Colorado is weighing a unique strategy to protect its nascent marijuana industry from a possible federal crackdown, even at the expense of hundreds of millions of tax dollars.
A pending bill may permit pot growers and retailers to re-categorize their recreational weed as medical marijuana if a change in federal law occurs.
It’s the boldest attempt yet by a marijuana state to avoid federal intervention in its weed industry.
The bill would permit Colorado’s approximately 500 licensed recreational marijuana growers to reclassify their pot. A switch would cost the state over $100 million annually because Colorado taxes medical pot more lightly than recreational at 2.9% versus 17.9%, The Associated Press reported.
The measure indicates that licensed growers would immediately become medical suppliers “based on a business need due to change in local, state or federal policy.” The change wouldn’t take recreational marijuana off the books, but it wouldn’t safeguard it either. What it may do is aid growers protect their inventory in case the feds start to seize recreational marijuana.
The provision is gaining much attention in the marijuana business after recent comments from President Trump’s administration. White House spokesman Sean Spicer has stated that there’s a “big difference” between medical and recreational weed.
Sponsors of the bill refer to it as a potential exit strategy for the pot industry. It’s difficult to say how many businesses would be impacted, or if medical pot would take over the market, because some businesses have licenses to grow and sell marijuana in Colorado.
The state had roughly 827,000 marijuana plants growing in the system in June. Over half were for the recreational industry.
“If there is a change in law, then I think all of our businesses want to stay in business. They’ve made major investments,” Senator Tim Neville, a Denver Republican who sponsored the bill, said.
If authorities start seizing recreational weed, Colorado’s recreational entrepreneurs “need to be able to convert that product into the medical side so they can sell it,” Neville added.
It’s not clear whether the bill could pass the full Colorado Senate or the Democratic House. Opponents of the bill believe that the change would do much more than cost Colorado tax dollars.
“It’s a big deal for the taxation system because money has been coming in and has been set aside for this, that and the other,” said Senator Lois Court, a Denver Democrat who opposed the bill.
Schools would be the first to be affected by a tax change. Colorado spends $40 million a year on a school-construction fund from excise taxes on recreational marijuana.
Other items paid for by recreational pot in Colorado include police training for identifying drivers under the influence, a public-education campaign targeted at reducing teen drug use, and for medical studies on marijuana’s effectiveness in treating illnesses such as seizures or post-traumatic stress disorder.
The bill comes in the midst of mixed signals from the government on how the Trump administration intends to address states that aren’t enforcing federal drug policies.
Spicer said that Trump understands the pain and suffering many people, especially with terminal diseases, endure “and the comfort that some drugs, including medical marijuana, can bring to them.”
However, Attorney General Jeff Sessions has expressed doubts about marijuana’s medical utility.
“Medical marijuana has been hyped, maybe too much,” Sessions said in a speech in Richmond, Virginia.
Marijuana proponents believe that giving the industry a choice to keep their inventory legal is an important idea for recreational pot states. They indicate that a change in federal policy wouldn’t make the drug disappear from the eight states that permit recreational use, along with Washington, D.C.
“It would be harmful to the state if it reverts to an underground market,” Mason Tvert, a spokesperson for the Marijuana Policy Project, said.
If the bill gets passed, Colorado would be the first state to take action to shield producers from a federal crackdown.
Other places such as California are considering possibilities that would bar local and state law enforcement from collaborating with federal authorities on probes into cannabis operations that are legal in their areas.
Meanwhile, members of Congress from some pot states have talked about preventing federal intervention. Congress could recategorize weed so medical use is permitted, or it could try to block federal enforcement of marijuana prohibition through the federal budget.
However, the proposed change may be an unrealistic effort.
Medical and recreational weed are the same product. The only difference between them is how they are used, and the U.S. Controlled Substances Act says weed has no medical benefits. Federal health regulators have dismissed repeated efforts to carve out a legal place for marijuana use by the sick.
Sponsors acknowledge that there are no promises that reclassifying pot as medicine would prevent a federal crackdown.
However, they contend that Colorado shouldn’t sit by and wait to see if the administration begins implementing federal drug law by attacking businesses that are legal in the state.