COLORADO MED APPROVES AMENDED RULES

Friends,

On October 9, 2020, the Colorado Marijuana Enforcement Division (the “MED”) adopted amended permanent rules that go into effect on January 1, 2021. The MED’s 2020 rulemaking was not an overhaul as it had been in 2019, but here are some highlights:

  • Rule 1-105.B—All licensees must comply with all public health orders from any state agency and executive orders issued by the governor pursuant to the governor’s emergency powers, and any failure to abide by these orders is cause for sanctions.
  • Definition of “Marijuana Hospitality Business” includes mobile facilities. However, a “Retail Marijuana Hospitality and Sales Business” excludes mobile facilities.
  • Rule 2-220.C—This rule lays out the requirements to qualify as a Social Equity Licensee, including residency requirements in certain types of census tracts, evidence that the applicant or a family member was convicted of a marijuana offense or subject to asset forfeiture related to a marijuana investigation. One or more Social Equity Licensees must own at least 51% of a Regulated Marijuana Business. A Social Equity Licensee may also obtain an Accelerator License to operate at a Regulated Marijuana Business that has been approved as an Accelerator-Endorsed Licensee. McAllister Garfield attorney Dan Hamilton recently wrote about this program and can be reached at dhamilton@mcallistergarfield.com.
  • Rule 2-225.D—This rule provides for reinstatement of a license that has been expired for less than 30 days.
  • Rule 2-225.G—At renewal, not only the Regulated Marijuana Business, but also all CBO entities (holding more than 10% ownership) are required to submit updated information.
  • Rule 2-235.G—The new rule clarifies who is an Executive Officer for purposes of suitability, and includes a CEO, COO, CFO, president, and general counsel. The analysis is dependent on facts and circumstances, and title is not dispositive.
  • Rule 2-245.D—Where a Regulated Marijuana Business or any of its CBOs are subject to an investigation or administrative action, a change of ownership may be delayed or denied until the action is resolved, or if the change of ownership is approved, the new owner(s) may be responsible for actions of the business or prior CBOs and subject to discipline.
  • Rule 2-260.A.1—The MED made permanent the emergency rule allowing temporary modifications in response to COVID-19 without MED pre-approval.
  • Rule 3-230 and -240—Licensees now have more options for the disposal of marijuana waste.
  • Rule 3-315.D—The standard for a licensee to be summarily suspended is “If the State Licensing Authority has objective and reasonable grounds to believe and finds upon reasonable ascertainment of the underlying facts that the Licensee committed a deliberate and willful violation or there is a substantial danger to public health and safety.”
  • Rule 3-330.M—Effective July 1, 2022, vaporizes and inhalers must have an expiration date.
  • Rule 3-336—This rule sets forth the new procedures for a recall of marijuana by a licensee. In particular, a licensee must have a written recall plan. McAllister Garfield has experience drafting SOPs and recall plans. If you’d like help developing these new required plans, please contact Sean McAllister at sean@mcallistergarfield.com 
  • Rule 4-110—This heavily revised rule sets forth the new sampling procedures for marijuana testing.
  • Rules 5-105.K and 6-105.K—These rules describe how medical marijuana patients and retail customers may be served via a walk-up or drive-up window.

Some of these changes codify what the MED has been doing in practice. If you have questions about the new rules, please contact us.

Sincerely,

The McAllister Garfield Team