Recently, I took a trip out west. From Colorado to California, the bridge between medical cannabis industry, advocacy, and patients connected. Although the purpose of the trip was to learn about the leading laboratory testing methods, standards, and technology – I found myself booking appointments with various advocates and professionals in the San Fransisco area a week before I left. My experience with California’s industry was both enlightening and enjoyable.
Although both States are considered to be among the most established medical cannabis markets in the Nation, some key differences distinguish the two. Both States have had medical cannabis programs in place for over a decade with Colorado establishing Amendment 20 in 2000 and California having Proposition 215 on the books for over 15 years.
Beyond the basic legal structure protecting patients and caregivers, both Cali and Colo have also passed revision bills to further clarify their medical cannabis programs and provide safe access for patients. Both states also have a high number of medical marijuana dispensaries operating in free, albeit different, markets.
Most Americans can remember the patient rights battles of the late 90′s and early 00′s. Chants like “DEA Go Away!” from thousands of sick patients across California showed the Nation the dirty side of a senseless war on drugs and brought to light the Government’s clear waste of resources prosecuting patients like criminals. In 2009, the Obama administration followed the President’s campaign promise and the “Ogden Memo” promised States and patients that the Federal government would not waste tax payer resources in prosecuting medical cannabis operations in compliance with State programs and laws. In Colorado, this Memo caused nearly 700 businesses to enter the market and the State legislature to take a new approach to medical cannabis distribution. Colorado became the first State to establish a State-wide medical marijuana business licensing model.
In Colorado, the Medical Marijuana Enforcement Division (MMED) regulates business owners by requiring clean background checks, extensive and transparent documentation, as well as full tracking and surveillance of every gram of product cultivated and distributed by medical marijuana licensees.
Compare this model to California’s, and one sees a very distinctive difference.
In California, the State leaves medical marijuana laws like zoning and licensing up to each individual municipality and/or county. This ends up creating a myriad of unclear laws that have officials torn between outright enforcement and creating workable regulations. “Wild West” is the term used to describe the volatile, risky, and dynamic California medical marijuana industry. In large part, the social acceptance of liberalized cannabis has prevented restrictive laws and regulations from being set. US District Attorneys in California have continually pressured the industry and its business owners promising recent crackdowns on businesses usurping State laws.
Part of the problem comes from the scrutiny faced by medical marijuana physicians in California who dole out recommendations to patients who never register for a medical marijuana license with the State. To visit a dispensary, California patients need only a recommendation from a doctor to establish an affirmative defense. Since Gov. Schwarzenegger lessened the criminal penalties on all marijuana users shortly after Proposition 19 failed, the fine for illegal cannabis use in California is $100. The cost to visit a doctor is about $50. Once patients add in the cost to register with the State and County, the price to get one’s medical marijuana license becomes more than the fine to use cannabis illegally. Instead of an incentive for people to complete the patient registration process, patients do the bare minimum to see a doctor in order to obtain marijuana. Only a small fraction of medical marijuana patients in California register for a license with the State. In Colorado, medical marijuana centers cannot serve patients that only have a physician’s recommendation. State issued licenses (Red Cards) are required to be verified before patients can access a medical marijuana center in Colorado.
In speaking with a medical marijuana attorney in San Rafael, I learned that the Co-op Model reigns supreme in California; meaning patients form cooperatives wherein they grow and supply medical marijuana to each other. The medical marijuana is then distributed through the members’ co-op dispensary. By belonging to the co-op, or dispensary, patients can purchase medication and also provide product, “at cost”, to the dispensary. The problem, according to the California lawyer, is that each patient/provider can belong to multiple cooperatives. Some growers, for example, belong to hundreds of co-ops. This model creates a dual supply model for dispensaries selling to patients. In one model, growers compete over prices among a plethora of potential buyers (LA is estimated to have nearly a thousand medical marijuana dispensaries). In the other model, dispensary owners also own the cultivation assets used to supply the co-op dispensary. Co-ops are required to be operated as non-profit entities according to California law. Except for a few places like Oakland, these dispensaries are rarely licensed or regulated by city authorities.
In Colorado, owners are required to have full vertical integration. This means each licensee owns 100% of their business, from cultivation to distribution assets and operations. The law requires that 70% of what is produced at the licensed grow facility be sold to retail patients at the licensed dispensary; called a Medical Marijuana Center in Colorado. This requirement facilitates the tracking of product and helps ensure, along with camera requirements, that marijuana isn’t sold outside of the licensed model. California lacks laws that can track marijuana cultivation and distribution and dispensaries are not required to record their operations on film. California also lacks any background checks or applications from owners nor transparency in business operations which puts their industry in a murky light and makes law enforcement difficult and costly. Investigatory measures like applications and background checks help facilitate the role of law enforcement. Making the identification of criminal elements in the Colorado industry much easier. Since enforcement of MMED rules and regulations began July 1st, Colorado has begun to weed out the bad apples.
Even though States like Colorado can show the Feds that they have their industry under control, there is still a cohesive effort on the part of Obama’s administration to undermine the progressive efforts of this industry. From IRS tax code complications to the federal pressure on banks to close medical marijuana business accounts, Obama is waging a senseless war on a prosperous sector of American industry in the name of continued medical marijuana prohibition. This recent policy shift flies in the face of his administration’s promise not to waste resources on participants who are in compliance with State laws. Given the unrest that has formed tea parties and occupation movements across the country, its a bewildering wonder how U.S. District Attorneys can target job creating industries and the safe access they provide for patients. It is even more mind-blowing that patients are being targeted like they were in California a decade ago, with the ATF denying 2nd Amendment rights for the defenseless, but getting caught red handed selling thousands of guns to violent cartels. Cartels who kill as a competitive practice, who license themselves over any government, and who derive 60% of their revenue from illegal marijuana sales in the U.S.
In one year, Colorado has emerged as an industry leader with the most State protection and regulation on the books. Although California still dominates the market in terms of the number of participants and economic power, it lacks the protection that comes with State legitimization through licensing and regulation. Indeed, many other States are adopting the Colorado model as they move forward with medical cannabis reintroduction and industry legitimization.
Many of the advocates I spoke to in Oakland also agreed with this sentiment and have worked to establish licensing with the City to legitimize their coffee shops and dispensaries. As of my trip, there were 4 allowed in the City and Oakland was considering the allowance of 4 more businesses. Over 250 applied for the licenses; resounding a similar story of the economy-derived licensing demand in Washington D.C. when they began their industry model this year. With State and National politicians now seeing the rising economic power that comes with taking cannabis distribution out of the hands of the cartels and into the businesses of the American people, California and Colorado have become prime examples of how medical marijuana business can be operated in the U.S.
Different in their laws, models, and programs; but the same in ending violence along our borders and in revitalizing the economy.
Tags: California medical marijuana, colorado medical marijuana, Colorado MMJ, Colorado MMJ Industry, iComply, marijuana prohibtion, Medical Cannabis Industry, Medical Marijuana, medical marijuana laws, mmj california, patient rights, Politics and Medical Cannabis