Medical Marijuana in Denver 101

Medical Marijuana in Denver 101 | Judy Montero

Understandably, there is a lot of confusion about the business of medical marijuana in Denver. District 9 has compiled this â??101″ to help constituents better grasp this complicated issue. Stay tuned for updatesâ?¦.

Medical Marijuana in Denver 101

It is important to note that both the City of Denver and State of Colorado have not finished creating and enacting regulations regarding the Medical Marijuana (MMJ) industry. Therefore, in some instances you will still have time to weigh in on state and city legislation. Further, those who get into the business of MMJ should take into account that regulatory changes are not only possible, but quite likely. Those regulatory changes may significantly impact the ability for some businesses to continue operation.

Why now?

In 2000, Colorado voters approved a constitutional amendment that legalized medical marijuana. However, the use of marijuana is considered illegal under federal law. Then just a year ago â?? October 19, 2009 â?? Attorney General Eric Holder, Jr. gave federal prosecutors the directive not to target enforcement of federal laws for marijuana use in states that legalized it for medicinal purposes. Since that time, the Colorado Department of Health has experienced a rush on patient and care giver registries. The rules regulating patients and care givers continue to be amended.

What does the state legislation say? (as generally explained by the Denver City Attorneyâ??s Office)

A lot of action around regulating the new business of medical marijuana has occurred over the last year across Colorado. This will likely continue into 2011 and beyond as municipalities begin to understand what role they want to play in accommodating this new industry. The Colorado State Legislature passed their first comprehensive bill dealing with the regulation of medical marijuana, HB10-1284, during the 2010 legislative session. Here are some answers to questions weâ??ve received about key features of the state legislation:

Where can patients get MMJ if they have a MMJ card?

* Grow their own
* Get it from a â??primary caregiverâ? who is registered with the state
* Get it from a licensed dispensary/center

Who can be a primary caregiver?

* Primary caregivers have to meet requirements and register with the state
* They can treat no more than five patients under their care

What kinds of MMJ businesses are licensed by the state?

* MMJ Centers (often known as dispensaries) â?? retail sales of medical marijuana to patients with a MMJ card
* Optional Premises Cultivation Operations (OPCOs) â?? have to be held in ownership with a MMJ dispensary/center
* MMJ infused product manufacturers

What are the basic licensing requirements?

* Local governments can require licenses for dispensaries/centers, OPCOs and infused product manufacturing. Yet the state law also notes that local governments do not have to accommodate any of these businesses. According to the state legislation, local authorities can opt-out of the state law entirely if they want by prohibiting commercial growing, manufacturing or retail sales. This can happen through legislation or a popular vote.
* An owner must get a local license before they can get a state license.
* Enforcement of regulations will happen at both state and local levels.
* Licenses with the state are two year licenses; Denver dispensary/center licenses are annual licenses now, but that could be changed to align with the state requirements.
* Local authorities are awarded the ability to adopt additional or stricter regulations than the state regulations.
* Local authorities can establish whatever fees they determine are necessary for licenses.
* Local authorities can hold public hearings prior to issuing licenses â?? possible exception is for OPCOs (see next point).
* Confidentiality of OPCO addresses is required.
* All owners, managers, officers and employees of MMJ businesses must be Colorado residents for at least two years for licenses issued after 12/15/2010.
* Anyone who has EVER been convicted of a drug felony will be disqualified for a license; further, the state defined disqualifications broadly to include denial of licenses for those who lack â??good moral character.â?

What are the operating requirements for MMJ businesses?

* Hours of operation for dispensaries/centers can be between 8:00 am and 7:00 pm
* State distancing requirements for dispensaries/centers are 1000 feet from:
o K-12 schools
o College campuses
o Residential childcare facilities
o Drug treatment facilities
* On-site consumption is prohibited at MMJ dispensaries/centers
* Dispensaries/centers have to be formally affiliated with an OPCO (may or may not be adjacent to the dispensary/center) that will produce at least 70% of their MMJ; the other 30% of MMJ sold at dispensaries/centers can come from other dispensaries/centers
* Dispensaries/centers, OPCOs and infused product manufacturers have to comply with local zoning and signage codes

What does the City of Denver legislation say?

All over the City weâ??ve been tackling a rising flood of new medical marijuana businesses. In January of 2010, Denver passed CB 34 which developed regulations for licenses for medical marijuana dispensaries/centers. However, MMJ dispensaries/centers are only one of three types of licenses that the City will require. Right now City Council is in the process of developing licenses for OPCOs and infused product manufacturing (see below). Further, the licensing requirements for dispensaries/centers may change slightly given the passage of the state legislation. Here are the basic requirements for a MMJ dispensary/center license in Denver as they stand today:

* A dispensary/center cannot be located in any residential zone district. HOWEVER, it is important to note they can be located in zone districts that allow for the use of residential â?? such as: CC (commercial corridor), MX (mixed use) and MS (main street) zone districts
* A dispensary/center cannot be located less than a 1000 feet from schools, child care centers and other dispensaries/centers (as of 12/15/2009)
* Certain types of felony offenders cannot operate dispensaries/centers (given the state legislation, this will tighten)
* No one can consume marijuana on-site at a dispensary/center
* Hours of operation have to be between 7 am and 9 pm (again, given the state regulations this will tighten)
* Dispensaries/centers have to provide a security plan that includes on-site cameras

Key Dates

* December of 2009 is when the City and County of Denver dispensary/center licensing regulations went into effect and July 1, 2010 is when most of the MMJ state legislation went into effect
* As of September 1, 2010 any dispensary in existence must certify to the state that the dispensary/center cultivates at least 70% of its own MMJ
* The City Council passed a moratorium on any new dispensary/center licenses starting on July 1, 2010 to run through July 1, 2011
* Denver aims to phase-in licensing and have licensing regulations in place by January, 2011 â?? this is not a guaranteed deadline:
* Intention is to start licensing January 1, 2011
* Businesses must be licensed by July 1, 2011 or discontinue operation
* No business has a vested right to continue in business after July 1, 2011 by any previously issued permit or license â?? all businesses will have to comply with new state and city licensing laws

Weâ??d really like to hear your ideas!

This is new for everyone so community input is especially important

Below is a preliminary, very rough draft proposal from Councilman Charlie Brown for regulations for MMJ OPCOs and infused product manufacturer licensing â?? as well as suggested regulations to align existing Denver MMJ dispensary/center regulations more closely with the state legislation. This proposal was introduced in the Special Issues Committee at the end of September. CW Montero and some of her colleagues have concerns with several of the proposed suggestions.

* Excise and License will be Denverâ??s â??local license authorityâ?
* Fees established for MMJ â??centersâ? will be the same as the ones we established for â??dispensariesâ?
* Other fees are to be determined
* No public hearings required for licensing; no requirement for subjective findings based upon â??needs and desiresâ? or â??reasonable requirementsâ? of the neighborhood
* Ordinance will track state law on basic requirements without adding other local requirements
* Ordinance will track state law on other administrative matters: renewal, transfers, disciplinary procedures and moreâ?¦.
* MMJ dispensaries/centers:
o Impose bond requirement to secure payment of sales taxes
o Identify in the licensing the zone districts where MMJ dispensaries/centers will or will not be allowed; continue to prohibit them in residential zones but allow in zones where retail sales are generally allowed
o Carry forward existing distance requirements (1000 feet between centers and 1000 feet away from schools etcâ?¦see above)
o In general, grandfather existing dispensaries/centers if they were compliant with the previous Denver licensing ordinance
o Track state law on all other performance standards for centers: sanitation, product labeling, on-site consumption, off-site deliveries, security, signage, hours of operation, etc.
* MMJ Infused Product Manufacturers:
o Indentify in the licensing ordinance the zone districts where the issuance of manufacturers will be allowed; generally allow in any district where similar manufacturing activities are allowed
o ** No spacing requirement applicable to manufacturers â?? CW Montero has serious concerns about this in particular
o Track state requirements in regard to sanitation requirements; refrain from adopting any local public health standards related to the manufacturing process at this time
* OPCOs:
o Require centers and manufacturers that are licensed in Denver to have their related OPCO licenses also located in Denver
o Prohibit the issuance of OPCO licenses in Denver to owners of centers and manufacturers that are located outside Denver
o **Identify in the licensing ordinance zone districts where the issuance of OPCO licenses will be allowed; generally allow in any district where commercial plan husbandry is allowed â?? CW Montero has serious concerns about this in particular
o ** No spacing requirements applicable to cultivators â?? again, this one is of serious concern to CW Montero
* Generally stand pat on the criminal and administrative penalty provisions set forth in HB 1284
* Adopt counterpart criminal provisions in the Denver Revised Municipal Code to allow for citations under city law
* Add unlicensed operation of an MMJ business as a â??predicate offenseâ? in Denverâ??s nuisance abatement ordinance

Things to consider

The regulations for MMJ dispensary/center licenses are mostly already established for the City and County of Denver. However, there are many other factors to consider as the City moves forward with developing license regulations for infused product manufacturers and for OPCOs. Some considerations:

* Should these businesses be buffered from residential zone districts AND residential uses in other zone districts? In other words if a Commercial Corridor or Main Street zone district encourages people to live there, should these businesses be buffered from those (potential and existing) residents?
* Should businesses that took the risk to start up before regulations are created be able to be grandfathered without having to comply with buffer requirements or other license requirements?
* Should businesses conform to the Cityâ??s official planning documents for the development vision for the area? In other words, should their form and design be such that they add to the vision, rather than detract from the vision of these plans? Barbed-wire fencing does not create a hospitable Main Street atmosphere, for example.
* Should we allow for businesses that obtained Plant Husbandry permits under the Zoning Code Update loophole â?? time from adoption to first of the year when both old and new code could be used â?? continue to operate that use permit if they couldnâ??t get it under the updated code? In other words, should a property owner that used their Industrial status from the old code to get Plant Husbandry permit continue to be able to operate with that permit if they are considered a Mixed Use zone in the updated code, for example?

How to stay informed while Denver City Council legislates the business of MMJ

The best way to stay on top of actions and debate over the ongoing process to establish MMJ regulations will be to tune into Denver City Council Special Issues Committee meetings. You can do this by: attending the Committee meetings; watching them live on TV or through your computer; by watching them at a later date on TV or through your computer; or just by reading the Committee agenda materials available on-line.

Attending the Special Issue Committee meetings

* Find the Council Committee meetings here. Since the Special Committee doesnâ??t meet regularly, it will be important review the weekly schedule.

Watching on Channel 8

* Find the TV schedule here for live viewing or replays of the Special Issues Committee

Watching on your computer

* Stream the Special Issues Committee live by tuning into this webpage when the Committee is in session or
* Watch it at your convenience by clicking on the video, MP3 and MP4 feeds at this webpage

The latest on the web

* The agendas for upcoming meetings, minutes for past meetings and any materials posted that were presented at the Special Issue Committee meetings can be found here
* Check in with Councilwoman Monteroâ??s daily blog for occasional updates on MMJ licensing

Want to share your thoughts?

We really would love to hear from you. Your thoughts on specific recommendations are always appreciated and are often incorporated as we form policy. You can give us a call at 303-458-8960, send us an email at [email protected] or send us a letter the old fashioned way to:

Councilwoman Judy Montero

Denver City Council District 9

3457 Ringsby Court, Suite 215

Denver, CO 80218

Some Current Policies Regarding the Business of Growing Medical Marijuana in Denver

To find out more about the process of obtaining a license for a dispensary/center read Denver Department of Excise and Licenseâ??s fact sheet.

Although legislation is underway at the City level to determine requirements that will be attached to licenses for OPCOs and infused product manufacturers, you may be curious about the fact some of these commercial businesses are already operating in Denver. First, it is important to emphasize again that any OPCOs and infused product manufacturers that start operating prior to the development of licenses do so at the risk of closure if their business doesnâ??t comply with the license requirements. Though it has been proposed, there is no guarantee that enough Council members will be in favor of an amendment to grandfather existing businesses. In fact, there are some members who have expressed opposition to the idea of grandfathering because it may significantly contradict the impacts Council will try to address during the creation of the licenses.

The guidelines below are not meant to be comprehensive but to offer a general idea of operating requirements. All businesses must following code compliance for buildings, mechanical, plumbing and safety as well as any required land use and licensing. Below youâ??ll find some general requirements for commercial businesses that want to grow MMJ off-site or manufacture MMJ infused products. Generally, MMJ OPCOs and infused product manufacturers will need to get:

* A Change of Occupancy and/or Change of Use Building Code Permit
* A Business License from Denver Excise and License
* A Denver Zoning Land Use Permit for Plant Husbandry
* According to Denverâ??s Community Planning and Development Building Permit Policy, â??A Change of Use/Occupancy is any change in the use, purpose, or level of activity within any building, or portion thereof, that merits a change in application of the requirements of the present building code. Here is generally the procedure for obtaining a change of use or occupancy certificate:
* Applicant needs approval from Zoning before Building Department can begin review
* Applicant needs to contact Denver Public Works Wastewater Management for review and approval
* Additional agency reviews may be required such as Public Works Transportation, Fire Department, Department of Environmental Health for example
* Applicant must provide a submittal packet that includes:
o Zoning review document
o Two sets of as-built floor plans noting areas which are affected by the change â?? highlighting elements to satisfy all Code requirements.
o Two sets of as-built mechanical plans documenting building systems, equipment and ventilation
o Applicant letter clarifying existing use/occupancy of entire building (including areas where use will not change)
o A plot plan locating the building relative to surrounding property lines and adjacent structures
* Inspections Administrator and/or Chief Inspector will dispatch necessary inspectors
* Fees will include hourly plan review and inspection review rates, at a minimum of two hours each

Once a license and Change of Occupancy and/or Change of Use Building Code Permit are awarded, Plant Husbandry zoning use permits are likely needed and will specifically require the items below. Again, this is not a comprehensive list.

* Identification of all proposed blocked windows and doors and specifications about how blocking will be done
* Construction permits â?? for new and modified partitions, floors and ceilings
* Materials such as Plastic or Mylar for enclosing rooms or covering walls must be installed according to Building Code & Fire Code (hanging plastic from ceilings or overhead structures is NOT in compliance for example)
* Manufacturer cut sheets documenting flame spread ratings or compliance with acceptance criteria specified for NFPA 286 shall be submitted for all proposed plastic. For plant husbandry permit if plastic is not proposed there must be a letter signed by the owner and stamped and signed by the design professional of record stating this is the case
* If CO2 generation is proposed, need to note the generation mechanism (burners, compressed CO2, etc); note that use of propane for CO2 is prohibited in the fire code. All manufacturer data for equipment must be provided. If there will be no CO2 generation, a letter stating this must be provided
* The electrical loads will need to be reviewed. Extension cords and power strips cannot be used in place of permanent wiring for equipment Electrical wiring from ballasts to grow lamps is required to be supported. An electrical submittal is required to demonstrate compliance
* Locking hardware on doors to/from indoor spaces as well as access and exit door shall be submitted for review.
* A Hazardous Materials Inventory Statement listing all materials with Material Safety Data Sheets must be submitted