Colorado Springs City Council unanimously approved three new ordinances Tuesday that are aimed at more tightly regulating the local medical marijuana industry and the businesses that comprise it.
The trio of resolutions (No. 17-848, No. 17-850 and No. 17-00018) came before council during its regular session at City Hall and primarily address two issues: capping the number of medical marijuana licenses issued by the city and addressing the illegal transfer of marijuana by businesses without proper licensure.
“The first one is dealing essentially with the cap or limitation [on medical marijuana businesses]; the second two are transfer ordinances very similar in intent, just different places in the code,” said Bret Waters, deputy chief of staff for Mayor John Suthers.
Ordinance No. 17-848 comes just over two months before the May 25 expiration of a moratorium created last May on new medical marijuana licenses and changes of location for those license holders. The new ordinance, effective upon the moratorium’s expiration, will now permanently cap the number of licensed marijuana business locations in Colorado Springs at 212.
As it currently stands, the Colorado Springs marijuana industry includes licenses for 132 medical dispensaries, 173 grow premises and 51 infused product manufacturers — a total of 356 — representing 212 locations.
The item’s proposed locations cap “prohibits any new medical marijuana center (dispensary) license applications” and “surrender or expiration of an existing license does not create any opportunity for replacement,” although transfers of ownership (cases in which the business is sold to another party) would still be allowed.
The new ordinance will, however, allow for new dispensary and infused product manufacturing licenses as long as they are co-located with an existing location under the same ownership. It also allows such businesses to change location, as long as the entire operation moves to the same address.
The recommendation also includes allowing marijuana testing facilities to be licensed in the city and places a cap of one per every 100 MMJ licenses — which would mean a limit of three for the entire city.
Ordinance No. 17-850 and Ordinance No. 17-00018, approved last month by the Colorado Springs Planning Commission, essentially close a loophole in the city code that has allowed businesses without licensure to legally sell medical marijuana to “gift or remunerate” marijuana to customers making other purchases.
“There has been no more of a divisive subject or situation within my community than the subject of reimbursement and gifting,” said Jaymen Johnson, owner of Speakeasy Cannabis Club and member of the political action committee Together for Colorado Springs. “It has pitted the unlicensed community against the licensed industry; it has divided the cannabis consumer; it has caused much confusion and much debate; and it has caused nearly irreparable damage to our community, in my opinion.”
Johnson, who spoke out in support of all three ordinances, said that he would eventually like to see Colorado Springs allow for the sale of recreational marijuana, but that it is important to first place pertinent regulations on the existing local industry.
“I believe that in the future, we could stand to benefit from a licensed recreational industry, but I believe that the way the cannabis industry has behaved so far has only held us back and hindered us in heading toward this goal,” he said. “I hope we will continue to address these issues before they become issues … so that we can come up with solutions to problems before they happen.”
In response to the passage of the three resolutions, City Council President Merv Bennett said that “together, we can find positive solutions,” adding that the city has “kind of been playing catch-up” on creating ordinances that effectively regulate the local medical marijuana industry.
The three ordinances are the culmination of work performed by the Colorado Springs Marijuana Working Group, which was formed in May 2016 to make policy recommendations to city council related to the local medical marijuana industry. The group picked up after the disbanding of the Marijuana Task Force, which was commissioned by city ordinance to “review, study, develop, evaluate and review laws and regulations pertaining to marijuana businesses, including but not limited to location and licensing criteria, fees, advertising and other time, place, manner and number regulations.”
The current iteration of the group includes: Whitley Crow, Tom Gallivan, John Harding, Dale Nesmith, Hannah Parsons, Tom Scudder, Bridget Seritt and Renze Waddington. The group also includes several city officials: City Councilor Larry Bagley, Deputy Chief of Staff Bret Waters, City Clerk Sarah Johnson; Colorado Springs Fire Marshal Brett Lacey; CSPD Commander Sean Mandel; and the city’s Planning & Development Director Peter Wysocki.
“The focus of the working group was to bring forward ordinances, resolutions, whatever to reevaluate the medical marijuana licensing schemes by the time that moratorium ends,” said License Enforcement Officer Lee McRae during a Feb. 27 work session on the proposed ordinances.
After the council work session, members of the Marijuana Working Group reconvened to discuss alterations to the language of the proposed ordinance, but ultimately decided to allow it to go to a vote unchanged.
“We did meet and discussed these items, and the consensus of the Working Group generally was that we would stay with the wording that we have in the ordinances before you,” Bagley said during Tuesday’s meeting.
Council also acted Tuesday to appoint two new members of the Marijuana Working Group: Santiago Guerra, an assistant professor of Southwest Studies at Colorado College; and Clifton “Cliff” Black, a local lawyer.
This news comes just weeks after comments from the Trump Administration that sent a shock wave of uncertainty through the national marijuana industry.
On Feb. 23, White House Press Secretary Sean Spicer said that the U.S. Department of Justice could begin to enforce federal anti-marijuana laws targeting the recreational/retail portion of the industry.
Just last week, U.S. Attorney General Jeff Sessions echoed that sentiment during a radio interview with conservative talk show host Hugh Hewitt. In the interview, Sessions said that federal law should still apply even in states such as Colorado which have repealed anti-marijuana legislation. He continued by stating that the administration will carry out enforcement of those laws that prohibit such activity, and even called out Colorado specifically.
“We will enforce law in an appropriate way nationwide. It’s not possible for the federal government, of course, to take over everything the local police used to do in a state that’s legalized it,” he said. “I’m not in favor of legalization of marijuana. I think it’s a more dangerous drug than a lot of people realize. I don’t think we’re going to be a better community if marijuana is sold in every corner grocery store. … This, places like Colorado, it’s just sprung up a lot of different independent entities that are moving marijuana. And it’s also being moved interstate, not just in the home state. … And neighbors [Oklahoma and Nebraska] are complaining, and filed lawsuits against them. So it’s a serious matter, in my opinion.”
In response to Spicer’s comments — prior to those made by Sessions — the Marijuana Industry Group, a Denver-based cannabis trade association, issued a statement from its executive director, Kristi Kelly.
“Marijuana Industry Group supports the will of the voters of the state of Colorado, and the legitimacy of the medical and recreational programs,” she said. “The Colorado cannabis programs are heavily regulated, heavily taxed, and heavily enforced by state and local governments. Resources are better spent pursuing illegal cartels than state- and locally-licensed, tax-paying business operators.”
Kelly continued to state that she considers marijuana law enforcement to be a “state’s rights issue,” and that “Colorado’s medical and recreational cannabis markets are firmly entrenched in the state’s constitution, as well as a complex statutory and regulatory framework.”
According to data from MIG, Colorado’s cannabis industry saw $1.3 billion in sales and $199 million in taxes/fees last year, which represented $3 billion in total economic impact and contributed to the creation of 20,000 jobs.
“Deconstruction of this market would likely cause a recession in the state,” said Kelly.