Recent Colorado Bills Related to Cannabis and Hemp

This past legislative session, the Colorado General Assembly passed numerous bills related to cannabis and hemp. The following list highlights key points from a few bills that are of practical significance to operators. Please note the MED will conduct a rulemaking in the fall to implement many of these new laws and the following summary is just the highlights of each bill and not a detailed analysis.

• Vertical Integration Becoming Voluntary for Medical Marijuana Businesses: Vertical integration for medical marijuana businesses is being phased out and will become entirely voluntary in mid- 2019. Beginning July 1, 2018, the 70/30 rule will change to 50/50, excluding trim. Then, after July 1, 2019, the vertical integration requirement will be eliminated altogether.
• Marijuana Waste Can be Transferred:  A first of its kind bill allows licensees to transfer certain marijuana waste out of the regulated system to non-licensees for the exclusive purpose of producing industrial fiber products. This bill is significant because it expands the use of cannabis to outside the regulated market.
• Marijuana Sample to Employees for Business Purposes: Cultivators and manufacturers can now provide samples of their concentrates and products to their managers for quality control and product development purposes. This bill is also significant because it allows more flexibility in inventory tracking and recognizes the practical realities associated with developing products for consumers.
• Centralized Marijuana Distribution Permit: This bill allows for more business flexibility. The bill creates a centralized distribution permit that authorizes temporary storage of marijuana products and concentrate on a cultivator’s licensed premises prior to transfer to the cultivation’s commonly-owned store(s). The bill sets forth storage restrictions, including that storage may be for 90 days or less.
• Hemp Products Not Automatically Deemed Adulterated or Misbranded: This bill expands the lawful uses of industrial hemp in Colorado. Colorado law now clarifies that food and cosmetics are not adulterated or misbranded by virtue of containing industrial hemp. Moreover, the bill permits under Colorado law the sale of industrial hemp products by modifying the Colorado Food and Drug Act, which will create new business opportunities within the hemp industry.
• FDA Cannabidiol Drug Use: The Colorado Controlled Substances Act was amended to change the definition of “marijuana” to exclude prescription drugs approved by the FDA and dispensed by a registered pharmacy or prescription drug outlet. This change also clarifies that if the FDA approves a CBD-derived drug – such as Epidiolex – then dispensaries will not be able to sell the product because the bill does not restrict or otherwise affect regulation of, or access to, marijuana or industrial hemp and derivatives therefrom, as authorized by the Colorado Constitution and applicable statutes.