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Medical-marijuana price hikes from too many regulations worry Denver councilman

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Councilman Chris Nevitt doesn't want to give dispensaries an excuse to start buying from bad guys.
While some officials seem to see the ongoing medical-marijuana boom as a threat to all that's good and strong and true about our fair state, Denver city councilman Chris Nevitt is focusing on the practical questions that arise from the issue.

Earlier this month, Nevitt talked about regulating dispensary food products that contain marijuana, among other things. But he wants to make sure rules placed on medical-marijuana purveyors aren't so onerous that they cause precipitous price increases -- a development that might cause entrepreneurs to give their business to drug dealers rather than more legitimate sources.

"For everybody who wants to participate in the medical-marijuana industry, we don't want them to be tempted to go the illegal route," he says.

This concern arises amid a conversation about councilman Charlie Brown's presentation of proposed medical-marijuana regulations to the council's safety committee on Wednesday. Nevitt had earlier felt that he and Brown were far apart in their approach to this issue -- but he was impressed by what CB brought to the table.

"I really appreciated the seriousness with which he's approaching this," Nevitt says. "I think maybe he started out in a kind of knee-jerk way: 'People are upset and we need to do something about this.' But he's clearly really engaged. He's been talking not just to residents, but also to the medical-marijuana industry -- and a lot of elements that he's proposed make a lot of sense to me.

"The critical feature is taxation, which we've already got figured out," Nevitt goes on, joking that "we were into it before it was cool -- but the state is catching up, which I'm glad to see. We'll be taxing it. And I think our food safety regimen is absolutely critical to create."

Not that he and Brown and intellectually in concert on every facet of the subject.

"The places I disagree with Charlie have principally to do with what I think are additional and currently unwarranted burdens on the medical-marijuana industry," Nevitt notes. "All his requirements for security cameras and the filing of a business plan, the hiring of security guards, and the location restrictions -- medical-marijuana businesses can only be located a certain distance from schools, churches and each other.

"I'm a strong believer in efficient government, and I don't believe we should be spending taxpayer money to apply the force of government unless we know what problem we're solving, and that we're solving it as efficiently as possible. It could be that we need to establish location restrictions, for example, but that's far from having been demonstrated. And I don't think we should be throwing regulations in the way of a new industry until we know that those regulations are necessary."

There could be plenty of unintended consequences if regulatory measures prove too costly, he believes.

"My training is in political economy, and I think about getting the prices right," he allows. "And if we make medical marijuana so expensive by throwing a whole lot of pointless regulations in front of it, we're going to drive up the price. We're going to reduce the supply and we're going to increase the cost of doing business.

"If you think about that from a straight-forward entrepreneurial perspective, when the price of medical marijuana starts to get too high, it could match the price in the illegal market. Then people will be indifferent to doing things the legal way. They'll think, 'Why bother with the legal market? It costs me the same to go illegal, and it's a lot easier.' And that would be perverse."

In Nevitt's view, its important to create a "transparent, guarded pathway that assures both the public and the medical-marijuana user that the medical-marijuana industry is separate from the illegal marijuana industry." As such, he's pleased that state senator Chris Romer, who attended the Wednesday hearing, is working to craft legislation to establish clearer guidelines than presently exist; Romer recently shared some of his ideas on the topic in this space.

"We're counting on Chris Romer to lead this effort," Nevitt says. "From the city side, we can establish a licensing regime and an inspection regime, and we can certainly fold them into our food-safety regime very quickly. But the state needs to regulate the growers and be able to establish that the marijuana grown by these growers is destined for legal dispensaries. You can't say, 'Oh yeah, you can grow marijuana for dispensaries,' and then let those growers also distribute marijuana into the illegal marijuana market. We need to regulate the dispensaries to make sure the source of their marijuana is legal, and that the barrier between the legal and the illegal markets isn't breached."

Nevitt expects that such issues will next be batted around in a safety committee meeting scheduled for Wednesday, December 2, and he's optimistic that the various council members can make progress. "I'm a big believer in taking on all the things we agree on before we arm wrestle about where we disagree," he says.

Now if only they can strike a balance between too much regulation and not enough.

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