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Colorado lawmakers on Wednesday introduced a measure that, if approved, would place a ballot proposal before voters this fall that contains changes backers say would improve consumer safety and overhauls how the marijuana industry is taxed.
The proposed ballot initiative would fund a testing program, in which regulators would randomly buy marijuana products from dispensaries and test them for contaminants. Notably, it puts the responsibility for testing oversight in the hands of the state health department.
It would overhaul the current testing regimen, which allows Colorado marijuana manufacturers to send samples to labs for required testing before they can be sold. Critics contend the current system has allowed contaminated products to slip through to consumers because companies can choose their own samples. Instead, independent labs or state officials would collect samples.
Advocates of the legislation said the changes are needed due to contaminated products ending up in dispensaries, a problem highlighted in a January investigative report by The Denver Gazette and ProPublica.
The news outlets found that, although Colorado was the first state in the nation to set up a regulatory framework for the sale of recreational marijuana, other states that followed Colorado’s lead have since set up more robust regulations that Colorado has not adopted.
Twenty-six states and the District of Columbia, for instance, don’t allow manufacturers to self-select samples for testing, requiring lab personnel instead to collect samples to ensure manufacturers don’t cherry-pick products for testing while holding back contaminated products.
A leading supporter of the legislation, Justin Singer, the CEO of Denver-based Ripple, a marijuana edible manufacturer, said the proposed safety measures would cost $600,000 annually. He argued that the changes would restore faith in the state’s regulation of the first retail marijuana market in the nation, which he said had been “absolutely immolated in the last four years.”
“I have long believed that consumer protection is industry protection,” Singer said. “The more consumers value regulation, the more regulation protects them, the more willing they are to participate in the market.”
No fiscal analysis was attached to the legislation, which is unusual. Singer said there is a dispute over the cost. He said Gov. Jared Polis privately has pushed for a $30 million fiscal note because the governor has said the safety provisions would require construction of a new state health department building, which Singer disputes.
The measure would broadly shift taxes applied to marijuana at manufacturing stages, which regulators say have been plagued by fraud and deception, to when products are sold in dispensaries. The potency of a product would also help determine how a product is taxed.
Legislative council staff would monitor the new taxation system and suggest changes to proposed tax rates to the legislature to ensure the revenue raised “is not substantially significantly higher or lower than the average tax revenue over the previous years,” according to the proposed legislation.
Oversight of testing of marijuana products would move from the Marijuana Enforcement Division in the state Department of Revenue to the state Department of Public Health and Environment, according to the provisions in Senate Bill 26-161, which is sponsored by Sen. Kyle Mullica, a Democrat from Thornton, and Marc Snyder, a Democrat from Colorado Springs.
The health department also would be required to establish a lab that would set “validated methods and benchmarks” for testing of cannabis products and conduct off-the-shelf testing of products.
Singer said legislators “are actually in a mood to tackle this,” but he added that efforts to close a budget gap are also taking up a lot of energy at the legislature.
“It’s a crowded legislative agenda, but I think there’s a huge appetite for this,” he said.
Officials with the state’s Marijuana Enforcement Division declined to comment, and officials with the Colorado Department of Public Health and Environment did not immediately respond to requests for comment.
Colorado Leads, a cannabis industry association, has come out in opposition to the legislation.
Christian Sederberg, general counsel for Colorado Leads, said the changes to how marijuana is taxed would favor edible products to the detriment of other goods, such as shatter, a highly potent product used in dabbing. And, he said, tackling such significant changes with just four weeks left in the legislative session is not feasible.
“The governor is concerned with overregulation and would look at whether this legislation would deter businesses, decrease revenue, increase crime and eliminate jobs,” a spokesman for Polis, Ally Sullivan, said in a prepared statement. “The governor will review the final bill if it reaches his desk.”
If the act is approved, the state would have to start publicly posting data related to contaminant findings and adverse events. Consumers would also be allowed to submit products for testing to private labs or to a state lab, a practice the state currently does not allow.
When marijuana is required to be tested would also change if the voters pass the ballot initiative. Currently, marijuana is tested at multiple points in time, including when it is sold to a manufacturer, as well as after it goes into a finished product. Instead, testing would only be required on finished products, such as vapes and edibles, before they could be sold in a dispensary.
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