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In fighting COVID-19, Colorado’s emergency rules affect medical cannabis differently than recreational

Updated March 27, 2020

During this ongoing response to the COVID-19 public health crisis, cannabis dispensaries nationwide are changing how they do business, and Colorado’s dispensaries are no different.

On March 20th the Marijuana Enforcement Division (the “MED”) implemented emergency rules to help Colorado cannabis dispensaries meet high demand while limiting customer time in the stores. But those rules revealed an important difference in how medical cannabis and recreational cannabis are viewed, and especially during stringent, shelter-in-place pandemic responses that decide what is and is not “essential” to our daily lives.

When the MED’s new dispensary rules were issued March 20th in response to executive action by Gov. Jared Polis, the overarching goal of the emergency response was to institute a higher level of social distancing at Colorado dispensaries.

An important part of accomplishing this allows cannabis customers to pre-order online or by phone and then pick up their cannabis curbside, something allowed for the first time in the state. (Colorado is on track to eventually allow medical cannabis deliveries this year, but the state will not allow recreational cannabis deliveries until 2021). It also is a measure that’s viewed as crucial to helping enforce the physical distancing of people needed to slow the spread of COVID-19.

Importantly, the emergency rules allow customers to pay curbside too – but only if they are medical patients. Customers at recreational cannabis dispensaries can’t pay at the curbside and, instead, payment has to be conducted inside the dispensary or online.

The dichotomy between medical and recreational cannabis was further and especially evident on March 23rd when the city of Denver issued its shelter-in-place edict and originally ordered both liquor stores and recreational cannabis dispensaries closed in 24 hours. But within hours of the order being made, long lines of people formed at both kinds of businesses throughout the city, prompting Denver to backpedal and allow both to remain open if they practiced social-distancing principles.

The differences between medical-cannabis rules and those affecting recreational cannabis aren’t exclusive to Colorado, either. In Illinois, the variances for allowed cannabis sales in that state – one under an expansive shelter-in-place mandate – also only apply to medical-cannabis dispensaries, not the state’s adult-use providers. In California and New York, two other states under orders for mass confinement, medical cannabis also is seen as an “essential” service in ways in which those states’ adult-use markets are not.

As hard as it may be for the industry to admit, these kinds of new emergency rules may be the norm for a growing number of states and municipalities in days ahead as stay-at-home orders rise.

For now, Colorado’s dispensaries – and this includes all their staff – need to fully understand the ways the emergency orders and rules can affect their sales to customers, keeping in mind that what might be newly allowed for medical cannabis might be substantially different for recreational cannabis. Understanding these differences will keep companies compliant, of course, but they can also dispel any uncertainties that might prevent sales. That’s a reality now as many dispensary owners are, like all of us, wrapped up in daily survival in a new kind of norm.

As the head cannabis practice attorney for Fortis Law Partners, I always have advised my clients to follow these compliance subjects in detail through subscribing to MED digital updates. In these uncertain days, they and other cannabis industry stakeholders also should check the MED website consistently, too, in case updates come. Of course, it’s important to communicate with legal teams, too, for counsel on the risks and obligations faced.

All of this might seem laborious in these days of both financial and epidemiological uncertainty. But not understanding the intricacies of the emergency orders could lead some stores to prematurely close and lose sales or, perhaps more financially devastating, run afoul of compliance and face even costlier fines.

It’s far too early to speculate if these temporary emergency actions affecting dispensaries will lead to long-term changes in Colorado once the response to coronavirus wanes. But if some of these measures work well, it will be harder to argue against them not being reimplemented later. And what will be interesting to note is if any potential changes would affect both medical and recreational cannabis the same.

 

 

 

 

Alyson Jaen

Alyson Jaen

As the head cannabis practice attorney for Fortis Law Partners, Alyson Jaen specializes in cannabis law, licensing and regulatory compliance as well as general corporate and business law. Alyson advises clients on cannabis licensing and regulatory compliance matters, including representation before the Colorado Marijuana Enforcement Division, the Denver Department of Excise and Licenses, and other local regulatory agencies. Alyson is committed to compliance and is an expert in many different aspects of the legal cannabis market. Prior to joining Fortis, Jaen worked at a Denver law firm where she provided legal counsel for operating businesses, and advised public and private companies regarding federal enforcement risks in legal cannabis markets. She previously assisted in more than $1 billion of transactions for the cannabis industry, including performing due diligence with new acquisitions.

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