Medical marijuana bill threatens "Mom and Pop" dispensaries, says advocate Matt Brown

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Matt Brown thinks the new medical marijuana bill has improved -- but it still has a ways to go.
When medical marijuana advocate Matt Brown spoke to Westword yesterday about Representative Tom Massey's new bill to regulate the industry, he hadn't seen the final document -- just a draft from late last week. And after perusing the latest product, he was presently surprised.

"It's a lot better than I was expecting," he says. "It changed a lot in the last couple of days. There were a lot of little changes that softened some of the sharp edges."

That doesn't mean, however, that he thinks the document is perfect. He sees a number of significant issues, including the prospect that small, neighborhood dispensaries could essentially be legislated out of business.

Although Brown doesn't have an enormous philosophical problem with shifting the industry toward a nonprofit approach, he feels the bill's language is at times confusing and contradictory.

"The way it's written in the bill as it was introduced, it really does exactly what we have in California" -- a state whose approach to regulation has been widely criticized, especially as manifested in Los Angeles. "It's made to sound like we've fixed the problem: 'It's a good thing now, because it's a nonprofit.' But it doesn't limit any sort of pay and could potentially screw up all kinds of tax and income benefits for the state. A nonprofit can't be a retail business, but what's outlined is the retail pharmacy end of the medical marijuana supply chain -- the Walgreens entity. So I think the nonprofit sections need a lot more talk."

He's also dubious about a provision that would limit advertising to line ads -- as he interprets it, "anything with a picture, logo, tag-line or price would be disallowed.

"The problem is, it only affects dispensaries. If I open a dispensary, there's nothing saying I can't also open a medical marijuana information line that is separate legally from my dispensary. I could then advertise that in any way, shape or form that I'd like, and just like with online poker sites that were prohibited from advertising, the whole process will be circumvented. And that kind of restriction doesn't seem to be in a patient's best interest anyway. It doesn't seem worthwhile to limit a patient's ability to find out what kind of services are available for them."

Of course, plenty of publications would potentially be hurt if such a limitation was put in place -- this one, obviously, but also the Denver Post, which began accepting medical marijuana ads months ago. Makes sense why: This industry is among the very few that has been advertising more, not less, in spite of the currently moribund economy. As such, Brown expects pubs to lobby for a change in this section of the bill.

"Publishers have every reason to look for new revenue streams -- to engage an industry like ours and say, 'This is new. This has never been done before. Let's work together to see how we can self-regulate this issue and make sure it's not overly tacky, with editorial standards.' To that end, I don't think it's in anyone's interest to limit those sorts of ads."

Another concern is a provision that appears to give communities permission to ban dispensaries. At least that's the interpretation of Sensible Colorado's Brian Vicente, who spoke to Westword about the measure earlier today. But Brown's less clear about what it portends.

"One of my plans for today is to talk to more lawyers to figure out exactly what the wording means," he notes. "Does it say towns have the ability to limit dispensaries? If that's the case, it might be closer to the way it is in Oakland, where they only allow about four dispensaries, with 30,000 patients apiece or something like that -- a severe limitation. But if the limit can mean limit to zero, that would seem to be a prohibition to me."

This last situation "would be a very serious issue we'd need to address in the bill," he continues. "We understand they need a broad power to exercise all the typical local rights. But if they end up with the power to blanket-ban things, like Aurora has done to date, it opens the door to a lot of messy litigation instead of letting us move forward."

Even so, Brown feels that "the biggest structural problem with the bill" involves what he refers to as "vertical integration" -- the idea that centers will have to grow 90 percent of their own product rather than relying on suppliers for the lion's share of their needs.

"This goes directly to the issue of mom and pop dispensaries that don't have the money to build out the infrastructure to grow thirty or forty strains and also produce the full range of oils and tinctures and edibles that their competitors might offer. If that kind of vertical integration is put in place, it would force out the small, sweat-equity dispensaries as it lets dispensaries with large angel investors behind the scenes stay competitive.

"You see the smaller dispensaries in a number of mountain communities. They're usually started by a couple of forty-somethings who know the town and the community and got started on a shoestring budget and worked their way in. They would be threatened by this kind of vertical integration. They'd be very much in jeopardy."

Not that Brown sees these difficulties as insolvable. Far from it. He's not sure if the number of patients per unregulated caregiver should be limited to five, but he likes the idea of separating small-scale operators from much larger operations that will have to comply with a plenitude of rules and regs. And even those aspects of the legislation that give him pause "are, at a minimum, open for discussion. This isn't an open-and-shut situation by any means.

"This is the starting point we've been working toward for three months," he maintains. "Now, I know, for those of us who haven't been exposed to politics before, it seems like a long, hard slog just to get to the starting point. But this bill should be able to help us regulate and license dispensaries, and that's a big step to clarity in the supply chain of medical marijuana."

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