Regulatory Framework Work Group meeting Colorado marijuana task force

7/30/2019 Regulatory Framework Work Group meeting Colorado marijuana task force

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AGENDA

AMENDMENT 64 IMPLEMENTATION TASK FORCE

REGULATORY FRAMEWORK WORKING GROUP

Meeting of January 10, 2013 Medical Marijuana Enforcement DivisionBeginning at 2:00 p.m. 455 Sherman Street, Suite 390

Denver, CO 80203

In addition to other matters that may be considered by the Regulatory FrameworkWorking 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 MarijuanaLiquor 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 MattersAgenda Items for Future Meetings

Scheduling of Future Meetings

Approval of Minutes

Meeting adjourned.


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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 pertainingto 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 asExhibit 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, thestate 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.


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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 willreceive 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, orrevoked. 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


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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 federalgovernment 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 (seeExhibit 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


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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 thetaxpayers 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.


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1/10/2013

1

LIQU OR LICENSIN G & EN FORCEMENT

IN TH E 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 Permitsfor 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


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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

Retail 3.2% Beer Licenses~ Off-Premise

~ On-Premise~ Combined On- and Off-Premise

Local-Approved Special Permits

Temporary Permits for TransferApplications

~ Marijuana Cultivation Facility~ Marijuana Product Manufacturing Facility

~ Marijuana Testing Facility~ Retail Marijuana Store

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


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Liquor License Types

State-Issued Licenses, Permits & Reports of Changes

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)

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

Three-Tier Structure1. 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 toprevent influence and control by first two tiers over Retailer tier


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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


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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


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1

RegulatoryWorkingGroup

Howthecurrentmedicalmarijuanalawpromotespublicsafety,ensures

transparencyandlegitimacy,andprotects

the

interests

of

business

owners,

employeesandpatients.

GeneralBackground

Information

WhentheGeneralAssemblyImplementedtheCode,itsoughttocreateaverticallyintegratedclosedloop

commercialmedicalmarijuanaregulatoryschemeby: (1)theformationofaduallicensingsystemwithalocaloptout

provision;

(2)theestablishmentofsuitabilitystandardsforownershipandemploymentbasedonColoradoresidencyandadeterminationofgoodmoralcharacter;

(3)thepromulgationofasetofminimumsecurity,surveillance,andreportingrules;and

(4)

requirements

aimed

at

ensuring

public

safety,

facilitating

full

operationaltransparency,andeliminatingillicitdiversionofmarijuana.

1CCR2121Rules


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ColoradoResidencyRequirements

Owners/Investors

Policy

2yearresidency

requirementforowners

Createdtokeep

product,money,and

ownership

responsibilitiesinthe

stateof

Colorado.

Whyitworks

StatesRights 10th

Amendment Statesas

Laboratoriesof

Democracy

AvoidRICOscrutiny


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BackgroundChecks

BackgroundChecks

Policy

Owners/Investors/Empl

oyees

Occupationallicenses

required

Fingerprinting

FelonsProhibited

Reportingcriminal

actions

WhyItWorks

Legitimacy

Accountability

Transparency

Worksintheinterestof

publicsafety


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1/10/2013

4

FinancialTransparency

Policy

Requiresindustry

capitalcomesfrom

legal,verifiablesources.

Whyitworks

Accountability

Legitimacyoffunding

Responsibleowners

Publicsafety

LicensingStructure

Policy

Parityforexisting

businesses

Cleardefinitionof

licenselevels

Whyitworks

Allowsownersto

operateatalicensing

levelthatmatchestheir

businessmodel


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1/10/2013

5

VerticalIntegration

Policy

Requireaconnectionbetweenretailandgrow.

Wholesalelimit

Whyitworks

chainofcustodyofproductvitaltopreventdiversion.

Efficientproducttrackingsystem.

Commonownershipofgrowandretailpromotesaccountability.

Wholesalelimitsworkbetterthanartificialcapsonproductionandpreventsdiversion.

Avoidspitfalls

of

states

like

California.

InventoryTracking


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6

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


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1/10/2013

7

MIPStructure

Policy

Labelingrequirements:

Ingredients,chemical

additives,identity

statement,netweight

etc.

Packagingrequirements

Whyitworks

Trackingofproduct

Protectstheconsumer

Addressespublicsafety

concerns

Whatisnt

working

Communications Betweencityandstatelicensingauthorities

Withlocalandstatelawenforcement

manifests,badges

DualLicensing Cumbersomebackandforthprocess

Monthly/DailyReportingRequirements Burden

for

Businesses

and

MMED

PatientCards PatientsandBusinessesareeffected


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8

Whatisntworkingcontd.

NoTestingRequirements

Notconsistent,notregulated,marketingploy

Delays

ImplementationofHB1043

EmployeeLicensingandBadges

UnregulatedGrowers

Largethreatthathasbeenignored.


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Colorado Depart ment of Revenue

Medical Mari j uana Enforcement Division

Forms Packet

Revised

August 1, 2011


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MMEDAugust 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 documentsthat 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. Ifyou 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 StatusChange 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) Afterconsideration 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 eachcamera affected, should the functionality be below our standards.

Rule 10.400.B.4.g. The 9600 dpi requirement has been reinterpreted to read Thelicensee 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 [email protected] . If you

email the forms, please put the form name in the subject line. Manifest forms must beemailed separately from other forms.


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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 investigatorswill 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 andexits 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 toprimary patients and other sales to non-primary 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 insecticidesto 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


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Form

Number Form Name

Submit to

MMED or

Maintain on

Site? Audience

Frequency of

Submission

MMED

Form

Required?

(2) Instructions

MEDICAL MARIJUANA ENFORCEMENT DIVISION

FORM MATRIX

INSTRUCTIONS: Required forms must be faxed (303-205-2398) or emailed to [email protected]. If you email the forms, please put the form name in the sub

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.

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

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

complete and accurate to the best of their knowledge. Records must be kept for three years prior to the current year.

1120

MMC Inventory Count

Sheet Maintain MMC N/A No

MMC Licensees are required to record the grams of Medical Marijuana onare open to the public. Licensees should record their on-hand inventory wh

product is not moving in or out of the facility). Include only the net grams o

weights of containers and packaging). For infused products, include only

the product. Plants are not considered inventory for the 30% requirement.

inventory count (i.e., physically weigh the product) every day, or they can

inventory data. If the Licensees do not have a POS system, they can calc

beginning inventory + purchases and transfers in - sales and transfers out

monthly inventory will be carried to Form 1060.

Form Matrix


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EMPLOYEE LIST

Enter business licensee/application number

Reporting Month

Enter month reporting

Enter Employee Last Name

Employee Last Name

Enter Employee First Name

TOTAL EMPLOYEE COUNT

Business Licensee Name

Business Licensee /

Application Number

Employee First Name

Enter business licensee name

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 licenseesmust 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 #

Enter employee Medical Marijuana Key or

Support license #.

Form 1000MMED form rev 7/2011


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EMPLOYEE STATUS CHANGE FORM

Business Name Business License Number DateEnter legal business name Enter business Medical Marijuana registration license number Enter effective date of change

Employee License Number Employee Last Name Employee First NameEnter employee Key or Support license number Enter employee's last name Enter employee's first name

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:

Change of Status - check all that apply

Name Change Employee License Number Change New Hire Terminated Employee Other

Please Explain:

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

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.



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MONTHLY PRIMARY CENTER PATIENT LIST

Reporting Month

Business Licensee

Name

Business Licensee

/Application Number

Patient ID NumberPatient Card

Expiration Date

Primary Center

Designation Date

Maximum Plants Per

Patient *Enter patient ID number from

registry card

Enter patient card expiration

date

Enter effective date of primary center

designation

Enter maximum number of plants

authorized for patient

enter total number of patients

enter total of maximum number of plants

authorized for patients listed on this report

Enter month reporting


Total Plant Count

Enter business license/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.

Total Patient Count

Please submit ONLY

the fields shown on this

form. Do NOT send any

other personal

information aboutpatients.



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PATIENT STATUS CHANGE FORM

Today's Date

Enter date form is completed

Effective Date

Enter date change is effective



Business Licensee

/Application Number


Patient ID Number Patient Card Expiration DatePrimary Center Designation

Date (1)

Status Change(e.g. ID #, plant limit, Primary Center

designation, etc.).

Enter ID # from patient's card Enter patient card expiration date Enter primary center designation date. Enter status change details

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:

INSTRUCTIONS: Provide the required information when there is a change in patient status. This form must be submitted to the MMED within 72 hours o

submission by the fifth business day of the next month.

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.

Form 1040


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DateCompleted:NameofOriginatingEntity:

Phone#ofOriginatingEntity:

Date:

Signature:

Weight /Quantity

Fax#WhichApprovedMMEDCopyistoBeSent(N/Aifemailing):

Phone#MMEDCanCallwithQuestions:

NameofDestinationEntity:ItemDescription

ForMMEDUseOnly

AddressofOriginatingEntity:

MEDICALMARIJUANAENFORCEMENTDIVISION

MEDICALMARIJUANATRANSPORTATIONMANIFEST

AllsalestransactionsaretobecompletedpriortotransportationofanyMedicalMarijuana. Thereceivingentitymayrejectproductdelivered,butamountdeliveredmustbelimitedtoamountagreeduponinpriorsalestransaction.IfthepersontranportingMedicalMarijuanahasnotyetreceivedhisorheroccupationallicense

number,put"Pending"intheappropriatefield.EmailcompletedformtoMMEDmanifest@dor.state.co.usorfaxto3032052398

StopNumberonRoute:LicenseNo.ofDestinationEntity:AddressofDestinationEntity:

OccupationalLicense#ofPersonTransporting

PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove.)

NameofPersonTransporting:

Make,Model,LicensePlate#

NameofPersonReceivingorRejectingProduct:

Notes:detailsforextenuatingcircumstances(e.g.,roadclosure,flattire,etc.)

Signatureofindividualtakingreceiptofrejectedportionofthisshipment:

Iconfirmthatthecontentsofthisshipmentmatchweightrecordsenteredabove,andIagreetotakecustodyofthoseportionsofthisshipmentnotcircledabove.Thoseportionscircledwerereturnedtotheindividualdeliveringthisshipment.

DateandApproximateTimeofDeparture:

DateandApproximateTimeofArrival:

License#ofOriginatingEntity:

Ifyouaredeliveringmorethan17productstoonestop,usethespaceforthenextstoptocontinuelistingproducts.Forsmokableproduct,enterthegramsof

MedicalMarijuanainthe"Weight/Quantity"field.Forinfusedproduct,enterthequantity(i.e.,itemcount)inthe"Weight/Quantity"field. Youdonothaveto

includethegramsofMedicalMarijuanaininfusedproducts.

Checkhere ifmultiplepagesareused.Listthetotalnumberofpagesinthemanifesthere_____.

Routeto

Be

Traveled:

Phone#ofDestinationEntity:

DateofSignature:SignatureofPersonTransporting

Form1020 MMEDFormrev9/2011


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Date:

Signature:

Date:

Signature:


Signatureofindividualtakingreceiptofrejectedportionofthisshipment:

MEDICALMARIJUANAENFORCEMENTDIVISION

MEDICALMARIJUANATRANSPORTATIONMANIFEST

NameofDestinationEntity:StopNumberonRoute: ItemDescription Weight /QuantityLicenseNo.ofDestinationEntity:AddressofDestinationEntity:Phone#ofDestinationEntity:DateandApproximateTimeofDeparture:


RoutetoBeTraveled:

Notes:adddetailsforextenuatingcircumstances(e.g.,roadclosure,flattire,etc.)

PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove.)NameofPersonReceivingorRejectingProduct:

ItemDescription Weight /Quantity

NameofDestinationEntity:StopNumberonRoute:LicenseNo.ofDestinationEntity:Address

of

Destination

Entity:

Phone#ofDestinationEntity:DateandApproximateTimeofDeparture:


RoutetoBeTraveled:

Notes:adddetailsforextenuatingcircumstances(e.g.,roadclosure,flattire,etc.)

PRODUCTREJECTION(ifonlyaportionofshipmentisrejected,circlethatportionabove.)NameofPersonReceivingorRejectingProduct:


Signatureofindividualtakingreceiptofrejectedportionofthisshipment:Form1020 MMEDFormrev9/2011


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Form 1050 Revised 070111

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.

LICENSED BUSINESS INFORMATION

Date Submitted: License Number:

Business Name:

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)


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PHYSICAL INVENTORY SHEET FOR MMCs

Strain 1 (e.g.,

AK-47)

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

Day 1

Day 2

Day 3

Day 4

Day 5

Day 6

Day 7

Day 8

Day 9

Day 10Day 11

Day 12

Day 13

Day 14

Day 15

Day 16

Day 17

Day 18

Day 19

Day 20

Day 21

Day 22

Day 23Day 24

Day 25

Day 26

Day 27

Day 28

Day 29

Day 30

Day 31

* Carries to Form 1060

Business Licensee Name:

Business Licensee / Application Number:

INSTRUCTIONS: MMC Licensees are required to record the grams of Medical Marijuana on their premises every day that they are open to the p

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 M

exclude weights of containers and packaging). For infused products, include only the grams of Medical Marijuana in the product. Plants are not

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

the Licensees do not have a POS system, they can calculate their ending inventory (e.g., beginning inventory + purchases and transfers in - sale

inventory). The average monthly inventory will be carried to Form 1060.

Form 1120


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TRANSFERS, SALES, AND PURCHASES

MONTHLY SUMMARY

Month*:

Business Licensee

Name

Business Licensee

Number

Date

Transfers from OPC

(in grams)

Patient Sales

(in grams)

Wholesale Purchases (in

grams)

Wholesale Sales

(in grams)

Enter Transaction date

(NA if no transactions forthe day)

Enter total grams transferred

from the Transfers from OPC

Daily Summary Report (form1090)

Enter total grams sold to

patients from the Patient

Sales Daily SummaryReport (form 1100)

Enter total grams of wholesale

purchases from the Wholesale

Transaction Daily SummaryReport (form 1080)

Enter total grams of whole

sales from the Wholesal

Transaction Daily SummaReport (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)

Enter Reporting Month

Enter Business Licensee Name

Enter Business Licensee/Application number

INSTRUCTIONS: This report aggregates data from Forms 1080, 1090 and 1100 and calculates monthly totals for transfers, patient sa

and wholesales transactions.

Form 1070 MMED form rev 7/2011


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WHOLESALE TRANSACTION REPORT

Daily Summary

Date

Enter date of transactions


Business Licensee

/Application Number

This form is to be used for all Wholesale Transactions: Purchases and Sales.

Transaction Number Strain

Weight Quantity -

Purchased (in grams)Weight Quantity - Sales

(in grams) Batch # Em

Enter transaction number as assigned by

licenseeEnter strain Enter quantity purchased in grams Enter quantity purchased in grams Enter batch number Ent

Daily Totals

- -

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



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.

Form 1080


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PATIENT SALES REPORT

Daily Summary

Date

Enter date of sales


Enter Business Licensee Name

Business Licensee

/Applicant Number

Transaction Number Patient ID Number Strain Batch #Weight Quantity

(in grams)

Enter transaction number as assigned by

licensee

Enter Patient Registry # Enter strain description Enter batch # Enter quantity

Daily Total -

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

Enter Business License/Applicant #

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.

Form 1100


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TRANSFERS FROM OPC REPORT

Daily Summary

Business

Licensee Name

Business

Licensee #

Date of Transfer

Strain Product Description Batch #

Weight Quantity

(in grams)

Employee

License #

(from OPC)

Employee

Initials

Daily Total -

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

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

INSTRUCTIONS: Enter the weight (in grams) of transfers. For infused products, include only the weight of Medical Marijuana in the pr

is unknown, leave blank. Exclude transfers of live plants. The daily total is calculated and carried to form 1070.

Form 1090


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1/10/2013

1

Laura Harris

Director

Business and Occupational Licensing

Monitoring

Enforcement

Licensee Reporting Requirements

Funding


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1/10/2013

2

WHAT WORKS WHAT DOESNT (?)

Dual-authority concept

Local responsibility formatters unique to thecommunity

State responsibility formatters of state-wideconcern

Businesses allowed tooperate prior to licensure

Local approval as acondition precedent tostate issuance

Redundant efforts by stateand local authorities

Local and state standardsnot uniform

WHAT WORKS WHAT DOESNT(?)

Ensuring that keypersonnel have nocriminal background

Local responsibility forpersons working in the

community

Over-reach in statebackgroundinvestigation required(residency, govt. loanspaid, child supportpaid, taxes paid)

Redundant efforts License needed to work


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1/10/2013

3


Secured and monitoredlicensed premises

Licensees responsiblefor inventory trackingand reporting

Accountability fromproduction to retail sale

States over-reach inmonitoring control(State-centralized VideoSurveillance)

Redundant efforts (stateas alarm administrator)

Any govt monitoringthat uses uncontrolled-cost technologies


Common goals betweenlocal and state agencies

Statewide intelligencenetworking

Lack of continuity inCaregiver/Licensee model

Redundant efforts (pre-licensing inspection)

Inconsistent state andlocal standards

Criminal vs regulatory

enforcement-which isbest?

Privacy issues-patientinformation


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1/10/2013

4


Streamlined businessand backgroundapplication process

Streamlined license feepayment

Reviewing records atlicensed premises to

determine compliance Filing relevant

information at renewal

Filing business data withMMED (transportation ,patient changes, patientemployee changes)

Requests for statutorywaivers

Reporting of false alerts

from alarm systems tostate

Arrests


Vertical integrationconcept

Forcing verticalintegration too soon

Method of restrictingwholesale sales/purchases (as apercentage of annual

sales)


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1/10/2013

5


Enforcement agencycash funded with userfees

No alternate fundingsource, or revenuesafety net, for the startup years


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1

Amendment 64Regulatory Framew ork WorkingGroup

State and Local Mandates

Fact s About Amendment 64

Regulate the growth, manufacture, and saleof marijuana in a system of licensedestablishments overseen by state and localgovernments;

Allow individuals who are 21 years old orolder to possess, use, display, purchase,

transport, and transferto individuals whoare 21 years old or olderone ounce or lessof marijuana;


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2

Fact s About Amendment 64contd

Allow individuals who are 21 years old or older topossess, grow, process, and transport up to sixmarijuana plants, with certain restrictions;

Require the state legislature to enact an excise taxon marijuana sales, of which the first $40 million inrevenue raised annually must be credited to a statefund used for constructing public schools.

Require the state legislature to enact legislationconcerning the growth, processing, and sale ofindustrial hemp.

I mplementat ion Timeline forAmendment 64

January 2012 Legislative Session Drafting ofenabling legislation begins

July 1, 2013 Department shall adopt necessaryregulations

October 1, 2013 Department shall beginaccepting and processing license applications

October 1, 2013 Localities must enact anordinance 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


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3

Local Mandat es October 1, 2013 Each locality shall enact an

ordinance identifying the entity responsible forlicensing

Local governments may enact ordinances governingtime, place, manner and number of establishmentoperations

Local governments can prohibit the operation ofmarijuana enterprises within their local limits bypassing an ordinance or by initiated or referredmeasure appearing on the ballot during an even

numbered election year Local governments may establish a schedule of

operating, licensing and application fees formarijuana establishments

Local Mandates contd

Application and license fees shall only be due if thelocal government issues a license due to inaction onthe part of the State

Local governments may establish civil penalties forviolation of ordinances or regulations governingtime, place and manner of operation

The Department must provide the local governmentwith a copy of the license application and half ofthe application fee ($2,500) upon receipt

Local governments must notify the Department ifan applicant is not in compliance with localordinances prior to the issuance of the state license


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4


If the local government has imposed a limit on thenumber of licenses to be issued, the Departmentmust solicit and consider input from the localgovernment concerning their preference for licenseapproval

If the Department does not issue a license within90 days of receipt, the applicant can re-apply withthe local government who will have the authority toapprove the license without the consent of theDepartment

The local government will have 90 days to act on alicense application (issue or deny) submitted tothem as a result of inaction on the part of the State


If the Department does not adopt regulationsrequired by July 1, 2013, an applicant may submitan application directly to the local government afterOctober 1, 2013 and the local government isauthorized to issue a license without the consent ofthe Department

The local government must act on the licenseapplication within 90 days, unless complianceissues exist

Licenses issued by local governments without stateconsent will have the same force and effect as alicense issued by the Department for the term ofthe license


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5


Licenses approved by the local government withoutconsent of the Department are not subject toregulation or enforcement by the Department forthe term of the license

Local governments that approve a license withoutconsent of the Department because of its failure toissue a license within 90 days may request theentire license application fee ($5,000) from theDepartment

Local governments must notify the State they have

issued a license in cases where this has beentriggered by State inaction


Renewal of locally issued licenses must besubmitted to the State unless the State hasnot adopted regulations at least 90 daysprior to the expiration of the locally issuedlicense

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


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6

State Mandates The Department must adopt regulations

necessary for the implementation ofAmendment 64 not later than July 1, 2013

Regulations adopted by the Departmentmust 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 andrenewal fees (the application fee shall notexceed $5,000 adjusted annually for inflation,unless the Department determines a greater feeis necessary)

An entity currently licensed under the MedicalMarijuana Code may not be subject to anapplication fee of more than $500 to apply for alicense to operate a recreational marijuana

establishment Qualifications for licensure to operate a

marijuana establishment


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7


Security requirements for the operation ofa marijuana establishment

Labeling requirements for marijuana andmarijuana products sold or distributed bya marijuana establishment

Health and safety standards for the

cultivation of marijuana and themanufacture of marijuana products


Restrictions on the advertising anddisplay of marijuana and marijuanaproducts

Civil penalties for the failure to complywith adopted regulations


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8


In any competitive application process,the Department shall consider:

If the applicant has prior experienceproducing or distributing marijuana underthe Medical Marijuana Code in the localityin which the applicant wishes to operate

Compliance history of the applicant underthe Medical Marijuana Code


State must forward a copy of the license applicationand half of the application fee to the localgovernment in which the applicant wishes tooperate

State must issue the license within 45 to 90 days ofthe receipt of the application unless complianceissues exist at the state or local level

If the local government is granting a restrictednumber of licenses, the State must solicit andconsider input from the local governmentspreference for licensure


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9


State must notify an applicant in writingwithin 90 days of the specific reason for thedenial of a license

If the State fails to adopt regulations orissue a license within 90 days, the localgovernment can issue the license

State must forward all application fees tothe local government upon request if thelicense was issued locally


State has no jurisdiction over licenses issuedby local governments during the term of thelicense

License types established by Amendment64:

Marijuana Cultivation Facility

Marijuana Product Manufacturing Facility

Marijuana Testing Facility

Retail Marijuana Store


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ISSUE IDENTIFICATION:REGULATORY FRAMEWORK

Goal:

Make the regulatory framework efficient, feasible andeffective

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 recreationalMJ

Identify critical regulatory issues

Identify a timeline, framework and priorities Find balance between appropriate and adequate control and

being overly burdensome on the industryIdentified Issues:

1. Identify a regulatory framework andclassifications for other uses besidesconsumption (e.g., hemp).

2. Identify the extent of the Department ofRevenues enforcement and regulatory powers.

3. Consider whether tracking mechanisms areneeded for recreational purchasers and users.

4. Do we need a temporary regulatory schemebetween now and January 2014?

5. Consider establishing state operated recreationalmarijuana dispensaries.


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6. Establish rules and regulations for thetransportation of marijuana by growers, retailoperations and purchasers.

7. Pre-emption should be considered here, more

relevant than criminal context8. The issue of financial banking is a componentthat should be address as part of the regulatoryframework.

9. Licensing model impacts and how it impacts localauthority

10. Identify framework for all types of consumption

11. Understand and assess the environmentalimpact of the industry

12. Set the ground rules for determining if there is apre-emption issue

13. Will insurance companies determine if they willcover Medical marijuana in their prescriptionpolicies?

14. What are the impacts of Amendment 64 onmeans-tested programs such as Medicaid?

15. How does the state address gray market issues?

16. What is the funding model for regulation and

enforcement?17. What are the tracking mechanisms (number 3

above) and are they relevant in the framework?

18. How does the state regulate personal growth?

19. There needs to be a definition for growingopenly or publicly.

20. Sunset and policy review ability to assess andadjust policy after a set time.

21. Who will regulate growers?

22 Can the state harmonize medical marijuana and

Regulatory Framework Work Group meeting Colorado marijuana task force

Documents

Transcript of Regulatory Framework Work Group meeting Colorado marijuana task force