J.P. List
4/9/2015

As of January 1 2014 recreational use, possession, and sale of marijuana is legal in the state of Colorado. That sounds simple enough. However, that is just the beginning of the issue. What does it mean to be legal? Is it legal like tobacco or like alcohol?
The answer is neither of these, but it is much closer to alcohol than it is to tobacco. Unlike tobacco, the restrictions on marijuana go much further than the lawful age of use, and some location based restrictions. There are definite parallels with alcohol regulations, but that is not a perfect analogy either. Marijuana laws in Colorado are still evolving. That is one of the features of a common law system, the legislature writes the law, but it is not truly clear what it means until courts get their hand on it. The courts certainly will get their hands on the laws in Colorado. In fact, they already have, though it is taking them quite a while to interpret some of the laws. In this post, I will explore the current state of the law in Colorado, and the potential future of legalization.

As of now Marijuana is treated much like alcohol, it is available to individuals over the legal age, and like hard alcohol in Colorado, it is only available in specific stores. Consumption is also regulated in many different ways. For example, it is illegal to smoke marijuana on the street, or in public places. It is legal to have two ounces on marijuana on you at any time. However, there is a limit to the amount of marijuana allowed in your system at a given time when driving. At this time that limit is five nanograms of THC per milliliter blood. One of the odd side effects of legalization is that before this, there was no clear limit of the acceptable amount of THC in the blood. Now, we all need to learn what five nanograms of THC per milliliter means on a practical level. Unfortunately, I do not have a good example of what this is like. The rules for concentration of THC in the blood are unclear in the work place. Part of this is due to the nature of legalization. While Colorado as a state has said that marijuana is legal, the federal government has kept marijuana on the list of controlled substances. The Supreme Court of Colorado has been grappling with this question in a case called Coats v. Dish Network.

Briefly, Mr. Coats, was a paraplegic with a prescription for medical marijuana to treat symptoms associated with his condition. Dish Network had made some accommodations for his condition, and Mr. Coats was recognized as a leading customer service agent. Dish Network has a drug use policy, which prohibits the use of marijuana. When he was randomly selected for drug testing, he failed. Due to the failed test, Mr. Coats was terminated. He challenged the termination based on the fact that he was not using marijuana at work, only at home, and employers are not allowed to dismiss an employee for lawful activities outside of work. This case will go a long way toward deciding how firmly entrenched legalization will be in Colorado.

Prior to legalization, failing a drug test had predictable consequences. You fail you are terminated. Under legalization, those determinations get much more complicated. For example, if you are tested, and found to have alcohol in your system at work, it is assumed that you have been drinking on the job, since alcohol does not stay in your system very long. Marijuana however stays in your system for a long time, so it is harder to determine from a test, if a person has been using at work.

Drug testing is a standard procedure after an accident at work, and given that THC stays in your system well after you have used, what weight is given a positive test for marijuana in a state where it is “legal” for recreational use? Complicating matters is that there while there are regulations covering the concentration of THC in recreational marijuana products, there are currently no uniform testing procedures. Different procedures can give widely varying results for concentrations of THC. As it stands, although marijuana is legal in Colorado you are still using at your own risk, because of potential legal consequences. This uncertainty goes beyond the use marijuana in connection with work; it applies to the future of legalization as a whole.

Threats to legalization in Colorado

Threats to legalization broadly can be classified in two categories, legal issues and political considerations.

Legal Threats
Right now Colorado is facing a number of legal challenges to the legalization of marijuana. There are three suits in federal court, and one that, will be heard by the US Supreme Court.
There are two suits that have been filed by residents of Colorado trying to block the changes brought on by amendment 64. Both of these suits claim burdens that are the result of the legalization of marijuana in the state. The plaintiffs are charging Governor Hickenlooper with violation of RICO laws by allowing marijuana to be legalized in Colorado, in violation of federal laws

One case claims that the construction of marijuana cultivation facility will destroy the value of private property because there will be an illegal facility built which might interfere with the views in one direction from the property. Another case filed by private citizens claims that the planned opening of a recreational marijuana dispensary in Frisco has already led to a loss of business revenue for a Holiday Inn next to the proposed facility. Both of these cases have a co-plaintiff Safe Streets, a DC based anti-legalization group. In order to be successful the plaintiffs must be able to show that they have suffered real definite harm that will be the hardest part of these suits.
Six Colorado sheriffs filed the third suit in federal court. They are claiming that the legalization of marijuana in the state has left the officers under their control in an untenable situation. Every time that an officer stops a person for possession of marijuana the officer needs to choose between enforcing the laws of the state of Colorado, or the federal laws which consider possession of any amount of marijuana to be a criminal act. If this claim sounds familiar, it is because it is the same as the claims surrounding enforcement of immigration policy. The response to this should be largely the same. Sheriffs are not charged with enforcing federal law, they are officers of the state, and enforce state law regardless of personal feelings.

The suit before the Supreme Court is brought by Nebraska, and Oklahoma. These states are claiming that they are suffering negative effects due to Colorado’s legalization of marijuana. Their claims center on a claimed increase of marijuana related arrests and trials in the areas adjacent to Colorado. The extra cost of these actions is a burden placed on them by Colorado resident’s decision to legalize marijuana for recreational use. The claims center on the Supremacy clause of the constitution, which prevents a state from making a law, which is contrary to federal law. Washington and Oregon have filed briefs on the side of Colorado. The Supreme Court has not decided if it will hear the case, but if it does, it will likely be in the next term. If the Court decides against Colorado, it will only effect the decriminalization of recreational marijuana, not the medical marijuana industry. Even if the Supreme Court says that legalization in Colorado does not violate the rights of neighboring states, there are political threats to legalization.

Political threats
Colorado and Washington are allowed to have legalized marijuana because the current administration has directed the Department of Justice to not enforce federal laws prohibiting the use, sale, or growing of marijuana. The next president may very well decide that they disagree with this policy, and return to enforcement of federal drug law. Even though this may not change Colorado’s constitution, it would effectively end legalization. As decriminalization efforts take hold in more states, and issues surrounding regulation are ironed out by Colorado and the other states that are on the forefront of this issue, it becomes increasingly likely that the federal government will continue to allow states to decide on their own how to handle marijuana. However, as long as marijuana is considered a controlled substance by the federal government, it is not truly legal.

This partial legality makes it difficult to do business in the industries of medical and recreational marijuana. Most business issues arise from the conflict with federal rules. Currently all marijuana cultivation, testing and retail facilities must be located in the state where the product is sold. This means that there are limited possibilities to leverage economies of scale. Interstate transportation of marijuana is illegal since the federal government controls the rules of interstate commerce.

It is also impossible for a business involved in the marijuana trade to deal with a bank. Banks are subject to federal regulations, which prevent them from taking deposits from businesses that are involved in the drug trade. This regulation prevents money laundering, and prevents illicit funds from entering into the legitimate economy, and in the case of banks in Colorado and Washington, it prevents legitimate marijuana related funds from entering into the banking system. This means that marijuana businesses have to be cash only operations, no credit cards, no debit cards, and no checks ( though, I am not sure how many people use checks anymore.) That much cash is cumbersome, it takes a lot of space, and it seriously raises the risks associated with doing business. Companies that grow, test or sell marijuana have to keep their profits, and savings in cash, which means that they need to spend a lot more money on security. Colorado has been exploring ways to allow marijuana related businesses to use some kind of banking services, but as of this writing there is no concrete solution in place.

So just how legal is marijuana in Colorado? The answer is, it is legal (mostly.) The next few years will clarify the answer to this question, but for now, it is legal at home, or in private, unless you get tested at work (maybe).

This is a blog post, and nothing contained herein constitutes legal advice.

 

UPDATE

7/4/2015

The Colorado Supreme Court has finally ruled on Coats v. Dish Network, 13 SC 394 (Colorado 2015)  Opinion of the Colorado Supreme Court .  The Court found that Dish Network has the right as a company to test for, and terminate employees for using marijuana, since it is still a federally controlled substance.  Because marijuana is a schedule one substance, the law preventing companies from interfering with lawful activities outside of work does not apply.