Denver's Year in Marijuana: Lessons Learned in a Saturated Market

2. The MILE HIGH CITY: A Year Later… Marley Bordovsky Assistant Director Prosecution & Code Enforcement Denver City Attorney’s Office

3. CWAG Conference 2015 • What challenges has Denver confronted over the past 1-1/2 years • Why is there still a black market for marijuana? • Open Blast Hash Oil production • Non-licensed grows • Home grows • Pesticide contamination

4. A year later….lessons learned • We’re still dealing with the same issues – but we’re a lot smarter now….. • The black market isn’t going away. • Home grows are still a problem. • Non-licensed grows are fewer and harder to find. • Pesticide contamination isn’t going away either. • Our zoning and licensing decisionshave created unintended consequences for poorer neighborhoods • Advertising – some are pushing the limits. • Hemp– what’s the difference? • Social Consumption – ballot initiatives this November

5. What we’ve learned so far… • Think about your regulatory structure sooner rather than later! Learn from others and anticipate the issues. • Build relationships with other agencies now. AS MANY AS YOU CAN – city, state, industry, community, business. • It’s easier to start slow with a measured approach, than to “put the toothpaste back in the tube” down the road. • Communication goes a long way – working groups, industry bulletins, regular meetings. • If you’re going to take a stand on a regulatory or enforcement decision, be ready to stand strong (because it’s going to be a bumpy ride….). • Non

6. A year later….lessons learned • Pesticide contamination isn’t going away and the federal government isn’t coming to the rescue: • Denver Department of Environmental Health has broad authority under our local ordinances to “take all measures necessary to promote the health . . . of the city and its inhabitants and visitors.” DRMC §24-16 • The state Department of Agriculture has authority over the use of pesticides (not the contaminated crop) and can only issue a cease and desist order • The state Marijuana Enforcement Division (MED) has authority over the contaminated crop only if there has been a violation of the Pesticide Applicator’s Act

7. Denver’s crash course in pesticidesLast year the fight went to court • By the end of April 2015, we put holds on more than 100,000 plants in 11 different grows • Two days later, we were sued • They argued that the city couldn’t provethe pesticides were unsafe for human consumption • Despite the fact that no pesticide had ever gone through EPA’s human health risk assessment for use on marijuana

8. Denver’s crash course in pesticidesThe lawsuits • Three days, three toxicologists, CDA witnesses • EPA witness testified from Washington DC • The industry packed the courtroom • Judge ruled in favor of Denver – “Preventing the sale of MJ plants containing a substance that may be harmful if ingested by purchasers of the MJ until it can be determined whether the substance is actually safe is absolutely within the scope of the Department of Environmental Health’s authority to protect public health.”

9. Pesticides and MarijuanaThe battle continues • In the fall of 2015, Denver started investigating and issuing recalls of MJ edibles and concentrates that were on store shelves • All of these products tested positive for residues of multiple pesticides

10. Pesticides and MarijuanaDocumented in the media every step of the way • “Largest pot recall yet: Mountain High Suckers pulls nearly 100,000 packages” • “Denver’s 13th marijuana recall in 13 weeks: Advanced Medical Alternatives” • The recall is Advanced Medical Alternatives’ second in eight days — and the 13th recall issued by the city of Denver’s Department of Environmental Health in 13 weeks”

11. Pesticides and MarijuanaConcentrates and edibles - the battle continues • Two MJ product manufacturers filed lawsuits • One settled with the city and destroyed all of the contaminated product. • Challenged our lab results and authority. Again. • Claimed we “can’t prove these pesticides are unsafe.” Again.

12. Pesticides and MarijuanaThe battle continues • On November 13, 2015, the Colorado governor weighed into the fray and issued an executive order to declare tainted pot a threat to the public so that any marijuana grown with off-label use of pesticides would be removed from commerce and destroyed • The state started enforcement action earlier this year …...and stoppedshortly thereafter…… Colorado issues fourth pesticide-pot recall in less than a week By David Migoya and Ricardo BacaThe Denver Post

13. A year later….Denver is saturated • Last July, we had 1014 marijuana business licenses operating out of 439 unique locations. • This July, we have ~1060marijuana business licenses, operating out of 490unique locations. • hjh 386

14. A year later….Denver is saturated MARIJUANA IN DENVER: SOME AREAS SATURATED A Denver Post analysis of marijuana-related business license records shows there are more than 600 entities operating within city limits, including medical and retail stores, cultivation centers, edible manufacturers and testing facilities. Businesses are concentrated in the northern and western areas of the city, mainly due to zoning restrictions and available warehouse space for cultivation operations. The three neighborhoods that house the highest number of businesses are Elyria Swansea (78), Northeast Park Hill (67) and Montbello (52). Unbalanced pot landscape in Denver raises concerns After two years of retail marijuana sales, Denver communities of color and lower income say they bear disproportionate number of pot licensees • ioi DENVER AND THE WEST Marijuana business caps could help neighborhoods, council members say Denver City Council considers proposals to replace moratorium on new players in industry

15. A year later….Denver is saturated • Decisions made in 2013 about zoning and licensing of marijuana business had huge negative consequences for poorer neighborhoods in our city. • In the first four months of 2016, we passed three different marijuana bills to address some of the issues. • Denver now has a CAP on the number of marijuana grow and store locations that can exist in the city. • 467 Total • 311 Grows • 226 Stores • All marijuana grows and MIPS will have to install odor mitigation equipment (carbon filtration systems) • Omnibus bill (50 pages long) closed some of the loopholes that were being exploited by the industry. • …we’re already over the cap….

16. A year later….HEMP has become an issueRemember our 36-plant ordinance? • Massive non-licensed grows had popped up in warehouses all over the city and presented huge public safety concerns. • So, in Denver, you can’t grow more than 36 marijuana plants on any one zone lot in the city. • And, for this ordinance, “marijuana” is defined as “all parts of the plant of the genus cannabis . . . without regard for cannabinoid concentration levels.” • Which includes “industrial hemp”

17. A year later….HEMP has become an issue • The Colorado Department of Agriculture manages the state industrial hemp program • There is no “hemp license” and hemp is not tracked in the METRC system from “seed to sale” • But we’ve found that people just start doing things until they get caught and, recently, DFD and DPD have found several hemp cultivation and extraction operations in city warehouses • More lawsuits?? You can’t grow hemp or extract from hemp in Denver. If we change that, how do we avoid creating yet another loophole for people to game the system…..?

18. A year later….Social Consumption • For the second year in a row, we have citizen-initiated ordinances to create MJ consumption clubs – two of them are set for our ballot in November • Both Amendment 64 and state law do not allow the open and public consumption of marijuana • So what happens if they BOTH pass? • Do we refuse to implement? • Do we implement and wait for the state to sue us?

19. Advertising • Advertising Restrictions. • Unlawful for any person to advertise MMJ or RMJ where the advertisement is visible to members of the public from any public place • Prohibits billboards, signs mounted on vehicles; hand-held or portable signs; handbills, leaflets or fliers handed directly to a person in a public place, left on a motor vehicle, or posted on public or private property without consent of the property owner • EXCEPT: • Sign on same zone lot as the store/center which exists solely for the purpose of identifying the location of the store/center • Ads in magazines, newspapers, or other periodical of general circulation • Ads which are purely incidental to the sponsorship of a charitable event • Non

20. Advertising….What else? • ioi “Marijuana dispensary wants naming rights to Mile High Stadium” Rocky Mountain News - April 2, 2016 9:28 am ET

21. DMMS2016.org

22. Marley Bordovsky Marley.Bordovsky@denvergov.org 720-913-8057 Denvergov.org/MarijuanaInfo