Colorado legislators passed laws on two important marijuana issues in the final days of the 2015 session – one asking voters in November to allow Colorado to keep marijuana taxes collected in fiscal year (FY) 2014-15 (House Bill 1367) and the second regulating medical marijuana primary caregivers (Senate Bill 14).
Both bills passed with bipartisan support and addressed concerns raised since retail marijuana sales became legal on January 1, 2014.
1. Show Colorado the Marijuana Money
House Bill 1367 places a measure on the November 3 ballot asking voters to let Colorado keep an estimated $58 million in FY 2014-15 marijuana revenue. The tax dilemma stems from a provision in Colorado’s Taxpayer’s Bill of Rights (TABOR) that is widely expected to be triggered this year. (More detail is available in CHI’s issue brief analyzing Colorado’s first year of legal retail marijuana.)
Passing HB 1367 to address those refund concerns was top of mind for legislators. Bill sponsor Sen. Pat Steadman (D), argued it was a way to “keep faith” with the initial intent of Colorado voters for retail marijuana to be taxed to support schools and other efforts.
If voters pass the measure, public schools will receive $40 million for capital construction. An additional $12 million will support programs addressing marijuana education and prevention, substance use screening and law enforcement training.
The bill also establishes refund mechanisms should voters reject the measure such as temporarily reducing the state special sales tax on retail marijuana from 10 percent to .01 percent and refunding marijuana excise taxes to cultivators.
But there’s another TABOR-induced wrinkle that the November ballot cannot avoid or resolve. If a refund is required, as expected, marijuana excise and special sales taxes must be reduced to zero, at least for a day. This must happen even if voters approve the ballot measure. HB 1367 sets this tax holiday for September 16, 2015, and it will result in estimated losses of $3.6 million in excise taxes and $100,000 in special sales taxes.
And that’s not all. HB 1367 included other provisions that will become law, regardless of the outcome at the ballot box. Here’s a round-up:
- Retail marijuana tax rates are going down. Beginning July 1, 2017, special sales tax rates will be lowered to eight percent from 10 percent. All future marijuana excise tax collections will support public school construction, no longer limited to the $40 million specified in Amendment 64. Cities and counties that do not allow retail marijuana sales but are located in or near those that do can now tap a grant program to fund youth marijuana prevention services, law enforcement or other initiatives. And the Marijuana Enforcement Division must report on its website how marijuana revenues are spent.
- Lawmakers gave themselves authority to spend marijuana tax revenue for any purpose. Current marijuana spending is mostly limited to marijuana-related issues. Whether lawmakers exercise their authority and spend future revenues differently will be watched closely.
2. Taking the Measure of Medical Marijuana
Lawmakers want to establish a well-regulated legal retail marijuana market that keeps the federal government from stepping in, and this goal required them to take a closer look at medical marijuana. SB 14 tightened up previously loose regulations in the medical market to improve oversight of this significant source of marijuana in the state.
SB 14 created four types of relationships that primary caregivers can have with medical marijuana patients. These include a parent caregiver; an advising caregiver who assists patients with dosing and product selection; a transporting caregiver who purchases and transports medical marijuana to homebound patients; and a cultivating caregiver who grows marijuana for a patient.
Cultivating and transporting primary caregivers must now register with the Department of Revenue and provide information such as the medical marijuana registry number of their patients, the number of plants being grown or transported and the location of the cultivation site. SB 14 places a limit of five on the number of patients that caregivers can serve and a limit of 36 plants that can be cultivated although it allows exceptions, including for medical necessity and for patients living in areas with limited access to medical marijuana centers.
Patients growing more than six plants for their own use are encouraged to register voluntarily. And SB 14 sets a hard limit that only licensed medical marijuana businesses may grow more than 99 plants.
Other provisions in the new law include establishing guidelines to assist physicians in determining whether to recommend medical marijuana for their patients. School districts may also adopt policies that allow parent caregivers or authorized medical professionals to administer medical marijuana to students in the patient registry while on school grounds.
SB 14 will give lawmakers and law enforcement a better understanding of the size and scale of Colorado’s medical marijuana market. The question will be whether the new regulations curb potentially inappropriate medical marijuana use, or only serve to limit access for patients in need.