Colo. weighs strategy to guard pot against federal crackdown
Bill would permit immediate change from recreational to medical
DENVER — Colorado is considering how to protect its nascent marijuana industry from a potential federal crackdown, even at the expense of hundreds of millions of tax dollars.
A bill pending in the Legislature would allow pot growers and retailers to reclassify their recreational pot as medical pot if a change in federal law or enforcement occurs.
It’s the boldest attempt yet by a U.S. marijuana state to avoid federal intervention in its weed market.
The bill would allow Colorado’s 500 or so licensed recreational pot growers to instantly reclassify their weed. A switch would cost the state more than $100 million a year because Colorado taxes medical pot much more lightly than recreational weed — 2.9 percent versus 17.9 percent.
The measure says licensed growers could immediately become medical licensees. The change wouldn’t take recreational marijuana off the books, but it wouldn’t entirely safeguard it either. It could help growers protect their inventory in case federal authorities start seizing recreational pot.
The provision is getting a lot of attention in the marijuana industry after recent comments from the Trump administration. White House spokesman Sean Spicer has said there’s a “big difference” between medical and recreational pot.
Sponsors of the bill call it a possible exit strategy for the new pot industry. It’s hard to say how many businesses would be affected, or if medical pot would flood the market, because some businesses hold licenses to both grow and sell marijuana in Colorado.
The state had about 827,000 marijuana plants growing in the retail system in June, the latest available data, more than half for the recreational market.
“If there is a change in federal law, then I think all of our businesses want to stay in business somehow. They’ve made major investments,” said Sen. Tim Neville, a Republican and the bill’s sponsor.
If federal authorities start seizing recreational pot, Colorado’s recreational marijuana entrepreneurs “need to be able to convert that product into the medical side so they can sell it,” Neville said. His bill passed a committee in the Republican Senate 4-1 last week.
But it’s unclear whether the measure could pass the full Colorado Senate or the Democratic House. Skeptics of the proposal doubt the classification change would do much more than cost Colorado tax money.
“It’s a big deal for our taxation system because this money has been coming in and has been set aside for this, that and the other,” said Sen. Lois Court, a Denver Democrat who voted against the bill.
Schools would be the first casualty of a tax change. Colorado sends $40 million a year to a school-construction fund from excise taxes on recreational pot. The tax doesn’t exist for medical pot.
Other items funded by recreational pot in Colorado include training for police in identifying stoned drivers, a public-education campaign aimed at reducing teen marijuana use, and an array of medical studies on marijuana’s effectiveness treating ailments such as seizures or post-traumatic stress disorder.