Medical cannabis in the early stages of the flowering at Medical Horticultural Services, a local growing facility./Photo by Steve  Eginoire

Gone to seed

City, county leave recreational marijuana business in waiting

by Tracy Chamberlin

New Year’s Day might be the beginning of recreational marijuana sales in Colorado, but for Durangoans the wait will be a bit longer.

The City Council unanimously approved a moratorium Tuesday night on issuing recreational marijuana business licenses until June 30, 2014.

“The first step is to see what’s going to happen at the state level so we’re not undoing or redoing, or having conflicting messages with our local retailers,” said Councilor Christina Rinderle.

Something that caught local businesses off guard was in the spring of 2012, when the state’s Department of Justice notified medical marijuana dispensaries across Colorado they must be at least 1,000 feet from any school property.

The city only required a 500-foot distance. This discrepancy eventually forced local businesses to relocate, something Rinderle said the city wants to avoid by waiting for the final version of state regulations.

The draft permanent rules, called the Colorado Retail Marijuana Code, were released by the Department of Revenue’s Marijuana Enforcement Division in mid-August and the public comment period on those rules ended Aug. 27.

Besides needing direction from the state, the city also cited the November tax vote and the ongoing Land-Use Development Code discussions as reasons behind the choice to delay licensing.

“If things move faster, we can move our moratorium deadline,” Rinderle said.

The state’s Taxpayers Bill of Rights requires a vote on any tax increase, so the 15 percent sales tax and the 15 percent excise tax, flagged for education, on retail marijuana sales proposed by the state legislature will go up for a vote this fall.

Local communities can include additional taxes, something Boulder and Denver are considering.

Currently, Denver plans to issue retail licenses, but only to existing medical marijuana centers until 2016. The Telluride Town Council is also going to allow medical marijuana shops to transition to retail or to operate dual medical and retail establishments.

San Miguel County is another community on board for January 2014, recently voting to approve retail sales and begin processing applications.

Some communities in the state, like Bayfield, have chosen to permanently ban retail marijuana sales.

According to Councilor Dean Brookie the city’s moratorium was “only a delay.” The 5-0 vote follows one by the La Plata County Board of Commissioners last week to ban retail sales until Dec. 31, 2014.

The county approved the ban 2-1 with Commissioners Julie Westendorff and Bobby Lieb voting to approve it, and Gwen Lachelt voting against it.

Although the county ordinance uses the term “ban,” commissioners insist they don’t want to permanently ban retail businesses. What they are looking for is more time.

After all, the deadline is less than a month away.

Amendment 64, approved by more than a 60 percent margin in both the city and county last November, legalized the cultivation, possession and use of recreational marijuana for those 21 and older, attempting to regulate it like alcohol.

Included in the amendment’s language is an Oct. 1 deadline, when local municipalities must make the choice to ban retail sales or begin processing applications.

If Durango or La Plata did not approve the moratoriums ahead of the Oct. 1 deadline, they would have to begin processing applications for commercial retail establishments on that day.

Like the city, county officials wanted to wait for permanent state regulations and results from the November tax vote. They also felt they needed time to work out regulatory details, something they were unsure could be done after the fact.

If county officials do complete the regulations ahead of their December 2014 deadline, the ordinance could end early.

The one thing that was not a reason for putting the brakes on the budding industry was the threat of federal intervention.

Under the Controlled Substances Act, marijuana is an illegal Schedule I drug. Many state and local leaders were holding their collective breath, wondering what the feds would do about Amendment 64.

The wait ended last week, when the Department of Justice officially announced it would leave marijuana enforcement up to the states. In a memo from U.S. Attorney General Eric Holder federal prosecutors were directed to focus on eight priority areas including use by minors, trafficking beyond state borders, marijuana revenue going to organized crime, violence, drugged driving and cultivation on federal lands.

The announcement was welcomed by officials in Colorado and Washington, which also legalized marijuana during the November 2012 elections.

“Amendment 64 put Colorado in conflict with federal law,” said Gov. John Hickenlooper. “(The DOJ’s) announcement shows the federal government is respecting the will of Colorado voters.”

When whispers of Amendment 64 first started spreading across the state, Durango and La Plata County enacted moratoriums on the industry.

Uncertain of what the voters would choose to do, but knowing that the ballot language specifically gave medical marijuana businesses a faster track to retail sales, they chose not to issue any new medical marijuana licenses.

Over the past couple of years, the city and the county have passed several moratoriums on new medical marijuana licenses. Now, retail licenses join the ranks.

Local medical marijuana business owners, who attended city and county meetings, spoke about the competitive edge that other businesses in the state would have with these moratoriums in place.

After all, it’s a business and local companies could be left out in the cold.

Co-owner of Durango Organics Jonny Radding spoke to the county about the potential repercussions of the ban, adding that it takes at least four months to prepare the product. Therefore, the business would need to begin growing by February 2014 in order to be able to enter the retail marketplace by the time the city began processing applications in June.

County Attorney Sheryl Rogers called the February goal do-able, but “pretty ambitious.” She added the county does plan to seek public input on the rules and regulations. The city is also planning to seek feedback from residents, however no dates have been announced.

With both the county and the city on hold, but vocal about the possibility of pushing up the deadline, local businesses are left sitting on the sidelines for the Jan. 1 initiation of brand new industry.  n