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.
Though many supporters of legal pot have adopted a “tax the hell out of it” perspective, lawmakers risk being undercut by the already vibrant and tax-free black market if they impose too many taxes.
Committee members were stuck with coming up with what one called a “mythical figure” for appropriate taxation that would not only be sufficient to fund the industry’s special enforcement requirements, but also be palatable to voters, who must approve the tax in the upcoming election in November.
In the end, they punted the complex issue to the state legislature, making no specific recommendation on tax rates.
The afternoon quickly proved a test of wills between those advocating for loose regulations and those who want to tighten the screws on legal pot as much as the amendment will allow. Both side were, at turns, rewarded and disappointed.
Marijuana advocates, for example, balked at an approved recommendation that defined a “serving size” of edible marijuana products sold in retail stores as containing 10 milligrams of THC, marijuana’s active ingredient. Jessica LaRoux, who makes such products, said the level was way too low and would barely have an effect.
“The definition of ‘recreation’ is that it’s fun,” she said while arguing for a higher limit. She also noted that the proposed 10-milligram serving size would do nothing to prevent people from making more powerful concoctions in the privacy of their homes.
The law-and-order crowd was also brought into line throughout the day. An attempt by Greenwood Village Police Chief John Jackson to recommend a one-pound limit on harvested marijuana in the homes of private growers was torpedoed when it was shown to unambiguously conflict with the language of the amendment, which says home-growers can possess any amount of marijuana their six plants allowed by law can produce.
Also shot down was an attempt by David Blake, a representative of Colorado Attorney General John Suthers, to make the presence of any amount of THC in the blood of an underage driver trigger an automatic drugged driving offense.
That measure was also voted down as too punitive.
Despite the sometimes-heated discussions, marijuana advocates generally considered the task force’s work a success. In a statement released after the meeting adjourned, task force member Christian Sederberg, one of Amendment 64’s architects, praised the “historic process” it had gone through.
“Even though the discussions were heated at times, the process allowed the public, task force and work group members to come together and find a responsible middle ground for the complex issues that needed to be addressed,” he was quoted as saying. “I am confident that Colorado is on the right track to swiftly implement a comprehensive regulatory environment that will allow for the safe commercial cultivation and retail sale of marijuana to adults.”
While that may be, it might still be too soon to break out the Goldfish and Cheetos. After he addressed the task force members, Hickenlooper noted that a federal response to the historic votes in Colorado and Washington has yet to happen; marijuana remains as illegal as ever under federal laws.
“They have an obligation to uphold the law of the land,” he said, adding that he would talked to U.S. Attorney General Eric Holder three weeks ago and that Holder told him the feds are working with “all hands on deck,” trying to figure out the federal response.
“At the same time, the last thing they want to do is go against the vote of one of their states,” Hickenlooper said. “When those two things get out of whack, there’s a real problem. They are struggling with it in a real way.”
Hickenlooper said that when he was back in Washington, D.C., recently, he fielded a lot of questions from other governors about how Colorado is dealing with Amendment 64.
“Many governors see this as something that’s happening across the country,” he said. “And so they’re looking at Colorado as kind of a, you know, a laboratory where these questions are going to be resolved. … It’s going to happen in other states as well.”
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