Colorado Legislature Takes Step to Harmonize Medical and Retail Marijuana Laws

Author: Jeff Wilson, Esq.

The laws governing Colorado’s medical and retail marijuana businesses share many common elements, but also have a few key differences. However, the state legislature recently narrowed such differences with the passage of House Bill 17-1034, which became law on March 16, 2017.

Broadly speaking, this new law updated the state’s medical marijuana laws to more closely resemble the retail marijuana laws. In certain cases, the law provided statutory authority for medical marijuana rules that had already been enacted by the Colorado Marijuana Enforcement Division (“MED”).

First, the law creates an operator license for medical marijuana businesses. Now identical for both medical and retail businesses, an operator license allows its holder to contract with a marijuana business to run operations in exchange for up to fifty percent of the business’s profits.

Second, the law permits manufacturers of medical marijuana-infused products (“MIPs”) to buy and sell medical marijuana and infused products directly from other medical MIPs. This change removes the prior circuitous requirement that all transfers of medical marijuana (including trim) and medical infused products must pass through a medical marijuana center (“MMC”).

Third, the law gives businesses one chance to remediate medical marijuana that failed a microbial test. Previously, a failed microbial test resulted in immediate destruction. Now, a business may extract the cannabinoids from marijuana that failed microbial testing to create an infused product. If the resulting infused product passes retesting, the product may be sold. A second failed test requires destruction.

Fourth, the law limits each medical marijuana-infused product to be produced from medical marijuana and/or medical marijuana-infused products from a total of no more than five different MIPs and MMCs. Different strains and different infused products from a single MMC or MIP do not implicate this rule.

Finally, the law allows all medical marijuana businesses to change location to anywhere in the state, provided the state and new local jurisdiction approve the change. Previously a medical business could only move within its local jurisdiction.

Given that House Bill 17-1034 took effect immediately upon signature by Governor Hickenlooper, the MED is already implementing all of these new changes without the need for any additional rulemaking.