Senate gives initial OK to Colorado pot dispensary rules |

Senate gives initial OK to Colorado pot dispensary rules

Colleen Slevin
The Associated Press
Aspen, CO Colorado
A marijuana plant is grown under lights at the Boulder County Caregivers in Boulder, Colo. on Friday, July 24, 2009. It's all legal and it's all taxed. But this marijuana dispensary and nearly 60 others that are serving a growing number of medical marijuana users operate with little oversight by state or local authorities. (AP Photo/Ed Andrieski)

DENVER – The state Senate on Wednesday gave initial approval to regulating medical marijuana dispensaries and growers after opening the door to waiving sales tax on pot sales to some patients.

Senators made few other significant changes to the bill, which still allows cities and counties to ban dispensaries and limits individuals, as opposed to regulated shops, from providing marijuana to more than five people. That increases the chances that lawmakers will be able to pass regulations for the estimated 1,100 dispensaries in Colorado before they adjourn next week.

Sen. Nancy Spence, R-Centennial, said the state’s medical marijuana program, approved by voters a decade ago, has become a “runaway train”. She warned colleagues wary of legitimizing the booming marijuana industry that inaction would usher in de facto legalization of the drug.

“If this doesn’t pass there will be more recreational users,” Spence said.

Currently she said there are an estimated 83,000 people who have a doctor’s permission to use medical marijuana in Colorado. An exact count isn’t available because the state has been inundated with about 1,000 requests a day.

Sen. Morgan Carroll, D-Aurora, warned that allowing local bans violates the constitutional amendment voters passed a decade ago allowing medical marijuana. She said that would open the door to a total ban across the state.

“If all did what one did, there is no more Amendment 20,” she said.

While most prescription drugs are tax exempt in Colorado, the state has been treating marijuana much like a vitamin supplement and charging 2.9 state sales tax on all sales.

The bill requires that $2 million in taxes from marijuana sales be spent on substance abuse programs. Senate GOP leader Josh Penry said the state shouldn’t be profiting off patients who rely on the drug. He passed an amendment that requires the health department to come up with rules allowing doctors to exempt patients from paying sales tax when they buy marijuana.

Penry said he opposed the overall bill because it’s a regulatory “quagmire.” It would hire 27 enforcement agents, auditors and administrators paid for with $2 million in fees paid by dispensary owners, growers and makers of marijuana products.

Senators also backed keeping the location of grow operations secret although law enforcement agencies would still have access to the information.

Cities and counties dealing with the proliferation of dispensaries in the last year have been pushing for lawmakers to pass regulations, which will require that store owners be licensed by both the state and local governments.

Dispensary owners, meanwhile, are willing to put up with criminal background checks and audits to give them protection against possible federal drug raids. Some, though, are worried about having to pay thousands of dollars in fees while regulators finalize the details of rules that could end up putting them out of business.

A final vote on the bill is expected Thursday in the Senate. It must then go back to the House where lawmakers will have to vote on whether to accept the changes made in the Senate.