Cannabis patients, consumers and business leaders are standing together after Colorado Gov. John Hickenlooper vetoed a bill addressing a medical marijuana condition.
The measure would have added autism to the list of conditions that qualify for medical marijuana; it was overwhelmingly approved by state lawmakers. Given the widespread support in the legislature, proponents are exploring the possibility of a special session to overturn Hickenlooper’s misstep.
One idea that is being explored would be to run the bill again in a special session if proponents succeed in compelling the governor to issue the call for a special session. That, however, would be an uphill battle. Advocates also are researching the possibility of the legislature exercising a constitutional right to call itself back. After the legislature has adjourned there is no opportunity for a legislative override, but there may be a way to address a re-introduced bill. If the issue is not addressed again this year, proponents plan on bringing the bill back next legislative session.
“The governor stated that the concerns of the medical communities were just too great, yet he suggested that patients seek out marijuana illegally for their children by circumventing the system and applying under a different condition such as pain,” said Stacey Linn, executive director of the CannAbility Foundation, which represents children and their families who treat their medically-fragile children with cannabis.
“By stating that he doesn’t think that medical marijuana is appropriate for ‘mildly autistic’ children, John Hickenlooper is both inserting himself as a doctor, and assuming that parents, together with their child’s doctor, cannot be trusted to discern what the appropriate treatment is for their child. Make no mistake, this a matter of our right to freedom of choice in making medical decisions,” Linn continued.
The coalition of cannabis consumers, businesses and patients also raised concerns over two other marijuana-related vetoes from the Democratic governor, which directly impact consumers and the regulatory certainty of the industry.
House Bill 1258 would have created so-called cannabis “tasting rooms,” creating a regulated space for limited public consumption. House Bill 1011 would have provided a conservative avenue for the careful and controlled participation of fully-reporting publicly traded companies in Colorado’s cannabis industry.
Autism Veto an Affront to Patients and Families
It is the autism issue, however, that has surfaced as the most perplexing veto. House Bill 1263passed the House and Senate 53-11 and 32-3, respectively. Hickenlooper stated as a reason for his veto: “If we sign that bill we end up, without question, in some way encouraging more young people to look at this as an antidote for their problems.”
A robust stakeholder process was held for HB 1263, which resulted in a significant compromise. The bill gave the Colorado Department of Public Health and Environment final say on whether or not to grant care, and parents would have been required to approve cannabis treatment. Multiple doctor recommendations also would have been necessary to allow for the treatment.
Hickenlooper ignored a legislative process that revolved around negotiating in good faith with the executive branch at the departmental level. Hickenlooper raised last-minute concerns over the autism bill, making it impossible to fully address his questions. The governor’s actions potentially create a perilous dynamic for the cannabis industry, and future officials should take note.
Hickenlooper’s miscalculation came to the detriment of hundreds of families dealing with autism. Some of those families gathered at the Capitol on Tuesday to ask the governor to do the right thing. He rejected their pleas. Those advocates gathered again on Thursday at the Capitol for a news conference.
Colorado would have joined a growing list of states adding autism as a qualifying condition for medical marijuana. Evidence out of those states suggests that cannabis can treat autism effectively.
Hickenlooper’s political and policy misstep on cannabis policy should serve as a teachable moment for future officials, especially the next governor of Colorado. Standing on the wrong side of history in terms of cannabis policy has repercussions, including political backlash, especially as the popularity of legal marijuana grows nationally.
House Bill 1258 would have created cannabis tasting rooms. The bill came following a four-year stakeholder process that earned a “neutral” stance from the Marijuana Enforcement Division for the first time on a cannabis public consumption bill. The Division called the bill an “incremental approach.”
The measure would have empowered communities to take consumption off of streets and out of parks; banned smoking; limited sales; required consumption and product safety information; education around driving; curbed a proliferation of clubs; and closed regulatory loopholes that empower unregulated clubs to operate. Local regulators spoke of a need for the bill. Those pleas were again ignored by Hickenlooper.
“The governor’s veto of the tasting rooms bill was offensive, but sadly, it was not surprising,” said Mason Tvert, a partner at cannabis consulting firm VS Strategies and co-director of the 2012 Amendment 64 campaign to legalize adult-use marijuana.
“Since Day 1, John Hickenlooper, who made a small fortune selling alcohol in social venues, has treated adult cannabis consumers like second-class citizens. Perhaps someday he will explain to the public why he is so prejudiced against cannabis, despite it being objectively less harmful than alcohol.”
Publicly Traded Companies
House Bill 1011 would have struck a balance between public safety and the need of the industry to access capital like any other legal business in Colorado. The legislation provided the State Licensing Authority and the Marijuana Enforcement Division with the authority and discretion to deny participation in Colorado’s cannabis industry to any unsuitable entity.
The legislation also required those investing in the cannabis industry to provide pertinent financial information, not only at the time of application but also on an on-going basis. The bill mandated that public companies participating in the state’s cannabis industry share all of their SEC and other exchange filings with the MED and to meet robust initial disclosure requirements when investing, regardless of the percentage of investment. HB 1011 provided the SLA with broad rule-making authority to require additional disclosures deemed necessary to ensure that the public safety component is met.
Currently, all but two other states that have legalized cannabis allow for this, making Colorado one of the lone states that prohibit legal businesses from accessing reliable, vetted capital. This places Colorado at a huge competitive disadvantage and it has hampered material capital investment into Colorado companies. The bill would have created the most strictly regulated cannabis market that allows for publicly traded company participation in the nation and it would have provided a roadmap for other states in keeping with Colorado’s role as a leader in the industry.
“Legal cannabis businesses of all sizes lack access to traditional forms of capital, and we saw HB 1011 as a critical solution,” said Kristi Kelly, executive director of the Marijuana Industry Group. “When partnered with 280E, which prohibits legal cannabis businesses from taking standard tax deductions, and high regulatory operating costs, compliant businesses are starved for capital.
“This bill is the result of 16 months of collaboration with stakeholders, including discussions with the Attorney General’s Office, the Department of Revenue and the MED. The issues raised in the HB-1011 veto letter were as perplexing as those raised in his veto of the autism bill, and ones that stakeholders could have easily addressed. This will have significant consequences on jobs, investment, revenue and taxes, and we are deeply disappointed,” Kelly continued.
“Colorado was uniquely positioned to lead the United States cannabis industry. We have a mature market, the best operators, and world class operations. If HB 1011 was not vetoed, investment would have eagerly poured into Colorado to establish the nation’s headquarters of operations, leading the roll-up of the cannabis industry from around the United States,” added Andy Williams, chief executive of Denver-based grower and dispensary Medicine Man.
“This is similar to having the headquarters of Coors and Budweiser in our state,” Williams continued. “The jobs and revenue would have been a tremendous boost to our economy. As it is now, Gov. Hickenlooper has opened the door to other states to take that lead from us. I will most assuredly be looking to move my headquarters to a state that welcomes our industry.”