At Simplifya, we like to get as much face-to-face time as possible with other members of the cannabis industry. On any given night, you can find our team attending rule-making hearings, trade shows, and networking events like Tuesday night’s CannaGather event featuring Marijuana Enforcement Division Director Jim Burack and Deputy Director Dominique Mendiola.
We mobilized the regulatory affairs and sales teams to not only attend, but sponsor this event because we knew it would offer a glimpse into the future of cannabis regulations in Colorado. As you may have heard, along with a new gubernatorial administration, Colorado ushered in a flurry of new marijuana bills. And, the directors had a lot to say about the changes coming down the pike…
When Colorado drafted its original marijuana laws, they included a provision that allows those rules to expire in September 2019. However, because Colorado’s industry is thriving, no one really wants to see that happen! Therefore, the legislature passed a sunset bill to extend these rules until 2028.
Strikingly, the bill goes further than simply extending the rules; it also includes a number of changes that will be implemented in the coming year. For example, rules for medical and recreational cannabis will be combined, although they will still be taxed differently.
Additionally, rules for incorporating hemp into cannabis products are coming, as are more protections for both customer and patient personal information.
The directors seemed most excited by the new provisions that will streamline certain processes. Not so surprising, considering that streamlining regulations and agency proceedings will make their jobs simpler and easier
They lauded the new rules for disclosing people who have financial interests in a cannabis business. According to Ms. Mendiola, they reduced the number of interest holder classifications from seven to three, and according to Mr. Burack, they raised the bar for how large of a financial interest requires disclosure.
They also gave a well deserved shout out to provisions that will make it easier for recyclers to accept cannabis waste, as well as a provision that loosens the restrictions on what kind of convictions disqualify people from working in the industry.
In Colorado, if you discharged a felony conviction within five years, or a drug-related felony within 10 years, you were banned from the industry. The new rules will only ban those with felony discharges less than three years old, with no extended period for drug felonies. This is a small step, but it hints at the fact that Colorado is feeling the impact of the nationwide push for social equity in the industry.
New License Types
Other cannabis bills currently making waves will legalize home delivery, public and out-of-state investment, and social consumption. The directors informed us these bills will all require the addition of brand new license types (hoorayyyy!).
As with the implementation of adult-use cannabis, medical actors will get first play at home delivery. According to Ms. Mendiola, medical deliveries will get a one-year head start before adult-use deliveries will go into operation. The directors did not indicate that the same protocol would take place for social consumption.
They did clarify that there will be two different types of what they are calling “hospitality establishments.” One type will be a BYOC (bring your own cannabis) establishment where guests can bring product in from elsewhere to consume on site at the establishment, while the other will include both sales and consumption at the same site.
Burack Explains Accelerator Licenses
But the biggest surprise in regard to license types for this analyst came from Mr. Burack. Apparently the MED will be implementing what he called “accelerator licenses,” which will allow for a larger actor to provide an incubator for a number of smaller actors who will presumably have fewer regulatory hurdles than traditional licensees.
The directors wrapped it all up with a not-so-subtle reminder that hemp will be regulated by the Department of Agriculture, and anyone with hemp questions should send them their way instead of to the MED. But…that didn’t stop the audience from immediately asking two hemp questions during Q&A.
This all might seem dry to some of you, but to a regulatory analyst, it was a rare glimpse inside the new regime that will be taking root in the coming years. Huge changes are coming to the industry and they will benefit consumers and operators alike.
Lastly, the Directors dropped multiple hints that in order to successfully implement all these rules, they still need to hear from you, the public. There will be a number of public hearings during this upcoming notice and comment period. We hope to see you there!