City Council Study Session Agenda and Packet 2010 10 26

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LIGHT, HARRINGTON & DAWES, P.C. Malcolm Fleming, City Manager May 25, 2010 Page 2 of 6 health or well -being of any person or in the plain view of, or in a place open to, the general public. Id. at § 14(5)(a). Background Information about the Bill, The Bill further regulates the medical marijuana industry in Colorado. As pertinent to the discussion in this memo, th e Bill provides for a licensing procedure for medical marijuana sales and delineates certain types of commercial operations as a licensed activity condoned by statute that extend beyond the protections that Amendment 20 affords to patients and primary caregivers. The Bill creates a licensing scheme for such commercial operations requiring a person to be licensed by the State of Colorado and the local government in order to run such an operation. Additionally, the Bill sets forth the regulatory authority of local governments as to medical marijuana operations as discussed below. Existing Medical Marijuana Centers. On July 1, 2010 existing medical marijuana centers will be allowed to continue operating under applicable local laws until July 1, 2011. C.R.S. § 12- 43.3 -103. Existing operations will be required to file appropriate paperwork and pay a fee to the Department of Revenue by August 1, 2010. C.R.S. § 12- 43.3- 103(1)(b). "Payment of the fee and completion of the form shall not create a local or state license or a present or future entitlement to receive a license." Id. Medical marijuana centers currently operating in the City of Louisville must also certify by September 1, 2010 that they grow 70% of their product. C.R.S. § 12-43.3 - 103(2)(b). The statute does not further define the content of this certification or with whom it is filed. On July 1, 2011 only operations licensed by both the state and local licensing authorities under the provisions of H.B. 10 -1284 will be lawful. Therefore, medical marijuana centers currently operating in Louisville will need to apply for and obtain a state and local license as of July 1, 2011 (provided that the City does not determine to ban medical marijuana centers as explained below). There is no grandfathering for operations in existence that do not comply with state and local regulations. The Department of Revenue also has the authority to request from the City a list "that includes the name and location of each local center or operation licensed in said...municipality so that the [Department of Revenue] can identify any center operation operating unlawfully." C.R.S § 12- 43.3-103(b)(c). Options Available to Municipalities. The Bill states that "[p]rior to July 1, 2011, a ...municipality may adopt and enforce a[n]... ordinance licensing, regulating, or prohibiting the 6 The Bill also creates restrictions of the authorized locations of licensed premises (C.R.S. § 12- 43.3 -308), prohibits certain persons and entities from obtaining medical marijuana licenses (C.R.S. § 12- 43.3 -307), and creates unlawful acts and penalties (C.R.S. § 12- 43.3 -901). Further, the Bill provides clarification as to the definition of primary caregiver, requirements of the caregiver /patient relationship and creates the rulemaking authority of the Department of Public Health. 7 "On and after July 1, 2011, all businesses for the purpose of cultivation, manufacture, or sale of medical marijuana or medical marijuana - infused products...shall be subject to the terms and conditions of [Article 43.3] and any rules promulgated pursuant to this [Article 43.3]." C.R.S. 12- 43.3- 103(2)(C). 12