Coronavirus and Cannabis: Colorado Regulatory Updates

By Charles Alovisetti, Jessica Scardina, Andrew Livingston, Jordan Wellington, Corey Cox, Justin Johnson, Matthew Bartling

Jun 26, 2020

This VS Insight is dedicated to updates regarding the coronavirus and cannabis in Colorado. For updates on other states or coronavirus-related issues, see our main post on the subject, "Coronavirus and Cannabis: Monitoring the Impact."

Cannabis regulations are in flux across the U.S. as officials at every level of government work to contain the new coronavirus (COVID-19). Vicente Sederberg is closely monitoring the situation, and we are communicating with regulators to understand how these local, state and federal responses may affect cannabis business operators, medical patients, and other cannabis consumers. We are committed to doing everything we can to keep our clients and the public updated as we learn of new developments, but please note this is an extremely fluid situation and there is a lot we do not know. This VS Insights post is for informational purposes only and not for the purpose of providing legal or tax advice. We strongly encourage you to contact an attorney if you are seeking advice regarding any specific legal or tax issue.


Latest Updates

June 26, 2020

  • The Marijuana Enforcement Division (MED) issued an Emergency Adoption Order and Emergency Rules on June 26 to maintain alignment with Gov. Polis's executive orders. The Emergency Rules address license renewals and provide another 30-day extension for license renewal deadlines. Licensees are encouraged to ensure timely submission to minimize processing delays, and the MED does not anticipate any further extensions of the license renewal deadlines.

June 5, 2020

  • The Marijuana Enforcement Division (MED) issued an Emergency Adoption Order and Emergency Rules to maintain alignment with Gov. Polis's executive orders and to maintain the MED's reinstatement rules while the Division prepares for the permanent rulemaking session. The Emergency Rules:

    • Reiterate that all Licensees must comply with public health and executive orders.

    • Clarify the deadline extensions for business licenses and that employee licenses are not capable of being submitted after the applicable deadline.

    • Address issues for license reinstatement.

    • Temporarily suspend fingerprinting requirements for renewals.

    • Specify how stores and centers can comply with social distancing guidelines and how to comply with accepting orders and payments.

    • Address accommodations for transferring testing samples. 

May 1, 2020

  • The Marijuana Enforcement Division (MED) issued an Emergency Adoption Order and Emergency Rules to maintain alignment with the governor's executive orders and CDPHE's public health orders. The rules are consistent with the MED’s previously adopted Emergency Rules. Per the MED, a summary of the Emergency Rules includes:

    • Public Health Orders and Executive Orders: The Emergency Rules require all Licensees to comply with applicable public health and executive orders.

    • Extension of Business and Owner License Renewal Deadlines: The Emergency Rules further extend the expiration date of Regulated Marijuana Business Licenses and Owner Licenses expiring between March 25, 2020 and May 23, 2020, providing additional time to submit renewal applications for such licenses.

    • Modifications of Premises: The Emergency Rules allow licensees to make temporary modifications to their Licensed Premises without being subject to application and approval requirements, if such modifications are for the purpose of accomplishing social distancing consistent with state-issued orders.

    • Limited Gaming Support and Key Licensees: The Emergency Rules provide a temporary allowance for persons holding a valid license issued by the Colorado Limited Gaming Commission to work in a Regulated Marijuana Business without an Employee License issued by the State Licensing Authority, subject to certain restrictions and requirements.

    • Emergency Suspension of Fingerprinting for Renewals: The Emergency Rules suspend renewal fingerprint requirements for existing Owner Licensees. Note this does not apply to new/initial applicants.

    • Social Distancing Measures: The Emergency Rules establish requirements for social distancing applicable to Regulated Marijuana Businesses and consistent with state-issued orders.

    • Medical Marijuana Stores and Retail Marijuana Stores: The Emergency Rules establish emergency allowances and restrictions for Medical and Retail Store transactions both inside and outside of the Restricted Access Area of the Licensed Premises to facilitate the implementation of social distancing measures consistent with state-issued orders.

    • Transfer of Samples for Testing: The Emergency Rules allow Samples of Regulated Marijuana for required testing to be transferred to a Medical or Retail Marijuana Testing Facility at a property that is immediately adjacent to the Licensed Premises and under the control of the Licensee (to facilitate the transfer of test samples in a manner consistent with social distancing guidelines).

April 30, 2020

  • Gov. Polis issued Executive Order D 2020-052, allowing retail marijuana stores to continue the online sale of retail marijuana and retail marijuana products through May 30. The allowance to conduct online sales was previously set to expire on April 30.

April 17, 2020

  • Gov. Jared Polis issued Executive Order D 2020-039, "Ordering Workers in Critical Businesses and Critical Government Functions to Wear Non-Medical Face Coverings."

    • The order, which is in effect through May 17, is applicable to regulated marijuana businesses where workers are in close proximity with one another and/or interact with the public.

    • Under the order, workers must wear a mask or non-medical cloth face covering that covers the nose and mouth while working, except when doing so would inhibit that individual’s health and wear gloves when in contact with customers or goods.

  • The Marijuana Enforcement Division (MED) sent an email encouraging stakeholders to visit HelpColoradoNow.org and make financial contributions, volunteer, and donate blood and/or equipment:

    • Contribute Financially: Make a donation to the Colorado COVID-19 Relief Fund.

    • Volunteer: Sign up to help organizations and individuals in need

    • Donate Blood: Schedule an appointment to donate at a location near you.

    • Donate Personal Protective Equipment: Please keep the bare minimum supply of PPE that you need to conduct essential functions, and contribute the remainder to Colorado's COVID19 response. If you have quantities of supplies to contribute, please donate them to: Iron Mountain, 3900 Nome St., Denver, CO 80239 (Point of contact: Tim Washington)

    • Donate Additional Large Equipment: If you have larger equipment, such as anesthesia machines, ventilators, or UV-C lighting equipment, please fill out this form.

  • The MED also sent an email Reminder for a Safe and Compliant 420.

    • The annual 420 reminder to the licensee community addressed the obligations and legal requirements to observe social distancing and contained a helpful 420 graphic outlining such requirements.

April 16, 2020

April 2, 2020

  • The Colorado Department of Revenue published Emergency Rule Adoption - Colorado Marijuana Rules Response to COVID-19 (1 CCR 212-3) and Emergency Adoption Order in Response to COVID-19, which incorporate amendments to the Colorado Marijuana Rules to alignment with the recent Industry-Wide Bulletin 20-04 published on March 30, 2020. In addition to incorporating changes from the Industry Bulletin, the emergency rules include several additional policies and clarifications.

    • Employees with a limited gaming support or key licenses, licensed by the Colorado Limited Gaming Commission are now permitted to temporarily work at a regulated marijuana establishments subject to certain restrictions and requirements.

    • Clarifies that Executive Order D 2020 015 extending the expiration date of certain licenses does not apply to employee licenses for regulated marijuana establishments.

    • Requires all medical and retail marijuana stores to maintain a clean and safe environment and follow social distancing guidelines. The includes limiting the number of people on the Licensed Premises and ensuring that people are always at least six feet apart.

    • Requires all medical and retail marijuana stores to limit the formation of lines outside the Licensed Premises. If preventing a line is not possible, the licensee must assign a staff member to monitor the line to ensure patients and consumers are always at least six feet apart and that the line does not block pedestrian traffic or neighboring businesses.

    • Clarifies that orders can be accepted by internet or phone but that orders may not otherwise be taken outside the Restricted Access Area of the Licensed Premises. Businesses cannot accept cash payments that occur outside the Restricted Access Area of the Licensed Premises.

March 30, 2020

  • The Marijuana Enforcement Division (MED) Issued INDUSTRY-WIDE BULLETIN: 20-04 RE: Updates to Guidance Regarding MED Response to COVID-19.

    • The Bulletin reiterates that medical and retail marijuana stores are considered critical businesses that may continue to operate in compliance with social distancing requirements.

    • Businesses such as cultivations, product manufacturers, testing facilities, and transporters are considered critical businesses and/or are authorized to engage in “Necessary Activities” subject to social distancing requirements.

    • Patients and consumers may order, purchase, and pick-up regulated marijuana on the licensed premises.

    • Patients and consumers may only pick-up and purchase pre-ordered regulated marijuana outside the licensed premises.

    • The MED clarifies a list of prohibited activities, which include conducting cash transactions outside the licensed premises.

    • The MED is accepting applications for medical delivery permits at this time. Prior to the issuance of a medical delivery permit, the applicant must establish that its proposed local jurisdiction allows delivery.

    • Retail delivery permit applications will not be accepted until January 2, 2021.

    • The Bulletin provides a helpful list of social distancing techniques and recommendations for marijuana stores.

March 25, 2020

  • Gov. Polis signed Executive Order D 2020 015, authorizing state agencies to issue emergency rules that extend the expiration date of certain licenses.

    • Directs the Executive Director of the Department of Revenue to extend the expiration date of specific cannabis licenses set to expire during the next 30 days and to waive penalties and interest that would otherwise accrue during the time period.

March 23, 2020

  • Denver Public Health and Environment issued an Executive Public Health Order that requires all individuals anywhere in the City and County of Denver to shelter in place with limited exceptions. 

    • The order includes licensed marijuana stores as essential businesses "so long as written Physical Distancing protocols are developed and strictly implemented to limit the number of people on the licensed premises at the same time."

    • Medical stores are deemed “essential businesses” under the order and are therefore unaffected.

March 22, 2020

  • Gov. Polis signed Executive Order D 2020 013, directing all of Colorado’s non-critical employers to reduce their in-person workforce to reduce the spread of COVID-19, effective March 24 through Friday April 10.

    • The executive order directs all employers to implement tele-work options to the greatest extent possible. If tele-work is not practical or possible, employers are encouraged to stagger work schedules to reduce the proximity of employees during work hours and to keep employees on payroll. This Executive Order does not apply to any employer that can certify that employees are no closer than six feet from one another during any part of their work hours.

    • The Executive Order treats hemp cultivation, manufacturing, and other critical hemp product supply chain operations as “critical infrastructure” that is exempt from the in-person workforce reduction. Certain hemp retail establishments, however, may be subject to the Order and must implement the in-person workforce reduction.
      • The state specifically designates the following as “critical Infrastructure”: “agriculture/farms…..food and plant cultivation including farming crops, livestock, food processing and manufacturing, animal feed and food products, rendering, commodity sales, and any other work critical to the operation of any component of the food supply chain….and any business that produces products critical or incidental to the processing, functioning, development, manufacture, or delivery of the above products.

  • In response to the Executive Order the Colorado Department of Revenue Marijuana Enforcement Division (MED) Issued INDUSTRY-WIDE BULLETIN: 20-03 RE: Guidance Regarding Emergency Rules in Response to COVID-19.

    • Effective March 24, Medical Marijuana Stores can offer both sales in the Licensed Premises and “curbside” pickup, but Retail Marijuana Stores can only effectuate sales through “curbside” pickup.

    • Both Medical and Retail Marijuana Stores may conduct online sales transactions for patient/customer pickup at the Medical or Retail Marijuana Store.

    • Local jurisdictions still maintain local control and may have rules or policies in place that are contrary to the general MED guidance. For example, please see additional guidance for the City and County of Denver.

    • The Industry-Wide Bulletin Includes a list of frequently asked questions which provide additional information on local approval, online and telephone transactions, payment options, curbside pickup, packaging requirements, facility modifications, and video surveillance requirements.

March 20, 2020

  • Gov. Jared Polis issued Executive Order D 2020 011, “Ordering the Temporary Suspension of Certain Regulatory Statutes Due to the Presence of COVID-19,” which provides further direction for cannabis establishment operations.

    • Suspends current laws requiring an in-person physical examination for the issuance of medical marijuana cards in order to protect the health of Colorado’s medical professionals.

    • Suspends the current prohibition on retail marijuana store online sales to facilitate pickup by consumers 21 years of age and older in a manner consistent with social-distancing guidelines.

    • These two relevant directives last for thirty days and expire on April 18, 2020 unless further extended.

  • Shortly after Gov. Polis issued Executive Order D 2020 011, the Colorado Marijuana Enforcement Division (MED) published emergency rules, “Emergency Rule Adoption - Colorado Marijuana Rules Response to COVID-19," and a Statement of Emergency Justification and Adoption.

    • Public Heath Orders - All Licensees, their agents, and employees must comply with all applicable public health orders issued by the State of Colorado.

    • Modification of Premise – Requirements to apply for modification of premises and receive approval are temporarily suspended if changes to the licensed premises are made to effectuate social distancing measures. This exemption expires after 120 days or until applicable executive orders are rescinded, withdrawn, or expire.

    • Fingerprinting for Owners – Requirements to submit fingerprints for Owner Licenses are temporarily suspended. This exemption expires after 120 days or until applicable executive orders are rescinded, withdrawn, or expire.

    • Samples Transferred for Testing – A Licensee may utilize the property immediately adjacent to the licensed premises, under the Licensees control, for the transfer of samples required for testing. This exemption expires after 120 days or until applicable executive orders are rescinded, withdrawn, or expire.

    • Rule 3-345: Emergency Allowance for Online and Phone Ordering and Curbside Pick Up

      • This exemption expires after 120 days or until applicable executive orders are rescinded, withdrawn, or expire.

      • Medical Marijuana Stores may accept orders and complete sales transactions online or over the phone. Patients may pick up orders outside the Restricted Access Area as long as pick ups occur on the Licensed Premises.

      • Pursuant to the Governor’s Executive Order, Retail Marijuana Stores may accept orders and complete sales transactions online or over the phone. Consumers 21 years of age or older may pick up orders outside the Restricted Access Area as long as pick ups occur on the Licensed Premises.

      • To ensure “social distancing” the Licensed Premises of a Medical and Retail Marijuana Store now includes the property immediately adjacent to the Licensed Premises and under the control of the Licensee.

      • All electronic transactions taken on-line or over the phone must be entered into the Point of Sale System and Inventory Tracking System in accordance with existing regulations.

      • Proof of identification as well as relevant patient registry cards must be verified by the Licensee prior to finalizing a pickup order.

      • A Medical Marijuana Store or Retail Marijuana Store’s video surveillance system must enable the recording of the patient, caregiver, or consumer, as well as the individual’s vehicle for curbside pickup. Furthermore, the video system must record the Licensee verifying the patient’s, caregiver’s, or consumer’s identification.

      • For pick up orders, all regulated marijuana and regulated marijuana products must be packaged and labeled in accordance with existing regulations prior to leaving the Licensee’s Restricted Access Area.

  • Caution Regarding Compliance and Online and Phone Order and Curbside Pickup – These emergency regulations amend several important regulations affecting licensed business operations and create new rules for online ad phone ordering of medical and adult-use cannabis with curbside pickup. While these new potential avenues for sales are promising and much needed, it is important that all businesses review the requirements and create standard operating procedures that protect public health and safety prior to engaging in online sales or curbside pickup. We are actively engaged in conversations with state and local officials so that we can provide our clients with further clarity on the interplay between Executive Order D 2020 011 and the MED emergency rules. We encourage you to contact our attorneys and local regulators to ensure compliance with all state and local laws.

March 18, 2020

  • Starting March 18, 2020, the Marijuana Enforcement Division's offices will be closed to the public in order to comply with public health officials’ requests for social distancing. The MED provided guidance on how to continue licensing work in Colorado, and other than the changes included their guidance, it is business as usual for them. Time will tell if regulatory approvals slow down due to the extraordinary situation, though it wouldn't be surprising.

  • The Colorado Department of Public Health and Environment is mandating the closure of bars, restaurants, coffeehouses, gyms, movie theaters, cigar bars, and casinos. Food establishments are encouraged to operate by take-out, delivery, and drive through-only options. Medical and adult-use cannabis establishments have not been ordered to close, but businesses should be prepared for that possibility. While we were informed that Governor Jared Polis has no current plans to shut down cannabis operations, local governments could enact shelter-in-place orders, as has occurred in California. This is also something that could change quickly.

  • Hemp operators should know that the Colorado Department of Agriculture is working remotely until April 3, 2020, per their guidance. The division will continue providing phytosanitary inspection and certification service to customers, and they will evaluate conducting each inspection based on the potential level of exposure.

  • In abundance of caution and accordance with CDC recommendations to restrict gatherings of 50 or more people, the Denver Department of Excise and Licenses is indefinitely restricting in-person licensing to appointment only at the Excise and Licenses office. If you need to meet in-person with an Excise and Licenses representative, please schedule your appointment here. Additionally, all business license applications can be submitted via email to EXLSubmit@denvergov.org. With respect to payment of fees, when Excise and Licenses completes the application’s quality control review, you will receive instructions on how to remit payment. You will have an option to pay in cash in person, mail in a payment, or pay by phone. Please visit this link for more information about submitting an application via email.

  • Vicente Sederberg and other industry members and advocates have been in communication with regulators and other state government officials regarding a variety of issues, including the prospects for keeping facilities open, allowing curbside pickup, and other special considerations.

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