2016 Colorado Revised Statutes
Title 12 - Professions and Occupations
Health Care
Article 43.3 - Medical Marijuana
Part 2 - State Licensing Authority
§ 12-43.3-202. Powers and duties of state licensing authority - rules

(1) The state licensing authority shall:

(a) Grant or refuse state licenses for the cultivation, manufacture, distribution, and sale of medical marijuana as provided by law; suspend, fine, restrict, or revoke such licenses upon a violation of this article, or a rule promulgated pursuant to this article; and impose any penalty authorized by this article or any rule promulgated pursuant to this article. The state licensing authority may take any action with respect to a registration pursuant to this article as it may with respect to a license pursuant to this article, in accordance with the procedures established pursuant to this article.

(b) (I) Promulgate such rules and such special rulings and findings as necessary for the proper regulation and control of the cultivation, manufacture, distribution, and sale of medical marijuana and for the enforcement of this article. A county, municipality, or city and county that has adopted a temporary moratorium regarding the subject matter of this article shall be specifically authorized to extend the moratorium until June 30, 2012.

(II) Repealed.

(c) Hear and determine at a public hearing any contested state license denial and any complaints against a licensee and administer oaths and issue subpoenas to require the presence of persons and the production of papers, books, and records necessary to the determination of any hearing so held, all in accordance with article 4 of title 24, C.R.S. The state licensing authority may, at its discretion, delegate to the department of revenue hearing officers the authority to conduct licensing, disciplinary, and rule-making hearings under section 24-4-105, C.R.S. When conducting such hearings, the hearing officers shall be employees of the state licensing authority under the direction and supervision of the executive director and the state licensing authority.

(d) Maintain the confidentiality of reports or other information obtained from a medical or retail licensee containing any individualized data, information, or records related to the licensee or its operation, including sales information, financial records, tax returns, credit reports, cultivation information, testing results, and security information and plans, or revealing any patient information, or any other records that are exempt from public inspection pursuant to state law. Such reports or other information may be used only for a purpose authorized by this article, article 43.4 of this title, or for any other state or local law enforcement purpose. Any information released related to patients may be used only for a purpose authorized by this article, article 43.4 of this title, or to verify that a person who presented a registry identification card to a state or local law enforcement official is lawfully in possession of such card.

(e) Develop such forms, licenses, identification cards, and applications as are necessary or convenient in the discretion of the state licensing authority for the administration of this article or any of the rules promulgated under this article;

(f) Prepare and transmit annually, in the form and manner prescribed by the heads of the principal departments pursuant to section 24-1-136, C.R.S., a report accounting to the governor for the efficient discharge of all responsibilities assigned by law or directive to the state licensing authority;

(g) In recognition of the potential medicinal value of medical marijuana, make a request by January 1, 2012, to the federal drug enforcement administration to consider rescheduling, for pharmaceutical purposes, medical marijuana from a schedule I controlled substance to a schedule II controlled substance; and

(h) Develop and maintain a seed-to-sale tracking system that tracks medical marijuana from either the seed or immature plant stage until the medical marijuana or medical marijuana-infused product is sold to a customer at a medical marijuana center to ensure that no medical marijuana grown or processed by a medical marijuana establishment is sold or otherwise transferred except by a medical marijuana center.

(2) (a) Rules promulgated pursuant to paragraph (b) of subsection (1) of this section may include, but need not be limited to, the following subjects:

(I) Compliance with, enforcement of, or violation of any provision of this article, section 18-18-406.3 (7), C.R.S., or any rule issued pursuant to this article, including procedures and grounds for denying, suspending, fining, restricting, or revoking a state license issued pursuant to this article;

(II) Specifications of duties of officers and employees of the state licensing authority;

(III) Instructions for local licensing authorities and law enforcement officers;

(IV) Requirements for inspections, investigations, searches, seizures, forfeitures, and such additional activities as may become necessary from time to time;

(V) Creation of a range of penalties for use by the state licensing authority;

(VI) Prohibition of misrepresentation and unfair practices;

(VII) Control of informational and product displays on licensed premises;

(VIII) Development of individual identification cards for owners, officers, managers, contractors, employees, and other support staff of entities licensed pursuant to this article, including a fingerprint-based criminal history record check as may be required by the state licensing authority prior to issuing a card;

(IX) Identification of state licensees and their owners, officers, managers, and employees;

(X) Security requirements for any premises licensed pursuant to this article, including, at a minimum, lighting, physical security, video, alarm requirements, and other minimum procedures for internal control as deemed necessary by the state licensing authority to properly administer and enforce the provisions of this article, including reporting requirements for changes, alterations, or modifications to the premises;

(XI) Regulation of the storage of, warehouses for, and transportation of medical marijuana;

(XII) Sanitary requirements for medical marijuana centers, including but not limited to sanitary requirements for the preparation of medical marijuana-infused products;

(XIII) The specification of acceptable forms of picture identification that a medical marijuana center may accept when verifying a sale;

(XIV) Labeling standards;

(XIV.5) Prohibiting the sale of medical marijuana and medical marijuana-infused products unless the product is:

(A) Packaged in packaging meeting requirements established by the state licensing authority similar to the federal "Poison Prevention Packaging Act of 1970", 15 U.S.C. sec. 1471 et seq.; or

(B) Placed in an opaque and resealable exit package or container at the point of sale prior to exiting the store, and the container or package meets the requirements established by the state licensing authority.

(XV) Records to be kept by licensees and the required availability of the records;

(XVI) State licensing procedures, including procedures for renewals, reinstatements, initial licenses, and the payment of licensing fees;

(XVII) The reporting and transmittal of monthly sales tax payments by medical marijuana centers;

(XVIII) Authorization for the department of revenue to have access to licensing information to ensure sales and income tax payment and the effective administration of this article;

(XVIII.5) Rules effective on or before January 1, 2016, relating to permitted economic interests including a process for a criminal history record check; a requirement that a permitted economic interest applicant submit to and pass a criminal history record check; a divestiture; and other agreements that would qualify as permitted economic interests;

(XVIII.6) Medical marijuana transporter licensed businesses, including requirements for drivers, including obtaining and maintaining a valid Colorado driver's license; insurance requirements; acceptable time frames for transport, storage, and delivery; requirements for transport vehicles; and requirements for licensed premises;

(XIX) Authorization for the department of revenue to issue administrative citations and procedures for issuing, appealing, and creating a citation violation list and schedule of penalties;

(XX) Such other matters as are necessary for the fair, impartial, stringent, and comprehensive administration of this article; and

(XXI) The parameters and qualifications of an indirect beneficial interest owner and a qualified limited passive investor.

(b) Nothing in this article shall be construed as delegating to the state licensing authority the power to fix prices for medical marijuana.

(c) Nothing in this article shall be construed to limit a law enforcement agency's ability to investigate unlawful activity in relation to a medical marijuana center, optional premises cultivation operation, or medical marijuana-infused products manufacturer. A law enforcement agency shall have the authority to run a Colorado crime information center criminal history record check of a primary caregiver, licensee, or employee of a licensee during an investigation of unlawful activity related to medical marijuana.

(2.5) (a) Rules promulgated pursuant to paragraph (b) of subsection (1) of this section must include, but need not be limited to, the following subjects:

(I) (A) Establishing a medical marijuana and medical marijuana-infused products independent testing and certification program for medical marijuana licensees, within an implementation time frame, and requiring licensees to test medical marijuana to ensure, at a minimum, that products sold for human consumption do not contain contaminants that are injurious to health and to ensure correct labeling.

(B) Testing may include analysis for microbial and residual solvents and chemical and biological contaminants deemed to be public health hazards by the Colorado department of public health and environment based on medical reports and published scientific literature.

(C) In the event that test results indicate the presence of quantities of any substance determined to be injurious to health, the licensee shall immediately quarantine the products and notify the state licensing authority. The licensee shall document and properly destroy the adulterated product.

(D) Testing shall also verify THC potency representations and homogeneity for correct labeling and provide a cannabinoid profile for the marijuana product.

(E) The state licensing authority shall determine an acceptable variance for potency representations and procedures to address potency misrepresentations.

(F) The state licensing authority shall determine the protocols and frequency of marijuana testing by licensees.

(II) Signage, marketing, and advertising, including but not limited to a prohibition on mass-market campaigns that have a high likelihood of reaching persons under eighteen years of age and other such rules that may include:

(A) Allowing packaging and accessory branding;

(B) A prohibition on health or physical benefit claims in advertising, merchandising, and packaging;

(C) A prohibition on unsolicited pop-up advertising on the internet;

(D) A prohibition on banner ads on mass-market websites;

(E) A prohibition on opt-in marketing that does not permit an easy and permanent opt-out feature; and

(F) A prohibition on marketing directed toward location-based devices, including but not limited to cellular phones, unless the marketing is a mobile device application installed on the device by the owner of the device who is eighteen years of age or older and includes a permanent and easy opt-out feature.

(III) (A) A prohibition on the production and sale of edible medical marijuana-infused products that are in the distinct shape of a human, animal, or fruit. Geometric shapes and products that are simply fruit flavored are not considered fruit. Products in the shape of a marijuana leaf are permissible. Nothing in this subparagraph (III) applies to a company logo.

(B) The rules promulgated pursuant to this subparagraph (III) shall take effect on October 1, 2017.

(b) The executive director of the department of public health and environment shall provide to the state licensing authority standards for licensing laboratories pursuant to the requirements as outlined in sub-subparagraph (A) of subparagraph (I) of paragraph (a) of this subsection (2.5) for medical marijuana and medical marijuana-infused products.

(c) Mandatory medical marijuana testing shall not begin until a marijuana laboratory testing reference library is created and licensees are set up for proficiency tests and standards.

(3) Repealed.