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Marijuana Compliance

Colorado marijuana regulations are complex and can be confusing. Business owners and employers are required to obtain numerous state and local licenses and must abide by strict regulations. Failure to comply with these regulations can be detrimental to your business. Businesses and business owners could be fined, have their business licenses suspended, or even revoked.

Having legal representation is vital when operating a marijuana business. Cliff Black, a marijuana business attorney, can walk you through the formation process and negotiate on your behalf if you’ve been accused of a violation.  

Marijuana Compliance Attorney in Colorado Springs, CO

Are you going into the marijuana business? Has your business recently been accused of violating a regulation? Clifton Black at Law Offices of Clifton Black, PC has over a decade of experience in the marijuana industry. Some of the issues we assist with include:

  • Formation
  • Licensing
  • Regulations
  • Federal Law
  • Buy/Sell Agreements
  • & More!

Call (719) 328-1616 to schedule a time to speak with Cliff Black. Law Offices of Clifton Black, PC assist clients with marijuana compliance issues in areas around El Paso County, Arapahoe County, Denver County, and Pueblo County.

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What Type of License Do I Need to Open a Marijuana Business?

One of the first steps in complying with Colorado’s marijuana laws is to obtain a license from the MED and the locality where your business will be located. The license you obtain depends on the type of business you decide to operate. There are many types of licenses required for legal marijuana businesses and keep in mind; you may be required to obtain various business licenses depending on the county where you plan to open the business.

Some counties only allow medicinal businesses while others allow for both. Be prepared to pay local and state application fees depending on the license. Applying for a retail marijuana store license, for instance, may cost $4,500 for the state application and $2,500 for a local application.

There are 13 marijuana business licenses currently offered by the Marijuana Enforcement Division (MED). These licenses include:

  • Retail marijuana store
  • Retail marijuana cultivation
  • Retail marijuana product manufacture
  • Retail marijuana testing facility
  • Retail marijuana transporter
  • Retail marijuana business operator
  • Medical marijuana center
  • Medical marijuana optional premises cultivation
  • Medical marijuana-infused product manufacture
  • Medical marijuana testing facility
  • Medical marijuana transporter
  • Medical marijuana operator
  • Medical marijuana research and development facility or cultivation

Applying for a marijuana business license is a labor-intensive and time-consuming process. You will have to undergo a background check and provide state and local licensing agencies with in-depth personal information.  You may be tempted to go through the application process on your own. But be aware, one simple mistake can result in your application being denied.

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Penalties for Violating Regulations

The mission of the MED is to promote public safety and reduce public harm by regulating the marijuana industry. The legal text governing the medical and retail marijuana industry is over 500 pages. Failing to comply with these strict regulations can result in hefty fines, license restrictions or license revocation.

The regulations you are required to comply with depend on the license you hold. Regulations can range from who you can legally sell products to, chemicals that can be used in production and required certification. Regulation violations are broken into three categories. These categories include violations affecting public safety, license violations and license infractions.

The extent of the penalties will depend on the severity of the violation, which category they fall into and if any aggravating factors were present. Listed below are examples of violations and their associated penalties.

Violation affecting public safety

These are considered the most severe violations. Examples can include making sales to someone under 21, selling to unregistered patients and providing false information in the inventory tracking system.

Penalties for a violation affecting public safety can include the following:

  • License suspension/revocation
  • A fine per violation
  • A $100,000 fine in lieu of suspension or revocation

License violation

A license violation is not as severe as a violation affecting public safety, but they are still serious. Examples of violations can include failing to maintain minimum security requirements, failing to keep business records and marketing violations.

Penalties for a license violation can include:

  • License suspension/revocation
  • A fine per violation
  • A $50,000 fine in lieu of suspension or revocation

License infractions

License infractions are the least severe, but they can still result in harsh penalties. Infractions can range from small unauthorized changes to the licensed location, failing to display required badges and failing to notify MED of changes in ownership.

Penalties for a license infraction can include:

  • License restrictions
  • License suspension/revocation
  • A fine per violation
  • A $10,000 fine in lieu of suspension or revocation

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Federal Marijuana Laws

Marijuana is fully legal in Colorado, but it may come as an unpleasant surprise to know federal law still treats marijuana as a schedule I controlled substance. This contrast in federal and state law creates a situation where you can be charged with a federal crime for activities that are allowed by the state.

Federal laws affect the marijuana industry in more ways than one. The Controlled Substance Act (CSA) makes it a crime to open, lease, rent, maintain or use property to manufacture, store or distribute a controlled substance. This means landlords with tenants involved in the legal marijuana industry run the risk of federal asset forfeiture and other criminal fines.

Many banks and credit companies are reluctant to provide account and lines of credit for marijuana companies in fear of violating the CSA. Federal laws also prevent marijuana businesses from deducting standard business expenses such as transportation, marketing and training.

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Resources for Marijuana Compliance

Medical Marijuana Rules | Code of Colorado Regulations – Follow the link provided to read the legal text governing the medical marijuana industry. You can find a full list of regulations and how they are penalized. You can also find information on inventory tracking systems and the required security equipment.

Retail Marijuana Rules | Code of Colorado Regulations – View a PDF from the Code of Colorado Regulations to learn more about the regulations for the retail marijuana sector. You can view a list of regulations per license, what each license allows a licensee to do and learn about the application process.

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Marijuana Compliance Lawyer in Colorado Springs, CO

Ensuring you comply with state and local laws is imperative if you are in the marijuana industry. Navigating these laws can be complicated, especially since they are always changing. Clifton Black at Law Offices of Clifton Black, PC has proven experience assisting clients in the marijuana industry. Whether you need guidance transferring ownership or arguing an alleged violation, Law Offices of Clifton Black, PC is here to help.

Call (719) 328-1616 to schedule a time to speak with us. Law Offices of Clifton Black, PC assist clients in areas such as Colorado Springs, Denver, and Littleton.

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Law Offices of Clifton Black, PC