The Colorado Story Cook Consulting, LLC Matt D. Cook (303)

History of The Law –Constitutional Amendment –Statutory Provisions The Regulatory Scheme The Process – Why it Works

“History of the Law” Constitutional – Amendment 20 –Passed in the year 2000 –Caregiver – Patient relationships –Affirmative defenses Possession 6 plants per patient (5 patients) Possession of not more than 2 ounces No clarity – 100’s outlets Mass confusion Confidential Patient registry – Health

House Bill Statutory not Constitutional Medical Marijuana Code Retail For Profit Business Model –Centers (MMC), Grows (OPG), Infused Products (MIPS) –License unique to person/place Occupational licenses (owners, managers, employees, contractors, etc.)

History Continued Vertical Integration Model –MMC-OPG Identical Ownership May have more than 1 Garden –Plant Count/Patient Ratio 6 plants – 2 ounces per patient Ensures accountability Tracked from seed to sale –BioTrackTHC.Com Retail taxed sales from MMC – Patients –bud, tinctures, oils, edibles, clones

Wholesale Tier Manufacturers of Infused Products –Edibles, Tinctures, Oils MIPS may have garden/s (identical lic’d) Contracts with MMC – No retail sales 500 count Plant limit Max –Waiver available from MMED ALL retail sales – Retail Centers ONLY

Cash Fund Created Industry pays for 100% - regulation NO General Fund Dollars –No taxpayer dollars used Cash Fund (Need % Reserve) “Need” Total number of licensees 1-10 FTE to Licensee ratio Application fees

Application Fees MMC Patients- $7, MMC Patients- $12, MMC +500 Patients - $18, MIPS - $ OPC’S - $ Million Dollars

Regulatory Scheme The Framework Legislative Process – Best Practices Application Process (Approx. 35 pages) Business License Application –Medical Marijuana Center –Optional Premises Cultivation License –Infused Products Manufacturer

Key and Support Licenses Defined – (Background) Arrests – 10 years –Future arrests (10 days) Tax Returns – Two years –IRS Authorization for release of Information –Balance Sheets Schedules all notes, mortgages, assets, etc. Denial, Suspension, Revocation - Any Professional Licenses Residences – 5 years (2 years unless app. by 12/15/10 – 12/15/09 Employment History – From Age 18 Bank Statements 1 year (Individual & Joint) Credit Card Statements (Six months) Civil suits, any other lawsuits Government Obligations - Child Support Current

World Wide Web Law Enforcement Access CBI/DOR/CDPHE Workgroup CCIC Query Web Based Interface –Center validates Patient Checks System and Physically verifies ID Reconcile Plants to patients Primary Center? Other Center? No Constitutional Protection (Statutory) Allowed 6 Plants - 2 Ounces per patient –POS System requirements 1200 noon – Denver, C/Spgs, Pueblo???

Web Based Video System Access From Anywhere, Anytime Off Site DVR Back up Required –Records Requirements Entire Limited Access Area (Anywhere MMJ) –Visible Badge – Background Tax Determination –Pharmacy, Cashier cage – casino Track Seed - Plant - Patient (BioTrackTHC) 100% Accountability (All activity)

Rule Making Work Group Participants –Patients, MMC, OPG, MIPS, local-State Gov, Law Enforcement, Legal Profession, Health, Agriculture, Testing Lab’s, Public at Large. –Not always going to Agree. –Record – “Rational Basis” Must conduct a Public Hearing for all to testify AFTER Notice. (January 2011)

Rules Identified: Necessary for Control and Regulation Penalties (Fines - Up to $100,000) Duties of Officers SLA and local LLA Inspections, Investigations, Searches and Seizures Unfair Practices (below cost sales) I.D. Cards – Employee requirements

Rules Continued Security, lighting, video, Alarm Requirements and other minimum procedures for Internal Control as deemed necessary by the SLA to Administer and Enforce Laws Reporting Requirements Modifications of the Licensed Premises Storage, Warehouses, Transportation Sanitary Requirements

Rules Continued Acceptable ID’s used for purchases Records to be kept and availability of Licensing Procedures Reporting – Monthly Sales Taxes and access to information by Staff to Verify. Administrative Citations, Penalty schedule ANY OTHERS MATTERS AS NEEDED for the fair, comprehensive administration of law. May NOT Set Prices.

Rules Continued Unlawful Financial Assistance NOTHING shall be construed to LIMIT a Law Enforcement Agency’s Ability to Investigate Unlawful Activity at ANY Licensed Premises.

Final Requirements Coordination–Applicant–Local Authorities –Regional Basis Security systems, (Physical/video) POS systems, Records, Limited Access Areas Marked, Employees Approved -Badges, Questions Local Licensing Authorities –Statutory Compliance License Issuance