The Daily Caller

The Daily Caller
FILE -- This Sept. 2, 2012 photo shows marijuana growing in a grow house in Denver. (AP Photo/Ed Andrieski) FILE -- This Sept. 2, 2012 photo shows marijuana growing in a grow house in Denver. (AP Photo/Ed Andrieski)  

Legal pot recommendations move to Colorado legislature

When Colorado voters legalized marijuana by passing Amendment 64 in November, Colorado Gov. John Hickenlooper, who campaigned against the measure, famously warned supporters that they shouldn’t “break out the Cheetos or Goldfish too quickly” since marijuana remained illegal at the federal level.

That is still the case, but a special task force appointed by Hickenlooper to chart the best path for the legal marijuana retail market in Colorado wrapped up three months of often-contentious work Thursday while nibbling on those very snacks, provided courtesy of the governor’s office.

There is still much to be done, but Thursday was a milestone in Colorado’s history-making effort to forge a unique industry in American history — the legal sale of a recreational substance that is still strictly prohibited at the federal level.

For the past three months, the 24-member task force — composed of lawmakers, police, drug counselors, medical marijuana patients, dispensary owners and government representatives — weighed everything from labeling requirements for marijuana products to how to tax this newly legalized substance.

Hickenlooper made a personal appearance to thank the members for their work, using the occasion to voice his concerns about potential negative effects of the law, which he said includes the possibility that more at-risk teens could end up homeless because of the legal availability of marijuana.

“I’m not saying that the sky is falling or that this is the end of the world,” he told task force members, “but there will be negative consequences.”

As incongruous as the fear that marijuana causes homelessness might sound, it was on par with much of the afternoon’s discussion. The conversation ping-ponged from the absurd — at one point, task force members pondered how cops can figure out if marijuana-infused birthday cakes comply with the personal possession limitations of Amendment 64 (turns out it would take 12 cakes with the proposed levels of active THC being discussed for large food items to equal an ounce of pot) — to the serious, such as exactly how much taxation legal marijuana can bear before driving customers back to the cheaper black market and undermining attempts by the state to collect revenue on pot sales.

The latter is arguably the thorniest question lawmakers will have to consider when they are presented with the task force’s recommendations next week. There is no model to rely on and no one has any idea how marijuana prices will react to free-market principles.

Amendment 64 calls for an excise tax during the first transaction from grow facility to manufacturer or retailer of up to 15 percent of the transaction price.

But the task force had earlier recommended that lawmakers keep the vertical integration model already in place for medical marijuana dispensaries, which requires such businesses to grow at least 70 percent of the marijuana they sell. That means that the first transaction is being made to and from a single entity — they would essentially be selling the pot they grow to themselves.

In all likelihood, the value of such a transaction will be as low as possible, meaning the excise tax won’t amount to much or be a reflection of true market value.

The amendment also requires that the industry fund itself through licensing fees and tax revenue, but the first $40 million in tax revenue is earmarked for a state education fund for school construction.