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HomeMy WebLinkAboutagenda.council.worksession.20130916 CITY COUNCIL WORK SESSION September 16, 2013 5:00 PM, City Council Chambers MEETING AGENDA I. Aspen Skiing Company Fall Update II. Recreational Marijuana Regulations III. SPECIAL MEETING - Request for Executive Session - C.R.S. 24-6-402(4)(a) - Property Acquisition 9.16.13 Work Session: Recreational Marijuana Page 1 of 9 MEMORANDUM TO: Mayor Skadron and City Council FROM: Debbie Quinn, Assistant City Attorney Chris Bendon, Community Development Director RE: Work Session: Recreational Marijuana DATE: September 16, 2013 SUMMARY: This memorandum outlines several decision points the City of Aspen needs to consider regarding Recreational Marijuana. During the meeting, staff will provide a general overview of the new State law, summarize how other communities are proceeding, review the options for each topic, and discuss the staff recommendations. Staff will also provide a summary of public input on the topic. Staff is seeking Council direction. Based on the feedback at tonight’s work session, staff will prepare Ordinances for City Council consideration. OVERVIEW OF STATE LAW: There have been two constitutional amendments adopted in the State of Colorado concerning marijuana, putting Colorado in a unique position to lead the nation in the evolution of legalized marijuana. Whether or not anyone agrees with legalization, the people of this state have mandated it through the state constitution, and it is now up to the state and those local jurisdictions that have not chosen to prohibit legal marijuana to regulate its growth, production, distribution and sale. Because the constitutional amendments, the state laws and state regulations are voluminous, a summary of them is attached as Exhibit A. Also included on Exhibit A is a summary of federal guidance on enforcement of its Controlled Substance Act. PERMITTING RECREATIONAL MARIJUANA SALES: Background. The constitutional amendments and state laws and regulations referenced above allow municipalities to decide whether recreational marijuana sales should be permitted within the municipality. The City took a “hands-off” approach to Medical Marijuana, deciding to treat the use as a Pharmacy. The City does not regulate the types of products that can be sold in a pharmacy, how those products can be used, and does not attempt to interpret or apply State or Federal regulations of the pharmaceutical industry. The City of Aspen did not require any special licensing of medical marijuana facilities other than a business license, which is required by the Municipal Code for any business. As of the date of this memo, there are three medical marijuana operations with business licenses within City limits. All are located within the Commercial Core zone district and each more than 1000 feet from a school. All have been in existence and paying sales tax since August or September of 2009. P1 II. 9.16.13 Work Session: Recreational Marijuana Page 2 of 9 Amendment 64 allowing Recreational Marijuana passed statewide with a vote of 55% in favor; in Pitkin County, the vote was 75.44% in favor. For those precincts (2 and 4) of the County that are almost entirely in the City, the vote was slightly higher at 75.81% in favor (there was no city- specific vote count). Question. Should the City of Aspen allow the sale of recreational marijuana within city limits? Options. The City has the option to allow or prohibit the sale of recreational marijuana in the City. A prohibition could be permanent or time-bound. The total number of retail marijuana stores can also be limited (see next item). The City can allow or prohibit the sale of medical marijuana as well. Recommendation. Staff recommends the sale of Recreational Marijuana be allowed and classified as a retail use, allowed in zones permitting retail operations. This aligns with how the City regulates liquor sales. LIMITING THE NUMBER OF RETAIL OPERATIONS: Background. The City can regulate the total number of retail establishments selling Recreational Marijuana. This could be useful if there are concerns about a substantial influx of new establishments or a desire to limit the retail operations to those which have previously sold medical marijuana. Current Medical Marijuana stores will have the right to “convert” to retail sales prior to new establishments opening. The State will begin accepting applications from existing medical marijuana licensees on October 1, 2013, and will not accept any other applications for retail marijuana licenses until July 14, 2014. There are three medical marijuana stores currently, although more could open prior to October 1st. Existing medical marijuana facilities that apply for a retail marijuana facility license will have to surrender the medical license unless the local jurisdiction allows dual location of medical and retail facilities. Where dual location is permitted, state regulations require that there be virtual separation of the two operations, and if the medical facility continues to sell to those under 21 years of age, there must be a physical separation as well. Question. Should the City limit the number of retail Recreational Marijuana establishments? Options. The City could limit the total number of retail establishments selling Recreational Marijuana. This limit could mimic the number of Medical Marijuana stores or could be based on other factors. A limit on the number of stores can be time-bound. Recommendation. Staff recommends the City initially cap the number of retail establishments at the number of Medical Marijuana stores established in the City on October 1, 2013. This will allow existing establishments to convert and allow the City (and community) to continue to work with established operations. Staff recommends this initial cap be in place for one to two years, then reconsidered. P2 II. 9.16.13 Work Session: Recreational Marijuana Page 3 of 9 Question. Should the City allow dual location of medical and retail marijuana establishments? Options. The City could prohibit dual location, could allow dual location only if the medical facility limits sales to those 21 or over, or could allow with physical separation if the medical facility wishes to continue to sell to patients under 21. For sales, the state Retail Marijuana Regulations, rule 304, requires “two distinctly separate Licensed premises; including, but not limited to, separate sales and storage areas, separate entrances and exits, separate inventories, separate point-of-sale operations, and separate record-keeping. Recommendation. Staff recommends the City initially allow dual location for all facilities, provided that any licensed Medical Marijuana Center prohibit patients under the age of 21 years from being on the Licensed Premises. LICENSING: Background. The City can license both medical and retail marijuana operations. State laws and regulations contemplate a dual (state and local) licensing of both and prohibit operation of both retail and medical marijuana facilities without local approval. There are seven different licenses authorized: • Medical marijuana center; • Medical marijuana-infused products manufacturer • Medical marijuana optional premises cultivation operation • Retail marijuana store • Retail marijuana cultivation facility • Retail marijuana product manufacturing facility • Retail marijuana testing facility Although a local “approval” for Recreational Marijuana need not be a “license,” the State is requiring a local license for Medical Marijuana. The local retail facilities licensing regulations can include time, manner, place and number restrictions; medical marijuana facilities licensing can include distance restrictions, size of premise restrictions, and any other requirements to ensure control of premises and ease of enforcement. The licensing contemplated by state law and the constitution for both medical and retail marijuana must be pursuant to an ordinance containing specific standards for license issuance. For retail marijuana, the State will begin accepting applications from existing medical marijuana licensees on October 1, 2013 and sending copies of those applications for our approval if we have not prohibited retail facilities. Absent a designation of the approval entity, council is the approval entity. Question. Should the City adopt a local license procedure for retail and medical marijuana facilities? Options. An approval process that does not involve licensing is possible for retail marijuana facilities, but for medical facilities the approval must be from a “local licensing authority.” Without licensing and/or local approval, these facilities cannot legally operate in the City. The P3 II. 9.16.13 Work Session: Recreational Marijuana Page 4 of 9 City can determine which of the seven marijuana businesses it wishes to license, and could choose to prohibit some or all marijuana facilities going forward. Recommendation. Staff recommends the City enact a licensing ordinance for all types of marijuana facilities that the City intends to allow. Staff recommends specific standards be adopted by ordinance. These standards can be developed by staff and brought to Council but would generally follow the requirements for a liquor license. Question. Should the City of Aspen Liquor Licensing Authority be designated as the Local Licensing Authority for marijuana facilities? Options. Before October 1, 2013, the City needs to designate the entity responsible for approval of licenses if the state doesn’t meet its constitutionally mandated deadlines. The Liquor Licensing Authority, working with the Clerk’s office, is already familiar with a dual licensing process for liquor licenses. Because the state’s dual licensing for marijuana facilities uses the liquor licensing model, our existing Authority would be familiar with the process. Alternatively, the City Council, the Clerk, the Manager, or some other entity or person as Council deems appropriate could be designated. Recommendation: Staff recommends that the resolution discussed above and the subsequent licensing ordinance designate the Liquor Licensing Authority as the Local Licensing Authority. Staff also recommends that council direct staff to prepare a resolution for consideration on September 23, 2013, to advise the State of the entity responsible for licensing should the State fail to meet its deadlines, as required by Amendment 64. This resolution should also include a provision that should any application for any marijuana facility be submitted to the City by the State or by an applicant prior to the effective date of a City Ordinance establishing its licensing procedures and time, place, manner and number restrictions, those applications will not be deemed complete and accurate until such time as the licensing ordinance is in effect. A draft of such a resolution is attached as Exhibit B. UNLAWFUL ACTS & PUBLIC CONSUMPTION: Background. Amendment 64 legalizes the personal consumption of marijuana for persons age 21 or older, “so long as any consumption is not conducted openly and publicly or in a manner that endangers others.” “Openly” and “publicly” are not defined in the constitution, or in the state regulations or the Retail Marijuana Code. The City may by ordinance define unlawful acts which can include sales or distribution to minors, consumption in public places or on public property, and consumption within quasi-public places such as restaurants and nightclubs. Staff has already fielded questions about sales at the Saturday Market. This may not meet the State’s requirements, but a local prohibition may also be necessary. Prosecution of cases involving marijuana consumption or use have not been a priority with the District Attorney’s Office in our judicial district. So, any desired local control is best handled through Municipal Court. P4 II. 9.16.13 Work Session: Recreational Marijuana Page 5 of 9 Question. Does the City wish to enact an ordinance defining unlawful open and public consumption? Options. A municipal ordinance that prohibits public consumption, similar to the open container prohibition, would enable a level of local control to assure that the constitutional limitations are being followed and enforced as needed. The City is not required to adopt such a prohibition. Recommendation. Staff, after consultation with the Police Department, recommends an ordinance to address public consumption. Question. Does the City wish to enact an ordinance defining other unlawful acts? Options. Municipal ordinances provide local control to assure that the constitutional limitations are being followed and enforced as needed. Clarity regarding the Saturday Market will also assist city staff and the market vendors. Recommendation. Staff, after consultation with the Police Department, recommends an ordinance prohibiting public consumption, underage possession and consumption, sales at the Saturday market and other illegal acts within the City limits. PRIVATE CLUBS: Background. The State law seems unclear whether the public consumption prohibition extends to quasi-public spaces such as restaurants, bars, nightclubs, and membership clubs. The City Attorney, and attorneys around the State, do not know how the law will be interpreted. A conservative position on the issue would suggest that clubs are not permitted as they were not cited in the constitution. As the State and communities gain experience with this new law, this question will likely be answered through legislative or judicial means. Consumption within private space, such as a residence, is allowed. The City currently prohibits private clubs. This is an attempt to prohibit the privatization of retail spaces downtown as penthouse annexes. Question. Should the City allow private clubs oriented to the consumption of Recreational Marijuana? Options. The City could develop a definition for Marijuana Clubs. This would mimic that of a Bar or Nightclub and likely require similar local licensing. The City is not required to allow this use. The City could also specifically add a prohibition in an “unlawful acts” ordinance. Recommendation. Staff recommends the City not allow “pot clubs.” The law is sufficiently vague and untested. Staff recommends Aspen not be the testing ground for exploring the boundaries of the new law. ZONING LIMITATIONS: P5 II. 9.16.13 Work Session: Recreational Marijuana Page 6 of 9 Background. The new State law does not supersede local zoning regulations and the City can prescribe the location of retail sales of marijuana. Staff considers the sale of Recreational Marijuana to be most-similar to a Liquor Store. Liquor Stores are categorized as a retail use. Retail is allowed in the CC, C1, CL, and NC zones. Limited retail is permitted in the SCI, MU and Lodge zones. Staff considers the sale of Medical Marijuana to be most-similar to a Pharmacy, which is a service use. When the issue of Medical Marijuana first arose in 2009, the code was interpreted for the use to be treated as a pharmacy. The code was never formally amended. Service uses are allowed in the CC, C1, CL, NC, and MU zones and as a conditional use in the Lodge zone. Question. Which areas of the City should allow retail sales of Recreational Marijuana. Which areas should permit Medical Marijuana sales? Options. Sales of Recreational and Medical Marijuana can be limited to a specific zone district, a set of zones, or limited to a specific geographical area. Recommendation. Staff recommends the sale of Recreational Marijuana be categorized as a retail use and allowed in all areas permitting retail. This would include sales in the SCI zone but only as 25% of a larger operation, such as growing or manufacturing. Staff recommends Medical Marijuana sales be classified as a service use. SCHOOLS BUFFER & SPACING REQUIREMENTS: Background. The State law prohibits sales of Medical Marijuana within 1,000 feet of a school. “School” is defined in the State’s Medical Marijuana Code to include “a public or private preschool or a public or private elementary, middle, junior high, or high school.” The State law does not prescribe a school buffer for Recreational Marijuana. In the Retail Marijuana Code, “school” is defined to include “a public or private preschool or a public or private elementary, middle, junior high, or high school or institution of higher education.” Experience with Medical Marijuana has included heavy Federal agency enforcement of the State’s 1,000-foot school buffer. Without a State-mandated buffer for recreational Marijuana, it is unknown whether Federal agencies will expect Recreational Marijuana operations to comply with a school buffer and to what degree it will be enforced. Highlands is approximately 2,500 feet from the District campus. A 1,000 foot buffer around the Yellowbrick would affect 4-5 blocks of Main Street, a few blocks of downtown, and the Clark’s Market property. Question. Should the City adopt a schools buffer? Which “schools” should be buffered? Options. A buffer from schools is not required for retail sales. The City could adopt a 1,000-foot rule, a greater or lesser buffer, or no buffer at all. The City can specifically define the “schools” from which a buffer requirement is based. This may be particularly helpful if questions in the future arise about buffering from the ski school, cooking school, etc. P6 II. 9.16.13 Work Session: Recreational Marijuana Page 7 of 9 Recommendation. Staff does not believe a buffer is critical. The District campus is sufficiently removed from commercial areas – the closest being highlands at approximately 2,500 feet. So, adding a buffer from the school campus would be redundant. A 1,000-foot buffer from the Yellowbrick school affects a large number of properties that do not otherwise appear to be in close proximity, including Main Street from the Jerome to 4th Street, portions of downtown, and the Clarks Market property. A buffer is also counter to how pharmacies and liquor stores are regulated by the City. If a schools buffer is desired, staff suggests either a 500-foot buffer or prohibiting licenses on adjacent properties (adjacent includes across a street). Staff would also suggest defining schools as the District campus and the Yellowbrick properties. In additional to local laws, many businesses in town are subject to State and Federal regulations. Staff strongly suggests potential Recreational Marijuana businesses become familiar with applicable State and Federal laws, policies, and practices. Compliance with local regulations will not mean businesses are impervious to State or Federal regulation. Question. Should the City adopt spacing requirements between facilities? Options. Some communities enact “spacing” requirements limiting how close one operation can be to another. This is typically done with “undesirable uses” and is used when an outright prohibition is not legally or politically acceptable. A spacing requirement is not required. Recommendation. Staff does not believe spacing requirements should be implemented. Installing a spacing requirement on the fine-grain nature of downtown could result in a de-facto monopoly where one operation is protected from all other competitors. Unless there is a clear public purpose, staff does not believe this is necessary. ZONING FOR CULTIVATION, MANUFACTURING, TESTING: Background. The State allows three additional types of retail licenses – cultivation, manufacturing, and testing facilities can be permitted or prohibited by the City through zoning restrictions. Two additional licenses are allowed for medical marijuana – optional premises cultivation and medical marijuana-infused product manufacturing facilities. These can also be permitted or prohibited by zoning restrictions. (Cultivation and Optional Premises Cultivation is the growing of marijuana. Manufacturing is the alteration of marijuana into products such as “consumables” or “infused products.” Testing is the inspection of marijuana or products for THC content or other quality-control aspects.) The City allows “agricultural uses” in certain zones. Most-notable is the allowance for agricultural uses in all residential zones as a conditional use (requires a discretionary review). P7 II. 9.16.13 Work Session: Recreational Marijuana Page 8 of 9 Depending on the specific activities occurring and the techniques used, some of these operations can produce significant off-premises odors. Staff is uncertain how much demand for these facilities will exist. Questions. Should the City allow for cultivation, manufacturing, and testing facilities? If so, where? Should these facilities be permitted in residential zones? Should these uses be permitted downtown? Options. These facilities are not required to be permitted and the City’s decision on these facilities can differ from the retail question (the City could permit retail, but not testing; or, cultivation but not retail.) The City can restrict these uses to specific zones or areas of town or prohibit one or more of them entirely. Recommendation. Staff suggests all five uses be added to the SCI zone as permitted uses. This is the area of town best suited for quasi-industrial uses. Staff recommends these uses be provided a definition and specifically not allowed in residential zones or downtown zones. Staff recommends the City not require special ventilation systems unless these systems are a requirement of the Building Code. There are multiple permitted uses throughout town with potential for off-premises effects. The City has not created special building code provisions for each type of use. TAXES AND FEES: Background. Fees. The Constitutional and statutory scheme for regulating both medical and retail marijuana contemplate that local governments can assess fees to cover the costs of implementation, administration and enforcement of marijuana businesses. Under the Medical Marijuana Code, local jurisdictions have the specific authority to charge and collect application fees and licensing fees for medical marijuana businesses. For retail marijuana facilities, existing medical facilities seeking a retail license will pay a state retail application fee of $500.00 of which $250.00 will come to the City with a copy of the state application. New retail facility license application fees (not accepted by the state until July 2014) will be $5000.00, with half that fee coming to the City. Those jurisdictions considering licensing retail marijuana facilities are proposing license fees comparable to what they charge for medical marijuana licenses. In addition, for retail facilities, local jurisdictions can charge an “operating fee” per Amendment 64, defined in the Retail Marijuana Code as fees that may be charged for costs, including, but not limited to, inspection, administration, and enforcement of retail marijuana establishments. Taxes. Existing medical marijuana sales are subject to existing sales taxes, and Aspen has collected a combined total of over $100,000 in sales tax by the three existing facilities since they started business in 2009. Retail marijuana will also be subjected to these same sales taxes. However, there is a ballot issue this November to impose an additional 15% tax on sales from cultivation facilities, and another 10% tax on retail sales. Local jurisdictions can propose a ballot measure for an increase in local sales taxes as well, which several local jurisdictions have P8 II. 9.16.13 Work Session: Recreational Marijuana Page 9 of 9 scheduled for this November. Local jurisdictions that allow retail facilities will be getting a portion of the state 10% sales tax, if it passes. In Aspen, because we do not yet have any licensing specifically for medical marijuana, the existing medical marijuana businesses only have to pay the Occupational Tax per Chapter 23.44 of the Municipal Code, with the amount based upon the number of employees, before a business license issues. For the three existing facilities, that fee has been either $150.00 or $200.00. Retail marijuana businesses would be required to pay the same Occupational Tax in connection with its business license. By contrast, businesses that are licensed to sell alcohol in Aspen are exempt from the Chapter 23.44 occupational tax, as there is a specific occupational tax for these businesses set out in Chapter 5, at 5.12.030, ranging from $165 for an Arts liquor license to $2025 per year for a dance/cabaret liquor license. The local liquor license fees are set by the state, $1000 for a new license, $700.00 for a transfer and other fees for approvals such as renewals and temporary licenses. Until the City has experience regulating marijuana businesses, the appropriate operating, licensing and application fees authorized are difficult to estimate. The Retail Code defines “operating fees” as fees charged by local jurisdictions, including costs for inspection, administration and enforcement of retail marijuana establishments. Such fees can be set by ordinance; any new taxes will require a vote. Question. What fees should be addressed in any licensing ordinance for marijuana businesses? Options. The City could choose to require only the application fees from the state for the first year or charge an additional amount;. It could base licensing fees on comparable fees for liquor licensing. Operating fees could be deferred until a later time once there is data on actual cost involved. Recommendation. Staff recommends that Medical Marijuana facilities be charged an application and licensing fee comparable to liquor license fees to start. For retail facilities, staff recommends accepting one-half the state application fees to start. License fees could be comparable to those charged for liquor establishments. All fees, including the addition of an operating fee, could be revisited after a year or so of experience in administering and enforcing any licensing regulations. CITY MANAGER COMMENTS:_____________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ ATTACHMENTS: Exhibit A – State Law Exhibit B – Draft resolution P9 II. 1 Exhibit A to 9-16-2103 Work Session Memorandum on Marijuana Summary of applicable constitutional provisions, state marijuana codes and regulations and federal position. Colorado Constitutional Amendments: Medical Marijuana. The use of marijuana for medicinal purposes was approved by state voters in 2000, when Amendment 20 was adopted. Currently found in section 14 of article XVIII of the Colorado Constitution, entitled “Medical use of marijuana for persons suffering from debilitating medical conditions,” this amendment creates an affirmative defense in specified circumstances to state prosecution under §18-18-406, which makes unlawful the possession, use and sale of marijuana. The state legislature adopted laws in 2010, , discussed below, which created a dual licensing system for medical marijuana, authorizing three types of licenses for three types of operations as follows: 1) medical marijuana center; 2) medical marijuana-infused products manufacturer; and 3) optional premises cultivation operation. Recreational or Retail Marijuana. In November of 2012, the voters of the state approved the passage of Amendment 64, “Use and Regulation of Marijuana,” now included in article XVIII, section 16 of the Colorado Constitution, entitled “Personal use and regulation of marijuana.” This section provides that it is not unlawful nor an offense under Colorado law or any local law nor the basis for seizure or forfeiture of assets for persons 21 years of age or older: • to possess, use, display, purchase, transport, and transfer (without remuneration) to other persons 21 years of age or older, one ounce or less of marijuana, so long as any consumption is not conducted openly and publicly or in a manner that endangers others; • to possess, use, display, purchase or transport marijuana accessories; and • to grow, possess, process or transport no more than six marijuana plants, with three or fewer being mature, so long as the growing is in an enclosed, locked space, not conducted openly or publicly, and not made available for sale, specifically stating that these acts are not unlawful. It also authorizes the state to P10 II. 2 regulate the growth, manufacture, and sale of marijuana through a system of state and local licensing. Amendment 64 also allows for the lawful operation of marijuana-related facilities, if validly licensed, including the following marijuana-related facilities: • retail marijuana store • marijuana cultivation facility • marijuana product manufacturing facility • marijuana testing facility Amendment 64 further mandates a timeline for regulation of marijuana: • July 1, 2013 - Department of Revenue (“DOR”) to enact regulations. (Emergency regulations were adopted on July 1, 2013, with adoption of the final regulations, now available only in draft form, to occur on or before September 25, 2013, copy attached.) • October 1, 2013 – DOR to begin accepting applications, initially only from existing medical marijuana (“MMJ”) facilities; copies of applications and one- half the state application fees will be sent to the local jurisdiction unless local jurisdiction has prohibited marijuana-related facilities; applications to be issued within 45-90 days after receipt by DOR, unless not compliant with state regulations or DOR is notified by locality that applicant is not in compliance with local regulations in effect at time of application. If locality limits number of licenses, DOR to solicit and consider input from locality as to its preference for licensure. • October 1, 2013 – local jurisdictions to enact ordinance or regulation specifying entity that will be responsible for licensing should state fail to adopt regulations or process and issue licenses. • January 1, 2014 – DOR to begin issuing licenses to those existing MMJ facilities desiring to convert to retail facilities Amendment 64 also provides local options as follows, where the local government can: • At any time prohibit operation of marijuana facilities by passing an ordinance, or through an initiated or referred measure on a general election ballot during an even-numbered year; • Enact ordinances or regulations governing the time, place, manner and number of marijuana facilities; • Establish procedures for issuance, suspension and revocation of licenses; • Establish schedule for annual operating fees (note: specific local application and license fees are authorized in the constitution only if the local license is issued due to failure of state to issue): P11 II. 3 • Establish civil penalties for violation of local time, place, manner regulations Amendment 64 includes language to assure: • the ability of employers to have policies to restrict use of marijuana by employees; • the prohibition of any transfer to or use of marijuana by anyone under 21; • the ability of any person, employer, school, hospital, detention facility, corporation or other entity that occupies, owns or controls a property from prohibiting or otherwise regulating use or growing of marijuana on that property; • separation of medical marijuana facilities from retail marijuana facilities. Additional provisions include privacy protection, prohibiting DOR from requiring provision of personal information other than government-issued identification to determine age and prohibiting any requirement that a retail marijuana store acquire and record personal information about consumers other than what is typically acquired in a financial transaction conducted at a retail liquor store. State laws and regulations. The state legislature responded to the passage of Amendment 64 with a number of laws during the 2013 legislative session, amending some of the 2010 laws regarding medical marijuana in Title 12, Article 43, the Colorado Medical Marijuana Code (hereinafter “Medical Code”), and adding a new Article 43.4 “Colorado Retail Marijuana Code,” (hereinafter “Retail Code”), regulating what the voters approved in Amendment 64. In addition, the DOR adopted its permanent regulations on September 9, 2013. These laws and regulations provide for additional local decisions, as well as addressing application and licensing procedures and the interaction between state and local licensing. The Retail Code allows only a person operating in good standing with a license (or application for state license pending prior to December 12, 2012) for a medical marijuana facility to apply for a retail license for the time frame between October 1, 2013 and July 1, 2014; the licensee can surrender its medical license upon receipt of the retail license or, if the local jurisdiction allows, the licensee can have dual operations on the same premises. Persons without medical marijuana licenses may file with the state a notice of intent to apply for retail license, beginning January 1, 2014, but license applications may not be submitted to the state until July 1, 2014. The Retail Code provides for state and local licensing. Of note for Council’s discussion are the following: • Within 7 days of receipt, the state shall forward a copy of state application for any marijuana establishment to the local jurisdiction UNLESS the local jurisdiction P12 II. 4 has prohibited operation of retail marijuana establishments; the local jurisdiction shall determine whether it complies with local restrictions on time, place, manner and number of marijuana businesses and shall so advise the state.. • Local jurisdiction may impose a separate local licensing requirement as part of time, place, manner and number restrictions. • If City chooses to license, it may choose to conduct public hearing on applications. • A license applicant is prohibited from operating a licensed retail marijuana business without state and local jurisdiction approval, C.R.S. § 12-43.4-304. State can issue a conditional license, but if no local jurisdiction approval within one year from date of state approval, state license shall expire and not be renewed. If a local denial, state license shall be revoked. • Retail marijuana establishment may not operate until it is licensed by the state licensing authority and approved by the local jurisdiction, C.R.S. § 12- 43.4- 309(2). The Retail Code includes discretion to local jurisdictions on whether to allow dual operations of medical marijuana facilities and retail marijuana facilities. Consumption of marijuana or any marijuana product on licensed premises is prohibited for all licensed establishments. Changes to the Medical Code as a result of the passage of Amendment 64 and the enactment of the Retail Code include procedural changes that now mirror the process under the Retail Code, specifically that the state will issue a conditional license pending approval or denial of the local license. The changes include specific provisions for those medical marijuana facilities that were operating as of July 1, 2010 as an established locally approved business, allowing such businesses to continue to operate under a conditional state license while an application is pending with a local licensing authority. Otherwise, C.R.S. §12-43.3-305 has been amended to state that a “license applicant is prohibited from operating a licensed medical marijuana business without both state and local licensing authority approval.” The state regulations relating to medical and retail marijuana are extensive and detailed, including, but not limited to, the following topics; • licensing and related fees, including changes in ownership and locations • requirements for all licensed premises, including security alarms, video surveillance, lock standards, hours of operation, and inventory tracking • specific regulations for retail stores, including restricted access areas, acceptable forms of identification, inventory tracking systems, health and safety regulations • specific regulations for retail marijuana cultivation facilities • specific regulations for retail marijuana products manufacturing facilities • specific regulations for retail marijuana testing facilities P13 II. 5 • transportation and storage • records • packaging and labeling requirements • advertising, including a prohibition on targeting out of state persons • signage and marketing • enforcement • discipline • local jurisdiction and law enforcement procedures Federal law: An ongoing concern for both the medical and the retail marijuana businesses in Colorado has been whether the federal government will continue to enforce the Controlled Substance Act, under which marijuana is still illegal, against businesses (and/or individuals) that are engaging in legal activities under Colorado law. On August 29, 2013, the U.S. Department of Justice, Office of the Deput y Attorney General, issued a Memorandum for all U.S. Attorneys entitled “Guidance Regarding Marijuana Enforcement.” Basically, the Memo lists the enforcement priorities relating to marijuana and suggests (“as guidance”) that federal enforcement resources and efforts be focused on any person or organization that interferes with those priorities, which are: • preventing distribution to minors • preventing revenue from sales from going to criminal enterprises, gangs, and cartels; • preventing diversion to other states where it is still illegal • preventing state authorized activity from being used as a cover for other illegal activity • preventing violence and use of firearms in cultivation and distribution • preventing drugged driving • preventing growing on public lands • preventing possession or use on federal property The guidance is based on the “expectation that states and local governments that have enacted laws authorizing marijuana-related conduct will implement strong and effective regulatory and enforcement systems….” In addition, the U.S.Senate recently began discussion of needed changes in laws to allow the legal marijuana businesses to operate like other businesses. Many in Colorado have not used the banking system due to the possibility of federal forfeiture actions or repercussions to the banks themselves. P14 II. RESOLUTION NO. _87_ Series of 2013 A RESOLUTION OF THE CITY COUNCIL OF ASPEN, COLORADO, DESIGNATING A LOCAL LICENSING AUTHORITY FOR MARIJUANA LICENSES AND ESTABLISHING WHEN APPLICATIONS FOR LOCAL LICENSES WILL BE ACCEPTED BY THE LOCAL LICENSING AUTHORITY WHEREAS, in November 2012, Colorado voters passed Amendment 64, which amended Article XVIII of the Colorado Constitution by the addition of a new Section 16 concerning the personal use and regulation of marijuana; and in November 2000, Colorado voters passed Amendment 20, adding a new Section 14 to Article XVIII of the Colorado Constitution, concerning medical use of marijuana for persons suffering from debilitating medical conditions; and WHEREAS, these two amendments legalize certain marijuana businesses and allow for the dual licensing of such businesses by the state and local jurisdictions or the prohibition of such businesses by local jurisdictions; and WHEREAS, section 16(5)(e) of Article XVIII requires a local jurisdiction to specify, not later than October 1, 2013, an entity within the local jurisdiction responsible for processing applications submitted for a license to operate a retail marijuana establishment and for the issuance of such licenses in the event the State fails to meet its constitutional mandates relating to licensing such establishments; and WHEREAS, the State has enacted codes and regulations for both medical and retail marijuana and is mandated by Amendment 64 to begin accepting license applications for retail marijuana establishments by October 1, 2013; and WHEREAS, pursuant to the Colorado Retail Marijuana Code (Article 43.4 of title 12, C.R.S.), on October 1, 2013, the Colorado Department of Revenue will begin sending to the City of Aspen a copy of any license application it receives for licensing a retail marijuana facility within the City of Aspen, together with one-half the application fee, unless the City of Aspen has prohibited such facilities within its jurisdiction; and WHEREAS, City Council intends to pass an ordinance to authorize the licensing of some or all medical and retail marijuana facilities within its jurisdiction, but the ordinance will not be adopted and effective before the October 1, 2013 deadline; and WHEREAS, City Council desires to designate its local licensing authority, to advise the Colorado Department of Revenue of such designation, and to set out a timeframe for the local licensing authority to accept local license applications. P15 II. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO. Section One. Local Licensing Authority. The City of Aspen Liquor Licensing Authority is hereby designated as the Local Licensing Authority responsible for processing applications submitted for a license to operate any marijuana establishment within the City of Aspen, in accordance with rules and regulations to be enacted by ordinance of the City of Aspen. Section Two. Processing of Applications. No application for a license to operate any marijuana establishment within the City of Aspen will be processed or considered by the Local Licensing Authority until after the effective date of the ordinance authorizing such local licensing of marijuana facilities. Any state application for the licensing of a marijuana establishment within the City of Aspen received by the City of Aspen prior to the effective date of such ordinance will be held in the City Clerk’s office and will not be deemed complete until after the effective date of the City’s licensing ordinance, submission of any local licensing or application fees required by such ordinance, and submission of any local application or information not included within the state application. Section Three. Notification to the Colorado Department of Revenue. The City Clerk is directed to notify the Colorado Department of Revenue (“DOR”) before October 1, 2013 that any license applications to be forwarded to the City by the DOR shall be sent to the Local Licensing Authority, c/o the City Clerk’s Office. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 23rd day of September, 2013. ___________________________________ Steven Skadron, Mayor I, Kathryn Koch, duly appointed and acting City Clerk, do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held September 23, 2013. __________________________________ Kathryn S. Koch, City Clerk P16 II. NOTICE OF SPECIAL MEETIN At the request ofMayor Skadron Aspen Colorado. The , 2013 there will be a special City Cit agenda for that y Council Ch y Council meeting meeting is: ambers, 130 South Request for Executive Galena, Session_C.R.S. 24.6.402(4) (a property°pertY Aquisitions ')d '�4c Notices delivered to: Kathryn S. Koch City Clerk Mayor Skadron Councilman Daily Councilwo m Council an Mullins Council man Romero James man Frisch Ste e Ba. TrUe' city attorney rwick, city manager EXECUTIVE SESSION Date September 16, 2013 M. Call to order at:�',2t� I• Councilmembers present: �® Ann Mullins Councilmembers not present: C] Steve Skadron ❑ Ann Mullins ❑ Adam Frisch ❑ Steve Skadron �] Art Daily © Adam Frisch Dwayne Romero ❑Art Daily II. ❑ Dwayne Romero Motion to go into executive session by- Other Other persons present: seconded by FOR: AGAINST: 1 114 Ann Mullins LN Steve Skadron ❑Ann Mullins ❑Adam Frisch ❑ Steve Skadron ®Art Daily ❑Adam Frisch Dwayne Romero ❑Art Daily III. ❑Dwayne Romero E EXECUTIVE SESSION MOTION TO CONVENE FOR THE PURPOSE O Q.R.S. 24-6-402(4) F DISCUSSION OF: (a) The purchase, acquisition, lease, transfer, or sale of any real,personal, or other (b) Conferences with an attorney for the local public body for the Purposes roperty interest questions. rp oses of receiving legal advice on specific legal (c)Matters required to be kept confidential by federal or state law or rules and regulations. (d) Specialized details of security arrangements or investigations, including defenses and foreign, and including where disclosure of the matters discussed might reveal ' formation that could be used for the Purpose of committing, or avoiding prosecution for, a violation of the law; g information against terrorism, both domestic (e)Determining Positions re , relative to matters that may be subject to negotiations; developing strate f and instructing negotiators; gy or negotiations; (f) (I) Personnel matters except if the employee who is the subject of the session h as requested an open meeting, or if the personnel matter involves more than one employee, all of the employees have requested an open meeting. W. ATTESTATION: The undersigned attorney,representing the Council and being present at the exe cutive session, attests that the subject of the unrecorded portions of the session constituted confidential attorne y cl- ' ien ommunic ' The undersigned chair of the executive session attests that the disc to the topic(s)described in Section Ill, above. ssi ons in this executive session were limited Adjourned at: ; �3