Colorado’s Amendment 64: How the amendment affects the state’s budget

Amendment 64, marijuana and how big money affects small business in Colorado

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Cecelia Gilboy

Editor’s Note: See Boulder Weekly‘s official endorsement of Amendment 64 here.

Amendment 64 isn’t about legalizing marijuana. It’s about money.

Yes, you can vote for it because you want to legally possess an ounce. But that’s already decriminalized — you’re just saving yourself a potential $100 fine.

The ounce you buy at a store will be taxed. From these taxes, $40 million will be directed to schools. By buying that ounce, you’ll help Colorado’s children and teachers.

Maybe you’d rather grow your own. But even if Amendment 64 passes, that won’t exactly be legal. State law would allow you to grow six plants. But don’t try to grow seven — that’s illegal. So critics contend that Amendment 64 won’t reduce the number of people jailed for marijuana.

But Amendment 64 would still save Colorado law enforcement $12 million a year, according to the Colorado Center on Law and Policy. Even Boulder has victims of robbery, assault, rape — victims who would appreciate that $12 million spent stopping their assailants, not busting marijuana users.

Cultivation is punishable by five years — and Amendment 64 can’t protect you from federal law. Luckily, the feds don’t care about your closet grow. But what about commercial facilities growing for retail weed stores — like those proposed by Amendment 64?

“There’s this fear that the federal government will punish us,” acknowledged Christian Sederberg, a lawyer instrumental to Amendment 64.

Fellow medical marijuana (MMJ) lawyer Brian Vicente, co-director of the Amendment 64 campaign, believes they’ll react “the same way they’ve handled medical marijuana, which is largely hands-off.”

Some disagree that the feds have been “hands-off.” Especially those whose businesses were shuttered by the feds. More than 50 Colorado locations were closed by what some call an aggressive attack by the Obama administration.

Why? According to the Center for Responsive Politics, Democrats received $15 million from the pharmaceutical industry in the 2008 election cycle. And pharmaceutical companies lose profits to MMJ: “Getting off pharmaceuticals” is the most common story heard at most dispensaries.

They could lose more from legalization. They’ve developed drugs containing THC, which the Drug Enforcement Administration (DEA) moved to reschedule to Schedule II — just for them. The DEA website explains that drug companies’ THC is equivalent to the synthetic, FDA-approved THC. So their natural THC is like synthetic THC, which is legal, which mimics natural THC, which is illegal. What?

The government still classifies any THC you grow as Schedule I, like heroin. But in the last 14 years, the pharmaceutical industry has spent $2.3 billion lobbying the government. You haven’t.

If you can procure THC in legal marijuana, you won’t buy it in pricey capsules. So the pharmaceutical industry wouldn’t love Amendment 64. And in this election cycle, campaign contributions have included more than $28 million from them.

No one knows how the federal government will react. Obama has been vague. While Romney feels health care is best left to the states, he can’t be expected to feel similarly about marijuana. So sick patients may be at risk: Federal raids could jeopardize their access to medicine.

“Destroying a cancer patient’s medicine looks bad, politically,” said one concerned owner. “Destroying weed grown for stoners does not.”

But won’t medical marijuana still exist? Amendment 64 claims to not affect dispensaries; it just gives owners the option to fork over their Medical Marijuana Center (MMC) licenses and apply for a retail license. But MMCs could go out of business: Patients may not renew their MMJ license. Why pay a doctor and state fee when you can shop elsewhere for free?

If patient numbers dwindle, dispensaries are doomed. Medical marijuana law, which proponents promise will be unaffected, only allows dispensaries to grow six plants per patient. So if a dispensary’s patient numbers drop, so will their allowable plant count. Without enough plants, they can’t grow at their warehouse’s scale. If retail marijuana is then raided, there will be no medicine for suffering patients.

Is this weedless apocalypse possible? The attorneys I met with did predict that the feds would wait, rather than reacting immediately. But if the feds get involved, says Mason Tvert, co-director of the campaign, “they could say, ‘You can’t issue non-medical marijuana licenses.’ But they won’t sit back, let businesses get licensed, and then raid them.”

Again, former dispensary owners might disagree. Many were licensed — only to be shut down.

The licensing process was the only way the state could legally fund the Department of Revenue’s Medical Marijuana Enforcement Division. Non-medical marijuana regulation would be similar.

“They have to pay for their own programs,” Sederberg explained. “They can’t be a drain on the state.”

The Department of Revenue’s former Director of Enforcement Matt Cook (who emphasized that he was not speaking for the department) estimated that the Medical Marijuana Enforcement Division (MMED) collected $8 million from the marijuana industry. And spent it. The MMED is broke. It spent $750,000 on tricked-out off-road SUVs (more vehicles than they had staff to drive them). And it spent around $2 million, Cook confirmed, on a futuristic, live-streaming video room where officials could observe everyone in the industry at work. It was never built.

“They might have completed the first step,” Cook explained, “and never made it to the second.”

An inside source clarified: “The MMED never paid the rest of the money in the contract, so the military contracting firm kept the money.”

These expenses, some believe, explain why hopeless dispensaries were allowed to proceed: The state kept its non-refundable application fee of at least $8,750.

“The inspectors would look at these mom-and-pop operations,” said one owner, “and know they couldn’t make all the upgrades required. But they’d let them try anyway.”

One requirement was state-of-the-art surveillance systems, installed by the few companies approved by the MMED (which got fees from the companies). The cameras were needed for the live-streaming video room that was never built.

When the MMED and these costly requirements were created, some alleged that deep pockets within the industry had lobbied to eliminate their smaller competition. I asked Tvert who had lobbied for HB 10-1284. His list included one group that no longer exists: Coloradans for Medical Marijuana Regulation. A search reveals that the pro-regulation group formed briefly around 1284’s drafting was funded by businesspeople and hired professional lobbyists to meet with lawmakers.

Lobbyists will act again if Amendment 64 passes, the attorneys acknowledged. Application fees are capped, but licensing fees are not; they could “weed out” smaller businesses.

“Hopefully,” said Vicente, “they’ll be less expensive.”

And hopefully, they won’t be spent on fantasy Big-Brother video-streaming rooms or off-road monster trucks. Those decisions will again be left to the DOR.

But this time, if Colorado makes history, the country will be watching. We’ll see a federal reaction that may violate states’ rights. If the feds don’t stop us, Colorado may soon have more money for improving education and stopping violent crime. We’ll have untold revenue and “green jobs” from the new hemp industry. We may inspire the country to imagine dollars better spent — on children, teachers, people. Not enforcing laws that hurt us. Not lobbying lawmakers for corporate interests. Maybe then — when money doesn’t equal political speech — we’d write laws thoughtfully, considering all interests.

And we’d finally write a law that’s truly about legalizing marijuana.

Gilboy owns Colorado Quality Collective, which provides consulting services to medical marijuana businesses.

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This opinion column does not necessarily reflect the views of Boulder Weekly.