Colorado lawmakers may let pot growers and sellers operate separately

Colorado lawmakers stood the state’s current model for marijuana businesses on its head Monday, endorsing a proposal that would allow recreational pot stores and commercial growers to operate independently.

Currently, medical-marijuana businesses in Colorado are vertically integrated, meaning growers and sellers are part of the same company and the stores grow most of what they sell. But, on Monday at the final meeting of a legislative committee writing a bill for recreational marijuana rules, lawmakers backed a proposed model where growers and sellers would be separate. They also shrunk what had been a one-year window where only medical-marijuana businesses could apply for recreational pot shop licenses down to three months.

The result is — potentially, since the full legislature must still endorse the proposals — a radical change to the economics of the cannabis industry in Colorado. And it didn’t come without criticism, including from lawmakers on the committee who felt they were given little notice of the proposal to study it carefully.

“This was just given to us,” Sen. Cheri Jahn, D-Wheat Ridge, said at the meeting. “We’ve had no chance to look at it.”

But Rep. Dan Pabon, a Denver Democrat who chaired the special marijuana committee and proposed the change, said the general issue had been thoroughly debated.

“There is not consensus on this by any means,” he said.

The change was supported by many small medical-marijuana business owners, who say that decoupling the two sides of the industry allows people to focus on what they’re best at.

“Vertical integration works for some, but for the majority it has not been a success,” said Jason Warf, the director of the Colorado Springs Medical Cannabis Council.

But the change also benefits big-money interests currently not involved in the medical-marijuana industry who, under the old proposal, would have been on the sidelines of the recreational marijuana boom for a year.

A number of large medical-marijuana dispensary owners argued to keep vertical integration because, they said, it allows the state to keep tighter control on the marijuana being produced. Mike Elliott, the executive director of the Medical Marijuana Industry Group, said the state must show it can keep pot from leaking out of the commercial system if it wants to keep the federal government from intervening.

“What we’ve shown is this current regulatory framework has worked,” Elliott said, “and switching it up is dangerous.”

The legislature has until the end of its session, May 8, to pass all its new policies on marijuana, which voters in November legalized in small amounts for people 21 and older.

John Ingold: 303-954-1068, jingold@denverpost.com or twitter.com/john_ingold