The Colorado State Board of Health on Wednesday approved a program through which poor medical-marijuana patients can apply to the state registry for free and not have to pay sales tax on their cannabis purchases.
But the standard the board approved for determining who is poor enough to qualify for the program upset medical-marijuana advocates, who said some indigent patients will still be stuck with a bill. And even some board members expressed frustration that the health department — which has received millions of dollars in application fees since the medical-marijuana program began — couldn't put together a program that includes more patients.
"I just think with however many millions of dollars, we could have done a better job," said board member Joelle Riddle.
The program was prompted by a bill passed in the legislature this year telling the health department to come up with a way for indigent patients to avoid paying the $90 fee when they apply to the state's medical-marijuana registry. Patients who qualify also will receive a special mark on their registry cards that shows they don't have to pay sales tax.
To determine who qualifies, the department decided to rely on other measures of indigence, such as whether the patient receives Supplemental Security Income or food stamps. Ann Hause, the department's director of legal and regulatory affairs, said the health department doesn't have the staffing to do unique evaluations of patients.
"We thought we needed to start somewhere, and this is where we decided to start," she said.
But medical-marijuana advocates said the standard misses some poor patients, including those who receive Social Security disability payments, veterans and others.
Damien LaGoy, a medical-marijuana patient with HIV, said he makes $14 a month too much to qualify for the necessary programs to receive a fee waiver. Each month, LaGoy said, rent, food, health and marijuana payments leave him with too little money left over to afford the application fee.
"In two days, my license expires," LaGoy told the State Board of Health. "I don't have the $90. I have $1.15 in my bank."
The board, on a split voice vote, approved the department's proposal but vowed to revisit the issue to see whether the standards should be expanded.
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Colorado is no stranger to the debate over legalizing marijuana. Medical marijuana has been legal there for a decade now, and storefront medical marijuana dispensaries have popped up like, well, weeds along the state's Front Range -- the majority in Denver and Colorado Springs.
Demand for the product has soared. More than 100,000 people have reportedly registered in Colorado as medical marijuana users -- a pretty large number in a state of 5 million. And, of course, many budding entrepreneurs and avid weed fans have sniffed out a business opportunity. But as the market has grown so have concerns that some not-so-savory characters are profiting from the boom.
As a result, Colorado has enacted new laws aimed at regulating the state's estimated 1,100 medical marijuana dispensaries. Convicted felons, for example, won't be allowed to operate a dispensary -- a rule that the Drug Enforcement Agency estimates will force some 18% of the state's dispensaries to close, according to the Associated Press. Dispensary owners also must apply for a license by Aug. 1 and fork over thousands of dollars in fees to secure that license.
For some municipalities, especially in this time of economic downturn and strained budgets, the idea of new tax revenue from medical marijuana can be very tempting. Marijuana is, of course, still illegal at the federal level, and this current boom has been compared to the days of Prohibition -- when some cities and towns turned a blind eye to the illegal consumption, and often profitable production, of alcohol.
"You have to balance social objectives with economic objectives," says Robert McGowan, a professor of management at the University of Denver's Daniels College of Business. "This is a classic case study in the pull-and-tug between the social issues about whether it should be available -- the medical aspects and the like -- and then the economic ones in terms of the amount of revenue, taxes, etc."
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DENVER - Under one of the many laws that go into effect Thursday, medical marijuana entrepreneurs throughout the state must either open a store or apply for a municipal license. If they miss the deadline, they will have to wait at least a year.
The deadline is the first of many hurdles for medical pot businesses in a new law that takes effect Thursday. House Bill 1284 sets up a licensing and regulation system for Colorado's hundreds of medical marijuana dispensaries, which previously existed in a legal gray area.
In addition to Thursday's deadline to apply for a local license, dispensary owners have until Aug. 1 to apply to the Department of Revenue for a state license.
Pot businesses that miss either deadline will have to wait until July 1, 2011, to apply.
"We needed to draw the line at some point because we need to process 500 or 1,000 applications," said Mark Couch, spokesman for the Department of Revenue.
The first licenses under the new system in HB 1284 will be issued July 1, 2011. The bill puts strict requirements and fees of $7,500 to $18,000 on dispensaries.
Dispensaries will need both a state and local license, and HB 1284 allows cities and counties the power to make stricter rules or ban dispensaries altogether.
Rob Corry, a Denver lawyer specializing in medical marijuana, said his law practice was swamped with work from people trying to meet the deadline.
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