Marijuana: constant battle for acceptance

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KC Stark, founder and owner of Studio A64, says the time has come for public acceptance of the new state law, but others aren’t so sure.

KC Stark, founder and owner of Studio A64, says the time has come for public acceptance of the new state law, but others aren’t so sure.

At first glance, KC Stark seems an unlikely figure to lead a revolution.

A former medical marijuana dispensary owner who now serves as a marijuana consultant, Stark is challenging the Colorado Springs city government’s reticence about recreational marijuana use.

He’s opened Studio A64, a members-only cannabis social club, inviting a potential firestorm of criticism from local leaders, who still seem unsure of the wisdom of allowing recreational use of marijuana.

“I wish Benjamin Franklin was here to help with this,” Stark said. “This is about being American, the right to petition the government for change. It’s about freedom. Franklin would have been behind this.”

Regardless, Stark is standing behind Amendment 64, a voter-approved state law that allows recreational use of marijuana for adults 21 and older. The club, located above the Triple Nickel saloon at 332 E. Colorado Ave., is one of a handful of social clubs in Colorado Springs and Denver.

Stark says he is keeping his club purposely low-key. The entrance is a lit staircase to the second floor, and admittance is allowed only with a driver’s license and an emergency contact. He opened quietly in December, and says that talking publicly is a risk.

“But I’m gonna stick my neck out,” he said. “Someone has to be the first. I don’t mind that it’s me. I believe in this, and I believe in freedom. I’m in full compliance with the Constitution and the Bill of Rights and Amendment 64.”

But Stark’s club, which doesn’t sell marijuana, could still run afoul of City Council, which is considering the city’s response to the new law. Beyond the possibility of new city regulations, municipal/corporate attorney Kyle Sauer points out that state law prohibits indoor marijuana smoking in restaurants, bars and clubs.

Social clubs came up before City Council this week, when Sauer briefed Council on its options: Regulate retail sales of marijuana, issue a temporary moratorium to study the issue further, or opt out completely. The city also could create new zoning requirements, which could ban social marijuana clubs.

But none of that will happpen quickly. Councilors Jan Martin and Jill Gaebler will meet to create a timeline for Council action, which will include at least one public hearing.

“We know there are a lot of interested parties in the matter,” Martin said. “I would suggest a process for public input — sooner rather than later.”

The City Council has broad authority to govern the sale of recreational marijuana — and that authority won’t affect already-operating medical marijuana dispensaries.

Sauer told councilors they could limit the number of retail stores; limit where the stores are located and can ban retail sales completely. Council can ban edibles and product manufacturing within the city limits. But it can’t ban use completely — the state amendment allows people to have up to six plants in their homes for personal use. And adults can give away up to an ounce of that to another person.

Focus on the moment

Stark has invested in Amendment 64 as well. He runs a Marijuana Business Academy, teaching people how to open marijuana businesses and comply with state regulations. He recently sold his dispensary to invest in Studio A64.

It’s not just about the marijuana, he says. He has karaoke night with a machine, but he also has instruments for a full band — guitars, drums and microphones. He hosts open-mic nights for local bands, and a “Canna-dance” night for dance classes. Fridays are ladies nights, and there’s no cover charge.

Stark isn’t overly worried about being shut down. He doesn’t sell marijuana at the club — that’s still not legal. He sells water, coffee and paraphernalia needed to partake, such as pipes, bongs or inhalers. But it’s bring-your-own cannabis.

A64 is a social club, meaning Stark reserves the right to choose members. He says he’s particular about whom he allows inside the doors.

“We want professionals, business people,” he said. “We won’t let just anyone in. We want the city’s leaders, political leaders, artists. We support the local community.”

However, Stark hasn’t received a warm welcome from the city’s business establishment, namely the Colorado Springs Regional Business Alliance.

“I approached them, and they weren’t very receptive,” he said. “So if they aren’t receptive, I can spend my money elsewhere.”

It costs $10 a night to get into the club, with a 50 percent discount for medical marijuana card-holders. On a recent Saturday night, attendance was light, with about 10 people playing cards, listening to an amateur poet and just hanging out. There’s no smoking out front; people discreetly move to the back of the club, unless they’re using the inhalers, which burn marijuana without smoke.

“This is a safe, upscale location,” Stark said. “And I think we’re doing the right thing. I’m standing on the edge of the end of prohibition. Seventy-six years after alcohol prohibition ended, now we’re ending prohibition of marijuana. We’re making history.”

Stark relies heavily on social media and word-of-mouth to promote the social club, and he says he thinks he has the right business mix to withstand even an outright ban of retail recreational sales, which the city might do.

“I just sell water and coffee,” he said. “I don’t sell marijuana. I create an easy atmosphere to enjoy it, to be creative, for people to pick up an instrument and play or just hang out.”

But he believes firmly that marijuana has a legal place in American culture. “We have to change the mindset, end the fear and loathing,” he said. “Stop the ignorance. This is an industry that’s been in the dark too long.”

What happens next

Some councilors apparently want to ban retail sales first, and study it later.

“Can we ban it completely?” asked Don Knight. “We could pass it all up, then there’s no timeline. We could come back and revisit it with as much time as we needed.”

The deadlines at the state level are tight. Under the law, the Department of Revenue has until July 1 to issue regulations, and that’s the deadline the city attorney’s office suggested for a decision about an outright ban. Current dispensaries can apply for retail licenses by Oct. 1 and can start selling it by Jan. 1, 2014.

Even with an outright ban, Martin said there should still be a chance for a public, transparent process.

“We might need a town hall meeting or a special work session,” she said. “But I think we should get public input.”

When the public is invited to speak about recreational use of marijuana, Stark will be ready to defend the practice.

“This is a billion-dollar industry,” he said. “It has potential for revenue, for jobs. My business is in full compliance with the will of the voters. I am prepared to fight for it. They can take me away in handcuffs, and I’ll go. I’m ready for the battle.”

State leaves much uncertainty regarding retail regulations

While the General Assembly set the framework for retail marijuana sales, municipalities and businesses are left struggling to fill in the blanks.

Colorado’s Legislature passed laws concerning recreational marijuana use and recommended a tax rate to be decided by voters in November. But nothing defines public consumption of marijuana. Can people use products in public that don’t create smoke? What about marijuana social clubs? Is a car considered private space? What about a nightclub’s backroom?

Under Amendment 64, every adult 21 and older can grow six plants in a locked, closed space. Does it have to be a private residence? Can a business allow people to grow their six plants indoors?

Other business questions are left unanswered. Will there be a banking system? Who will enforce federal trademark laws? Can cities set up zoning codes for personal plants? Do municipalities have any jurisdiction over square footage? Can they tax personal grows?

All those questions will be answered with time, said Mike Elliott, executive director of the Medical Marijuana Industry Group and a member of the task force appointed by Gov. John Hickenlooper to make recommendations to the General Assembly.

The laws set up the Department of Revenue as the regulatory agency for marijuana businesses, medical and recreational. The department has until July 1 to come up with new regulations.

“They’ll develop the structure of how the law will be interpreted,” Elliott said. “There’s a lot of authority to create the rules, to flesh out the issues around security, video monitoring, seed tracking. They’ve done a lot of that already, so it’ll just be copying and pasting what they do for medical marijuana.”

But those opposed to retail recreational sales say the state hasn’t done a good job of regulating medical marijuana. A recent audit showed the department lacked adequate staffing to fully conduct background checks on potential dispensary owners, and its vaunted “seed to sale” tracking system doesn’t exist.

Part of the problem is money, which could be solved when voters decide whether to pass a 15 percent excise tax on the first sale of marijuana, a tax on wholesalers. The state recommended a special sales tax of 10 percent on top of local sales taxes. If those two pass, there should be enough money to regulate marijuana sales.

But what if voters say no?

“Then we’re going to have a robust regulatory system with no way to enforce it,” said Kyle Sauer, a lawyer in the Colorado Springs city attorney’s office.

But Elliott isn’t worried.

“So much of the work has already been done,” he said. “The new bills just allow the state to go just a little further. It really isn’t as complicated as it sounds. “

Having no caps on production worries some community leaders, who fear too much marijuana could lead to under-age, black-market sales. There’s also concern about a negative impact on economic development.

“Adult bookstores are small businesses too,” said Mayor Steve Bach. “But I don’t think we want a lot of those in the city. That’s the way I’m leaning. I’m told by defense contractors, and primary employers of all types, that they’re very concerned about this matter.”

Elliott believes that the concerns about companies fleeing the state are overblown.

“Colorado is being responsible in regulating the sale of marijuana,” he said. “We’re going to sell it in a safe, controlled, responsible manner.”

Bach isn’t so sure.

“Recreational marijuana is not only a public-safety issue of great concern to the city — the police chief can verify that for you,” he said. “It’s an economic development issue as well.”

New state marijuana laws

  • Create a 15 percent wholesale excise tax.
  • Create a 10 percent special sales tax, in addition to the 2.9 percent tax and any local sales tax.
  • Local governments with retail marijuana stores will receive 15 percent of taxes collected by the state.
  • Existing medical marijuana centers have a nine-month head start. They can apply for a license starting in October. The first stores will open in January 2014.
  • Colorado residents can buy 1 ounce of marijuana. Tourists are limited to a quarter-ounce.
  • Products will be sold in child-resistant packages, with clear labeling about potency levels. Edibles will have serving-size limits.
  • Marijuana is part of the indoor smoking ban, and no marijuana will be allowed in businesses that allow tobacco smoking like cigar bars or hookah lounges.

3 Responses to Marijuana: constant battle for acceptance

  1. A legal substance requires a legal channel to produce and distribute it. If liquor stores were banned, people would be making beer and wine at home and distributing it in the streets. That used to be called prohibition.

    We’ve developed the best regulatory framework in the world and our city would be ignorant to undermine the will of voters, the work of the legislature, and forfeit the economy of cannabis commerce and economic benefit. Why should we turn millions over to cartels running criminal enterprises over Coloradans running small businesses.

    Studio A64 has the right message about the freedom of people to assemble and have a safe place to exercise their rights. Let’s put facts before fear and policy before prejudice as we re-write history on prohibition.

    Mark Slaugh
    May 17, 2013 at 11:26 am

  2. I recommend the city council ban marijuana permanently in all areas under their jurisdiction. I DO NOT want my family living in a city that permits the use of this dangerous drug. Many of my friends who were regular pot users are no longer with us, or severely damaged their careers, lost their family or friends, impaired their mental acuity, or otherwise were hurt from their impaired ability to operate machinery. I also note it is still a federal crime and our local law enforcement should enforce federal laws.

    Stan VanderWerf
    May 17, 2013 at 8:50 pm

  3. @Stan VanderWef: I’ll let you disregard inconvenient science & studies with larger sample sizes than just the burnouts you’ve known, & instead focus on one glaring error in your thinking: State & local law enforcement CANNOT enforce federal laws (what the US Supreme Court has termed the “anti-commandeering principle”). If the feds want to enforce federal law, they have to send in their own people.

    Robert Oppenheimer
    May 18, 2013 at 6:40 pm