Crackdown: Colorado’s marijuana regulator issues threats 2 weeks before Cannabis Cup, 4/20
Outrage has spread among some Colorado cannabis companies after the state regulator sent out a bulletin on Friday warning of consequences for using any marijuana products for marketing or promotional purposes outside of their licensed facility.
The Colorado Marijuana Enforcement Division sent a warning which threatens the revocation of licenses if they transfer or display any marijuana products at the upcoming Cannabis Cup and future trade shows.
Colorado’s MED regulates cannabis within the state, issuing “privileged” licenses for cultivation and sale of marijuana products only at specific locations. Regulations basically allow for marijuana to be possessed legally by the company only at licensed facilities, such as the dispensary stores and property used for growing or processing marijuana. The issued bulletin concerns the MED’s regulation of the transfer of marijuana products while off the premises of the specific facilities licensed.
The move is seen by many as malicious and harmful to the industry as this could have been announced sooner that 2 weeks before the 3 day trade show, April 18-20. The crackdown has not affected the official competition as High Times has contracted MED licensed Colorado residents to receive and process the samples, but rather the problem is seen as making the environment unfriendly to Colorado companies. Industry participants see the warning putting Colorado companies at a disadvantage to competitors from other states like California and Washington. The Colorado MED is not responsible for regulating those out of state companies, who would not have much to fear in bringing their products to the show.
Cannabis Cup awards are given out to vendors for submitted samples and can mean significant sales growth if marketed properly. It is common practice for vendors to give away samples at Cannabis Cup events and other festivals to help with marketing and branding.
Colorado’s legal environment has continued to evolve relating to marijuana consumption in commercial businesses. The Cannabis Cup is open to the public, which places a web of regulations on the transfer and consumption of marijuana at the show. Designated areas allowing legal consumption of marijuana products will be set up inside the show and will enforce age verification for adults 21 and older with valid identification.
The move comes as Colorado MED officials have been targeting violations, including shutting down dispensaries, setting new rules for edible products and now considering health restrictions to prevent overuse of chemicals, and reduction in heavy metals and fungi on marijuana. The City and County of Denver has also been cracking down on public use of marijuana, which is still illegal though it results in a citation, not arrest. City and County officials have also been increasingly strict about public festivals celebrating marijuana, such as the huge 4/20 Rally where it is expected police will be actively handing out citations to those smoking as reported by TheCannabist.
Requests to the Colorado MED for comment on the bulletin were not returned.
While licensees may be aware of the legal requirements on the licensed premises, high profile cannabis events, trade shows, industry marketing, and festivals around the state generate a number of inquires to MED about what business or establishment-related activity may be permissible off the licensed premises.
Typically those inquiries focus on whether an owner or their employees may transport Medical Marijuana or Retail Marijuana flower or products from licensed premises to such events for marketing and promotional purposes (e.g. for display, providing samples, competition, sale or donations, etc.). Statute clearly mandates that marijuana produced within the regulated system must remain in the closed system (and only transported between MED licenses premises) until final sale to a patient or customer, and may not be consumed within any licensed premises. No owner or employee may enjoy the privileges provided by a MED business license (the ability to lawfully cultivate, process and sell marijuana within the state of Colorado) at any off-premises site.
Medical or Retail Marijuana licensee owners or employees should not use personally purchased flower or product as a means to avoid the intent of the statute and regulation prohibiting off-premises display and sale of marijuana.
Colorado statute and rule does not preclude a MED licensee from participating at an event, trade show, or festival off-premises, in order to distribute coupons, display graphics or hand out printed material. But in order to diminish the potential for improper conduct at an event or festival, Colorado licensees are strongly encouraged to locate any booth or exhibit table in an area away from and separated from any area designated for consumption of marijuana. Similarly, licensees are encouraged to avoid any participation in which the licensee might appear to be facilitating potentially illegal conduct,
• Pursuant to C.R.S. 12-43.3-901(2)(a), , and C.R.S. 12-43.4-901(2), it is unlawful for a person to buy, sell, transfer, give away, or acquire medical marijuana, retail marijuana, or retail marijuana products except as allowed pursuant to these articles or Section 16 of articale XVIII of the state constitution.
Conduct outside the protections of the licensed and regulated market under C.R.S. Title 12, or authorized under Amendments 20 or 64, may trigger criminal liability under C.R.S. Title 18, to include:
• C.R.S. 18-18-406 Unlawful dispensing, sale, and distribution of marijuana or marijuana concentrate.
MED will continue to work with Colorado licensees to promote a strong and legitimate regulatory framework for the Colorado marijuana industry. MED will hold both business and individual marijuana licensees responsible for the violations of state statutes and regulations. Failure to abide by the statutes and regulations may result in a range of sanctions, up to and including the suspension or revocation of marijuana business or occupational licenses in addition to possible criminal charges and penalties.