The Challenge of Selling Marijuana Legally in Colorado WSJ Team

I have in front of me 14 grams of Lemon Skunk. It’s amazing. The flavor, the smell, and the anticipated high; everything about this bud is amazing. What follows is an account of this bud’s journey from plant clone to my bowl. This story isn’t about the plant itself. Many writers will tell you how it was grown and the care it received. Instead, this story is one of a trip through a labyrinth of legal regulations and procedures describing how this amazing bud came to legally lay in my bowl with a blue edged yellow flame drawn gently through their fibers.

In most of the USA marijuana is illegal. According the US Attorney General, it is still illegal anywhere in the US, but in few enlightened places like Colorado it’s legal within the state for medicinal use. Many opponents believe this has caused a “marijuana free for all”. However, there is no “free lunch” in the medical marijuana dispensary. Everyone from the grower to the patient must follow strict regulations. A short time ago the regulations were much more relaxed. The regulations in California are, according to my sources, more relaxed than here in Colorado. There are many procedures and regulations to be followed in the chain of events from sprout to bowl.

First let’s examine procedures from the standpoint of a new patient.

The first thing any new patient has to do is make an appointment with a Medical Marijuana Doctor to get a Medical Marijuana Recommendation. Some doctors will not make the recommendation at all, and others will give a recommendation to anyone. It’s not hard to find the right doctors. A new patient can easily ask a local dispensary for a recommendation. The fee is currently around $60 for the doctor visit. A new patient should have a history of a pre-existing ailment for which Colorado permits the use of Medical Marijuana. If that fails the patient can claim the have chronic pain. Chronic pain is very difficult to diagnose and most of these doctors really don’t really care anyway. There may often be a head nod and a wink from both patient and doctor, but I consider this is totally acceptable.

Once the new patient has acquired a Medical Marijuana Recommendation, the form is mailed to the State of Colorado (the address is on the form) with the appropriate fee, around $90. A short time ago, a new patient was able to go to a dispensary immediately, but now the patient will have to wait at least 30 days after sending in the form. This may be an attempt by opponents to slow down the delivery of the medication as much as possible, but is more likely a result of more recommendations going to the state than can readily be handled quickly.

The new patient is finally ready to go into the store and buy some marijuana. Every time a patient enters a dispensary they have to present both their Colorado Drivers License and their red Medical Marijuana Recommendation card. The patient is required to sign in and wait until it’s their turn. At which time they are taken into the back room to purchase marijuana. The general public is never allowed to see the marijuana on the shelf. Finally, the patient is ready to purchase. Each patient is limited to 2oz per day. The patient then cannot buy any more from any shop until the next day.

The procedures for a new patient are relatively straight forward. From the patient’s point of view, the procedures are clear. Make an appointment with the right doctor, pay the right fees, then wait 30 days to go to the dispensary and purchase marijuana.

Now let’s examine the same scenario from the dispensary’s point of view.

The first time the dispensary operator sees a new patient is usually when the new patient walks through the door of the shop. If the new patient does not yet have a Medical Marijuana Recommendation the shop operator may offer a referral to a doctor. Otherwise the shop operator must check to make sure they have their red card and ID. The new patient may be an undercover operative for the Department of Revenue (DoR) checking to make sure you’re following procedures. The fines are very stiff for missing even the tiniest detail. The dispensary operator logs the new patient into the patient log. This log must be sent to the DoR every month with a report of the patient sales.

If the operator suspects that the new patient is an undercover agent, he may be nervous, but he’s done this before. For the most part the police are there only to show a presence, not to shut down the shop. The dispensary operator’s greatest fear is getting the dispensary shut down. If there are too many violations and that could happen very quickly.

The dispensary shop operator has to know whether or not the patient has already been in today. The smaller shops usually know everyone by name, but some of the shops do good numbers in business and can’t remember everyone’s face. The operator should look at his POS (point of sale) system but it’s not working properly again. He’s upset about that, but understands. The POS system supplier can’t keep up with the changing regulations any faster than he can. New reports are due this week but they haven’t gotten the new reports in the system because the DoR just released the templates yesterday. Managing a reporting and tracking system is not what the operator is in business to do. He’s in business to help his patients. He sees them every day and while a few of them are “potheads” the vast majority are just patients who really need the extra help that medical marijuana can give them.

The shop operator helps the patients find what’s best for them and weighs out the marijuana. The operator must then be sure to put the required label on the packaging. If the POS software happens to be working today it can print out a label. More likely, the operator will have to write it out by hand. For now the label has to include the product name, weight, patient number, ingredients, batch number, and various other information the DoR wants. This required label will of course be changing again in two months when the DoR changes their mind and revises what needs to be on the label.

Before the operator can sell the marijuana he first has to actually grow or otherwise acquire it by trading with another dispensary. New regulations went into effect on July 1st of 2011. Prior to that, anyone that was a registered grower could sell their crop to a dispensary. A dispensary could have received all its stock from other growers. Dispensaries must now maintain and track under what is referred to as the 70/30 rule. The rule is that 70% of the current stock has to be grown by the dispensary themselves and the other 30% can be from trades with other dispensaries.

The regulations define two classes of patients; member patients and non-member patients. The new patient must choose a primary dispensary where he will be a “member”. Any other dispensary will treat the new patient as a non-member. “Member” status gives the patient special pricing and allows the dispensary to grow up to 6 plants. Each plant was intended by the DoR to be labeled and tracked from clone to shelf. The DoR temporarily backed down on this requirement because none of the dispensaries were able to meet the requirements before the regulations went into effect. At the moment tracking starts after the plant is processed.

Tracking information is placed on the label of each package of marijuana. Regulations requiring tracking of patients and product will likely continue to become stricter and more invasive. The DoR requires cameras with recording systems to create a permanent visual record of all patients and their transactions.

Future dangers for the new patient and dispensary operators are obvious. Tracking information on the labels could be used by federal attorneys to prosecute either the patient or the dispensary operator under federal laws. Video recording cameras are a permanent visual record that could be used at any time to endanger the liberty of patient and operator.

The new patient does not see this regulatory maze. He has paid his doctor and the State of Colorado. He has his red Medical Marijuana card. He can just walk in, present ID, and purchase any bud. The dispensary operator must deal with an ever changing labyrinth of regulations. Including, trying to identify patients that have already purchased on any given day. As well as tracking every bud from clone to bag, and making sure that when he trades with other dispensaries, he maintains 70% of his stock on premises. The operator has to keep records of every visitor and maintain video surveillance equipment to record every patient and plant processed.

The future is likely to bring more regulations, higher licensing fees, and additional regulations that compromise the privacy, liberty, and the pursuit of happiness of both the Medical Marijuana patient and dispensary operator.

Of course I can’t print all the regulations here due to space limitations. For anyone that wants to review all 77 pages of the regulations, the PDF can be found at The Colorado Department of Revenue.

By Joe

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