The passage of Proposal 1 has cleared the way for legal adult use of marijuana in the state. The new law takes effect 10 days after the official declaration of the vote (which will probably occur around mid-November). At that point it will be legal, at least under state law, for people at least 21 years old to possess up to 2.5 ounces of marijuana on their person and up to 10 ounces as long as it’s locked up at a residence, and they can grow as many as 12 plants in their home. Of course marijuana remains a Schedule 1 controlled substance at the federal level, so there are still legal risks.
What is perhaps more consequential is that the new law provides for a legal recreational marijuana industry, including growing operations, testing facilities, distribution, and retail sales. There is the taxation piece, too, which shouldn’t be overlooked, and if Colorado’s experience is any indication, it could amount to significant funds flowing into the state’s schools, roads, and local municipalities.
Despite the “legality” previously described, much of the infrastructure for legalized adult-use marijuana will be developed over approximately the next 18 months. During that time, the Department of Licensing and Regulatory Affairs (LARA) will have 12 months to complete the regulatory framework for licensing, and then the actual application process will begin. Only after the issuance of those licenses will we start to see commercial adult-use marijuana facilities.
It remains to be seen exactly how the regulatory structure will shape up for recreational marijuana, especially since the state is still trying to nail down exactly how to implement the Medical Marijuana Facilities Licensing Act. We may see some overlap between the medical and recreational marijuana industries, and LARA has no doubt learned a few lessons on how to process applications. However, it is unlikely we will have a clear picture of how the state will regulate recreational marijuana until late in 2019.
In the meantime, please be sure to check out ICLE’s upcoming webcast (available February 8, 2019), in which our own Rachael Sedlacek will be interviewing Bob Hendricks, Daniel Grow, Catherine Kaufman, Jennifer Domingue, and Craig Aronoff about the expected impact of adult-use marijuana. We plan to cover advising businesses, criminal defense, employment, municipalities, and banking. Feel free to e-mail me suggestions for questions to ask the panel before the end of the year.
(Note: Special thanks to Bob Hendricks for his input about the new law.)