Medical marijuana license rules will push many pot sellers back underground, attorney says

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Danyel Joffe.
Sunday is the deadline for medical marijuana businesses to submit their business application to the state -- and while Senator Chris Romer likes what the new MMJ laws signed by Governor Bill Ritter have done thus far, attorney Danyel Joffe -- who spoke to us about a previous July 1 MMJ filing deadline -- sees many of the application requirements as so onerous that they'll likely push entrepreneurs out of the legal end of the business and back underground.

"A lot of people won't have storefronts with signs on them anymore," Joffe says. "It'll be like the bad old days before prohibition against medical marijuana, where people will grow it out in agricultural areas and you won't know the quality of the stuff you're smoking, won't know if it's been infested with fertilizers or insecticide. A lot of the safety protocols that will be in place through regulation will go back to the streets, and I think that's really unfortunate. It does Colorado medical marijuana patients a real disservice."

Numerous sections of the Colorado Business Medical Marijuana License Application form trouble Joffe, with the most problematic of them from her perspective involving a language the Cannabis Therapy Institute synopsizes like so: "The applications require the applicant to surrender all rights to confidentiality and privacy and to hold the state harmless if the state should accidentally misuse the information."

Many members of the MMJ community believe these requirements are unprecedented, but Joffe doesn't go that far. "I've reviewed the application process and forms for opening a casino, and those applications are about as onerous," she says. "Although, personally, I don't think they need to be as onerous for medical marijuana as they are for casinos. We're not talking about dealing cocaine here."

Equally worrisome for Joffe is the passage about Colorado providing any and all personal information to the federal government.

"There was a recent case in Mendocino County, California, where they created their own local licensing authority based on the California law -- and apparently, the first people who applied for licenses got busted by the DEA right away," Joffe says. (To read more about the story, click here.) "And I've heard from concerned clients that they're afraid by signing off on the release of all this information that they're effectively convicting themselves.

"Giving the government the permission to disclose the information to others is quite concerning," she continues. "Will they have the right or the ability to turn it over to the DEA if the DEA asks? And if they have the right and the ability, will they actually act on it?"

The clause forgiving the state if it accidentally releases personal information is also a red flag for Joffe. "You're giving up any claim you might have against the state for any damages you might suffer," she says. "If they release your charge account information and checking information and someone steals your identity, you have no recourse against the state. And I think the state should be held accountable if it wants information to keep that information safe."

Given these dangers, what advice is Joffe giving her clients?

"I always try to note that compliance with the Colorado law may well not include compliance with the federal law," she says. "Because under the federal law, marijuana is still illegal for all purposes. It's Schedule I, meaning the federal government doesn't recognize that marijuana has any medical use. And we have no idea how the DEA is going to act."

Nonetheless, "a lot of my clients have decided they're going forward anyway -- and for all I know, because this is a heavily regulated industry in the state, maybe the DEA will back off. And if 500 to 1,000 medical marijuana centers are registered by Sunday, how can the DEA go and hammer everybody?"

Then again, she concedes, "they might decide to make an example of someone. They've already done that with a grower who appeared on 9News" -- a reference to Chris Bartkowicz, indicted in May on charges that could result in decades behind bars.

In light of the Bartkowicz example, it's no surprise that other Joffe clients have decided to pass on the state-mandated application process. But that doesn't necessarily mean they're abandoning the marijuana trade. "Instead of shutting down, they're going to go back underground -- meaning they won't be paying any of the sales taxes anymore," Joffe reveals.

And where will that money go? "Back to the cartels, to the gangs," Joffe maintains.

With that in mind, Joffe says, "I'm glad there are people who are willing to take the risks" associated with participating in license application. "I'm glad for the patients' sake."

But she also understands why some people are choosing a different path.

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