Colorado weighing strategy for avoiding pot crackdown
DENVER — Colorado is considering an unusual strategy to protect its nascent marijuana industry from a potential federal crackdown, even at the expense of hundreds of millions of dollars in tax collections.
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 “based on a business need due to a change in local, state or federal law or enforcement policy.” The change wouldn’t take recreational marijuana off the books, but it wouldn’t entirely safeguard it either. What it could do is 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 following recent comments from members of President Donald Trump’s 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 were 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 suburban Denver Republican who sponsored the bill.
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.