By Stephanie Simon, published on the WallStreetJournal
Colorado state regulators are putting the final touches on a fat stack of rules aimed at monitoring, recording and tracking every aspect of the booming medical-marijuana industry, from seed to sale.
The regulatory system—more rigorous and comprehensive than in any other state—will likely require pot growers to place tags on every plant and train security cameras on their cultivation rooms around the clock.
Cannabis dispensaries, meanwhile, will likely be required to record high-resolution video of every customer’s face and photo identification and then link that footage to a computer record of each purchase. Even the moment when the dried weed is weighed for sale will have to be captured on video, according to draft regulations now being finalized.
State regulators and local law enforcement—who say they are determined to prevent medical pot from being diverted to the black market—will have the authority to review any surveillance tape at any time, without a warrant. “We don’t ask. We just go look,” said Matt Cook, senior director of the state’s medical-marijuana enforcement division.
That’s not popular with patients, who say they shouldn’t have to sacrifice their privacy to get access to medication. Some lawyers who work with the medical-pot industry say the regulations might be vulnerable to a constitutional challenge. But state officials say they have the right to impose strict controls, since marijuana remains a controlled substance under state law, legal only for registered patients and only in specified quantities.
“You give up a lot of your Fourth Amendment rights when you’re dealing with a controlled substance,” Mr. Cook, senior director of the state’s medical-marijuana enforcement division said.
Medical marijuana is legal in Washington, D.C., and 15 states. Many of them have minimal regulations aimed at limiting the amount of marijuana that a patient can legally possess and cultivate. Other regulations tend to be a patchwork: Some states require patients to register, but some don’t. Some allow dispensaries, while others rely on patients to grow the pot themselves or obtain it from registered “caregivers.” New Jersey, Arizona and Washington, D.C., are all working on comprehensive regulations. Meanwhile, individual cities and counties in many states are busy drafting their own restrictions.
Colorado has led the way in regulation. Anyone seeking to open or invest in a medical-marijuana business must fill out a 22-page form that asks for character references, criminal records, bank statements and income-tax returns—even copies of the applicant’s college diplomas and, if applicable, divorce decrees.
Pharmaceutical pot is a growth industry in Colorado. The state has 113,000 residents registered as medical-marijuana patients, and several thousand new applications coming in every month.
So far, 1,218 pot farms, 808 dispensaries and 318 businesses that infuse candy, olive oils, pizzas and other edibles with marijuana have applied for state licenses. Every facet of their operations will soon be governed by the new regulations, which run about 100 pages and are likely to be phased in beginning early next year.
The state’s goals: to keep track of every ounce of cannabis that is part of the legal medical-marijuana industry; to keep the drug from the black market; and to make it easy for law enforcement to spot and investigate suspicious behavior. For example, investigators could detect if one patient is buying pot at multiple outlets in a single day or if a greenhouse worker is slipping cannabis seedlings into his pocket, state officials said.
The state Department of Revenue, which will enforce the rules, plans a full-time staff of 40 to 50, funded entirely by annual licensing fees of up to $18,000 imposed on pot-related businesses, said Julie Postlethwait, a department spokeswoman.
Regulators scrapped some early proposals, such as requiring patients to submit to a retinal scan before each purchase, but the draft rules are still “far more bureaucratic and burdensome than in any other state,” said Keith Stroup, legal counsel for NORML, which works for legalization of marijuana.
Mr. Stroup predicted, to his disappointment, that the regulations would become a model for other states.
In Colorado, patient advocates have raised concerns about invasion of privacy and warned that dispensary prices will rise to cover the cost of complying with the regulations.
“There’s a tipping point where an overly regulated system is going to send a lot of people back to the black market” to buy their marijuana, said Dan Pope, a resident of Longmont, Colo., who says he takes the drug to ease symptoms from his muscular dystrophy.
But for all their anxiety, some in the industry can’t help but feel a bit delighted that the state is taking them so seriously.
“For years, the only discussion was, ‘How long should we lock people up for possessing marijuana?’ ” said Brian Vicente, executive director of Sensible Colorado, a patient-advocacy group. “Now we’re discussing what the font should be on the label of a medical-marijuana brownie.”