A group of Colorado lawmakers wants to increase oversight of the state’s marijuana businesses, but the cannabis industry is ready to fight the proposal.
Senate Bill 149, a nonpartisan bill introduced on March 7, proposes new reporting requirements for such marijuana business violations as sales to underage minors, contaminated product recalls and black market activity. The measure also calls on the Colorado Marijuana Enforcement Division, the state’s regulator of marijuana businesses, to “balance the amount of influence that the marijuana industry has” on pot-related policy and rulemaking.
Improve Marijuana Industry Regulation
The bill requires future contracts for the seed-to-sale tracking system to be awarded pursuant to a transparent, online, and dynamically competitive process. The bill requires the state licensing authority to produce an annual report regarding its enforcement activities. The report must include:
- The number of underage compliance checks performed in the previous calendar year;
- The number of underage sale violations in the previous calendar year, including the name of the license violator, how many violations were the result of underage compliance checks or tips, and the sanction or sanctions imposed for each violation; and
- A description of the black or gray market enforcement activities that the state licensing authority engaged in, including the dates of the activities, any violations found, and the result of those violations if known.
The bill requires the state licensing authority to produce an annual report regarding licensing violations. The report must be organized by month, include the name of the violator and the violation location, and identify the violation and the sanction or sanctions imposed and if the sanction is a license revocation or voluntary surrender of a license and the reason for the revocation or voluntary surrender.
The state licensing authority shall maintain a free searchable database on its website related to compliance check records and minor in possession of marijuana records and an online method for submitting an anonymous tip related to licensing violations.
The bill requires the state licensing authority to conduct at least 2 compliance checks a year at each medical and retail marijuana center.
The bill requires regulatory penalties related to underage sales to be based on the number of violations and any injury or death that occurred as a result of the violation.
The bill requires the state licensing authority to promulgate rules regarding:
- Product recalls, including a requirement for the issuance of a health and safety advisory when a product is recalled that includes the name of the product, the timing of when the consumer would receive the advisory, the places where the product was sold, the time period when the product was for sale, the requested actions that the state licensing authority may direct to a seller, cultivator, or manufacturer, and any other additional information that would assist the public; and
- Timelines and deadlines for notifying a licensee of an alleged violation; a licensee’s response to an alleged violation; and a licensee’s compliance with any sanction imposed, which must require, in the case of an uncontested violation, that the licensee has 90 days to comply with the sanction.
The bill directs that when the state licensing authority convenes a work group, task force, or other group to assist in developing rules or policies that involve public health and consumer safety, the state licensing authority shall make every reasonable attempt to have broad representation from non-marijuana industry parties on the work group, task force, or other group. The bill requires the state licensing authority to provide any written materials received from a member of the group or task force to all members of the group or task force within 7 days after receipt of the material; except that any proprietary information must be redacted from the material.
The bill requires that when the state licensing authority reports a voluntary surrender of a license that is the result of a settlement or agreement with the licensing authority, the report shall designate the action as “voluntary surrender – licensing violation settlement”.
(Note: This summary applies to this bill as introduced.)
Proponents of the bill say that it’s intended to better protect Colorado children and align state policies more closely with alcohol and tobacco enforcement, but marijuana industry stakeholders worry that it’s an attempt to push for more restrictions on the business.
Colorado marijuana dispensaries passed underage sales checks at a 95 percent rate in 2021, according to the MED, slightly down from 97 percent in 2020 and 2019. But it’s not the pass-fail rate that concerns state Senator Chris Hansen. He wants more compliance checks at dispensaries, and he wants the names of offending stores to be made public.
“It doesn’t change regulation. It’s about making sure the MED has the resources they need to do these checks,” Hansen says. “It’s the availability and accessibility [of violation information], and putting it on par with what we’re doing in tobacco and alcohol.”
The MED conducted 604 underage compliance checks at dispensaries in 2019, according to department data, but that number dropped to 118 in 2020 and 80 in 2021. A MED memo sent to Hansen says the number of checks dropped because of “COVID-related impacts,” and that the department “intends to increase the number of underage sales checks to align more closely with prior years.”
But Hansen, as well as state Senator Kevin Priola and state Representatives Judy Ambile and Mike Lynch, all co-sponsors of SB 149, want that increase written into law. Their proposal would require the MED to conduct underage sales checks twice a year at every dispensary in Colorado.