendment 64 contd

Allow individuals who are 21 years old or older to possess, grow, process, and transport up to six marijuana plants, with certain restrictions; Require the state legislature to enact an excise tax on marijuana sales, of which the first $40 million in revenue raised annually must be credited to a state fund used for constructing public schools. Require the state legislature to enact legislation concerning the growth, processing, and sale of industrial hemp.

Implementation Timeline for Amendment 64

January 2012 Legislative Session Drafting of enabling legislation begins July 1, 2013 Department shall adopt necessary regulations October 1, 2013 Department 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 Department must begin issuing licenses (90-day requirement) July 1, 2014 Deadline for legislature to enact legislation concerning industrial hemp

Local Mandates

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 establishment operations 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 Local governments may establish a schedule of operating, licensing and application fees for marijuana establishments

Local Mandates contd

Application and license fees shall only be due if the local government issues a license due to inaction on the part of the State Local governments may establish civil penalties for violation of ordinances or regulations governing time, place and manner of operation The Department must provide the local government with a copy of the license application and half of the application fee ($2,500) upon receipt Local governments must notify the Department if an applicant is not in compliance with local ordinances prior to the issuance of the state license

Local Mandates contd

If the local government has imposed a limit on the number of licenses to be issued, the Department must solicit and consider input from the local government concerning their preference for license approval If the Department 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 Department The local government will have 90 days to act on a license application (issue or deny) submitted to them as a result of inaction on the part of the State

Local Mandates contd

If the Department 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 Department The local government must act on the license application within 90 days, unless compliance issues exist Licenses issued by local governments without state consent will have the same force and effect as a license issued by the Department for the term of the license

Local Mandates contd

Licenses approved by the local government without consent of the Department are not subject to regulation or enforcement by the Department for the term of the license Local governments that approve a license without consent of the Department because of its failure to issue a license within 90 days may request the entire license application fee ($5,000) from the Department Local governments must notify the State they have issued a license in cases where this has been triggered by State inaction

Local Mandates contd

Renewal of locally issued licenses must be submitted to the State unless the State has not adopted regulations at least 90 days prior to the expiration of the locally issued license Local government must notify the State of the renewal of the license State has no jurisdiction over the renewed license during the term of the license

State Mandates

The Department must adopt regulations necessary for the implementation of Amendment 64 not later than July 1, 2013 Regulations adopted by the Department must address the following:
Procedures for the issuance, renewal, suspension and revocation of a license to operate a marijuana establishment

State Mandates contd

Fee schedules for application, licensing and renewal fees (the application fee shall not exceed $5,000 adjusted annually for inflation, unless the Department 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 marijuana establishment

State Mandates contd

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

State Mandates contd

Restrictions on the advertising and display of marijuana and marijuana products Civil penalties for the failure to comply with adopted regulations

State Mandates contd

In any competitive application process, the Department shall consider:

If the applicant has prior experience producing or distributing marijuana under the Medical Marijuana Code in the locality in which the applicant wishes to operate Compliance history of the applicant under the Medical Marijuana Code

State Mandates contd

State must forward a copy of the license application and half of the application fee to the local government in which the applicant wishes to operate State must issue the license within 45 to 90 days of the receipt of the application unless compliance issues exist at the state or local level If the local government is granting a restricted number of licenses, the State must solicit and consider input from the local governments preference for licensure

State Mandates contd

State must notify an applicant in writing within 90 days of the specific reason for the denial of a license If the State fails to adopt regulations or issue a license within 90 days, the local government can issue the license State must forward all application fees to the local government upon request if the license was issued locally

State Mandates contd

State has no jurisdiction over licenses issued by local governments during the term of the license License types established by Amendment 64:
Marijuana Cultivation Facility Marijuana Product Manufacturing Facility Marijuana Testing Facility Retail Marijuana Store

ISSUE IDENTIFICATION: REGULATORY FRAMEWORK

Goal: Make the regulatory framework efficient, feasible and effective Key Tasks:
Identify the best framework for legislative construction and consider: Liquor Code MMED Code Other States (Washington, etc.) Examine blending of existing MMED statutes with recreational MJ Identify critical regulatory issues Identify a timeline, framework and priorities Find balance between appropriate and adequate control and being overly burdensome on the industry

Identified Issues:
1. Identify a regulatory framework and classifications for other uses besides consumption (e.g., hemp). Identify the extent of the Department of Revenues enforcement and regulatory powers. Consider whether tracking mechanisms are needed for recreational purchasers and users. Do we need a temporary regulatory scheme between now and January 2014? Consider establishing state operated recreational marijuana dispensaries.

2. 3. 4. 5.

6.

7. 8.

9. 10. 11. 12. 13.

14. 15. 16. 17. 18. 19. 20. 21. 22.

23.

Establish rules and regulations for the transportation of marijuana by growers, retail operations and purchasers. Pre-emption should be considered here, more relevant than criminal context The issue of financial banking is a component that should be address as part of the regulatory framework. Licensing model impacts and how it impacts local authority Identify framework for all types of consumption Understand and assess the environmental impact of the industry Set the ground rules for determining if there is a pre-emption issue Will insurance companies determine if they will cover Medical marijuana in their prescription policies? What are the impacts of Amendment 64 on means-tested programs such as Medicaid? How does the state address gray market issues? What is the funding model for regulation and enforcement? What are the tracking mechanisms (number 3 above) and are they relevant in the framework? How does the state regulate personal growth? There needs to be a definition for growing openly or publicly. Sunset and policy review ability to assess and adjust policy after a set time. Who will regulate growers? Can the state harmonize medical marijuana and A64 policies and rules? This would be a single regulatory framework. Can the state develop emergency funding for program implementation?