Fed action doesn’t change Council on pot

MarijuanaNew guidelines from the federal government haven’t moved Colorado Springs City Council from its original stance to ban retail sales of marijuana inside the city limits.

At least, not yet.

“Nothing’s ever totally dead,” said Councilor Val Snider, who ended up being the swing vote in a 5-4 decision for banning marijuana earlier this year. “You know that. I want to wait and see how other municipalities handle it. But I’m not going to put a timeline on when I think we should look at it again.”

Councilor Joel Miller didn’t equivocate: Federal law hasn’t changed.

“To me, the system’s in place. Federal law trumps state law,” Miller said. “There’s a way to change federal law and they haven’t done that. They’ve just changed regulations. In my mind, the administration can’t pick and choose which laws to enforce and which ones to ignore.”

The Aug. 29 memorandum says that the Justice Department’s goals are to prevent the distribution of marijuana to minors; prevent revenue from marijuana sales going to criminals; prevent the diversion of marijuana from states where it’s legal to states where it isn’t; prevent state-authorized marijuana activity from being used as a cover to traffic other illicit drugs; and to prevent drugged driving and other “adverse public health consequences.”

While those priorities remain, the Justice Department says that states that already have legalized marijuana must have a robust regulatory framework in place — and as long as they do, the federal government won’t intervene.

In fact, federal officials hope the regulatory process in Colorado could actually reduce the need for federal intervention.

“… A robust system may affirmatively address those priorities by, for example, implementing effective measures to prevent diversion of marijuana outside of the regulated system and to other states, prohibiting access to marijuana by minors and replacing an illicit marijuana trade that funds criminal enterprises with a tightly regulated market in which revenue is tracked and accounted for,” the memo said. “In those circumstances … enforcement of state law by state and local law enforcement and regulatory bodies should remain the primary means of addressing marijuana-related activity.”

Some see progress

While retail sales won’t start in January in Colorado Springs as they will in other jurisdictions like Pueblo County and Denver, local medical marijuana retailers have two points to celebrate from federal statements in recent months. First, the threat of federal prosecution has been removed, and second, there could be a banking solution soon.

Currently, no bank or credit union can take money from a marijuana business without running afoul of federal money-laundering laws. And that means that marijuana businesses — even the existing medical-marijuana dispensaries in Colorado Springs — are largely cash-only operations. They can’t even hire armored cars to move the cash from their businesses. Many say that it makes the dispensaries a magnet for crime.

And while a solution isn’t yet in the offing, it’s a step in the right direction, marijuana advocates say.

“For the first time in modern history, members of the U.S. Congress and the Justice Department were not discussing furthering cannabis prohibition, but instead were testifying to the merits of cannabis legalization and regulation,” said Erik Altieri, communications director for marijuana legalization group NORML.

U.S. Rep. Jared Polis, D-Boulder, has sponsored and introduced legislation to give legitimacy to the marijuana industry. The Small Business Tax Equity Act will allow medical marijuana dispensaries to take the full range of business deductions on federal tax returns. Rep. Ron Paul, R-Texas, is also sponsoring the bill, which was introduced by Rep. Pete Stark of California.

“Our tax code undercuts legal medical marijuana dispensaries by preventing them from taking all the deductions allowed for other small businesses,” Stark said. “While unfair to these small business owners, the tax code also punishes the patients who rely on them for safe and reliable access to medical marijuana prescribed by a doctor.”

Legislation in the works

The Small Business Banking Improvement act, introduced by Polis, would ensure marijuana businesses that are state-certified have full access to banking services by amending the Bank Secrecy Act.

“When a small business, such as a medical marijuana dispensary, can’t access basic banking services they either have to become cash-only — and become targets of crime — or they’ll end up out of business,” Polis said. “In states that have legalized medical marijuana and for businesses that have been state-approved, it is simply wrong for the federal government to intrude and threaten banks that are involved in legal transactions.”

And Justice Department officials signaled this month that the government is working with banks to see if they can find ways to allow businesses to open accounts in the current regulatory framework.

But none of the original opponents to selling marijuana in Colorado Springs are swayed by the positive moves of the federal government.

“The federal response was the third reason down on my list of why I voted no,” said Councilor Don Knight. “The first was that we need to keep this away from children; legalizing it makes it more accessible. Secondly was the impact to the military. Even if it’s legal, the military still won’t legalize it. And finally, the issue was the federal response.”

Though this administration has said it won’t prosecute marijuana crimes in states that have legalized it, Knight said that wouldn’t carry enough weight.

“It actually concerns me,” he said. “There’s nothing that stops a future administration from deciding to go after marijuana businesses — then we’ve led these people down the wrong path. It needs to carry the weight of law. And there’s only one way to do that.”

Even proponents of retail sales don’t hold out hope that Colorado Springs will allow retail stores.

“I don’t see us re-addressing that any time soon,” said Councilor Jan Martin, who voted to regulate retail sales. “It’s just not going to happen. I wish it would, but I don’t see it happening.”