As a cloud of skunky smoke wafted over a pro-marijuana rally across the street, lawmakers at the state Capitol on Tuesday battled over regulations for the medical- marijuana industry.

The debate inside, where the full state House ultimately passed a bill to create rules for marijuana dispensaries, focused largely on the nuts and bolts of the new regulations: licensing requirements, tax policy and signage rules. The major changes the House made to the bill mostly rolled back concessions dispensary owners had won earlier in the legislative process.

Lawmakers restored language to the bill, House Bill 1284, that would let local governments or local voters ban dispensaries in their communities. They removed the ability for medical- marijuana patients to consume cannabis-infused products at dispensaries. And they toughened criminal background-check requirements to bar anyone ever convicted of a drug-related felony from operating a dispensary.

At one point during the hours-long debate, a lawmaker argued against a proposal by saying it was unprecedented, to which Rep. Jack Pommer, D-Boulder, remarked: “We’re essentially setting up street-corner marijuana shops. If the intent of this bill is not to break new ground, we’ve already gone beyond that.”

The bill still needs one more vote in the House before going to the Senate for debate.

The broader impact of the legislature’s groundbreaking bill was most clear, though, across the street at Civic Center, where thousands of pro-legalization marijuana activists gathered for the annual April 20 rally, which this year took on a decidedly medicinal tone. There were booths for dispensaries and fliers advertising doctor referrals and a speech by a researcher who specializes in the medical benefits of marijuana.

Legalization activists acknowledged how closely their cause has become entwined with the boom in medical marijuana, which has created not just new networks for activists but also legal revenue streams to fund them.

“It has helped the legalization of marijuana 10,000 percent,” said Richard Eastman, a medical-marijuana patient and cannabis activist from California who was one of the rally’s speakers.

“It’s certainly familiarized the public to (marijuana) so it’s not quite the villain they thought it was,” said Dave Penny, a Colorado medical-marijuana patient at the rally.

Activists, though, said legalization proponents must be wary of riding medical marijuana’s coattails too much, saying expanded medicinal access can only take their cause so far.

“Medical marijuana doesn’t get us there,” Allen St. Pierre, the executive director for the National Organization for the Reform of Marijuana Laws, told the crowd. “We have to change these laws. We have to legalize marijuana.”

John Ingold: 303-954-1068 or jingold@denverpost.com