Amendment 64 Use and Regulation of Marijuana THE PEOPLE OF THE STATE OF COLORADO FIND AND DECLARE THAT  MARIJUANA SHOULD BE LEGAL FOR PERSONS TWENTY-ONE YEARS OF AGE 22 OR OLDER AND TAXED IN A MANNER SIMILAR TO ALCOHOL.  MARIJUANA SHOULD BE REGULATED IN A MANNER SIMILAR TO ALCOHOL (I) INDIVIDUALS WILL HAVE TO SHOW PROOF OF AGE BEFORE PURCHASING MARIJUANA; (II) SELLING, DISTRIBUTING, OR TRANSFERRING MARIJUANA TO MINORS AND OTHER INDIVIDUALS UNDER THE AGE OF TWENTY-ONE SHALL REMAIN ILLEGAL; (III) DRIVING UNDER THE INFLUENCE OF MARIJUANA SHALL REMAIN ILLEGAL; (IV) LEGITIMATE, TAXPAYING BUSINESS PEOPLE, AND NOT CRIMINAL ACTORS, WILL CONDUCT SALES OF MARIJUANA; AND (V) MARIJUANA SOLD IN THIS STATE WILL BE LABELED AND SUBJECT TO ADDITIONAL REGULATIONS TO ENSURE THAT CONSUMERS ARE INFORMED AND PROTECTED.

Different Categories of Retail Marijuana Flower – (Bud) Consumed by SMOKING

Different Categories of Retail Marijuana Edibles – Consumed by eating or drinking

Different Categories of Retail Marijuana Marijuana Product – Consumed by smoking, absorption through the mouth or skin

Different Categories of Retail Marijuana

Only Some Categories Must Have On Labels: Ingredients Refrigeration Serving Size Production Date Expiration Date Nutritional Fact Panel Instructions

All Categories Must Have On Labels: Universal Symbol Warning Statements: “There may be health risks associated with the consumption of this product.” “This product is intended for use by adults 21 years and older. Keep out of the reach of children.” “This product is unlawful outside the State of Colorado.” “This product contains marijuana.” OR “This product is infused with marijuana.” “This product was produced without regulatory oversight for health, safety, or efficacy.” “There may be additional health risks associated with the consumption of this product for women who are pregnant, breastfeeding, or planning on becoming pregnant.” “Do not drive a motor vehicle or operate heavy machinery while using marijuana.”

All Categories Must Have On Labels: License number of cultivator, processor, manufacture, and the store that sold the marijuana Harvest Batch Number or Production Batch Number Net weight, in grams to at least the tenth of a gram Date of sale to the consumer Test Results Complete list of all nonorganic pesticides, fungicides, and herbicides Complete list of solvents and chemicals

Concentrates – Waxes and Shatters

Grow – Pesticide Issues

The Law Pesticide Applicator’s Act Use - pesticides use and application must follow label -Site -Return Entry Interval (REI)

Environmental Protection Agency (EPA) Pesticide Labels – The labels must allow: 1.Use on unspecified crop and/or plants 2.Use at the intended site of application 3.Direction do not prohibit use on crops or plants intended for human consumption - Sets tolerances limiting pesticide residues in or on food -exempt from tolerance requirement, if there is no hazard to public health

Department of Agriculture (CDA) Developed unofficial list of pesticides from products that are exempt from tolerance requirements Does not recommend use of any pesticide not specifically tested, labeled and assigned set tolerance for use on marijuana - health effects on consumers is unknown *Currently no pesticides specifically labeled or have pesticide residue tolerances established for use on marijuana by EPA

Potency Testing

Banking In state of Colorado banks are authorized to work with the marijuana industry Banks chose not to work with anyone that works with the Cannabis Industry Believe that it will come in the next couple of years More states vote for medical marijuana Schedule two drug

How much sales tax revenue comes from Retail Marijuana $58 million All numbers are estimates, numbers will not be finalized until later this year. $38.3 million from Sales Tax $19.7 million from Excise Tax

Taxes – Paid By Consumers Denver Standard Sales Tax 3.65% Denver Special Sales Tax on Retail MJ 3.5% State Standard Sales Tax 2.9% State Special Sales Tax on Retail MJ 10% RTD Sales Tax 1% SCFD Sales Tax.1% Total Denver Marijuana Sales Tax 21.15%

Taxes – Paid By Retail Cultivators Excise Tax Bud (Flower, Sweet Leaf)15% of $2,100 a pound Trim (Trim, Shake, Fan Leaf, Sweet Leaf)15% of $364 a pound Issues: Market rate set is too high on bud/flower Definitions of product – sweet leaf Wet plants Other localities/jurisdictions have lower excise tax or zero excise tax

280 E Tax that was put in place to prevent illegal drug dealers from writing off their expenses Boats transporting drugs from Mexico to the United States Focused on the ‘act of selling’ federally illegal drugs Does not apply to functions such as: manufacturing, cultivating, securing the product (regardless of location) * Industry is fighting 280 E in the Supreme Court in California

Questions Insurance Training Who are our customers Medical patients Recreational patients Clubs – on premises / off premises Comingled alcohol and marijuana Security Inventory Tracking System Distribution system Barriers to entry

2014 – Fun Facts RETAIL 38,480 pounds flower sold 2.85 million units of edibles sold 359,000 units of non-edible marijuana products sold MEDICAL 109,520 pounds flower sold 1.96 million units of edibles sold 412,000 units of non-edible marijuana products sold

2014 – Fun Facts 321 total local jurisdictions in CO 67 allow medical and retail 228 prohibit medical and retail 21 only allow medical 5 only allow retail 1,416 medical business licensees 833 retail store licensees 15,992 occupational badges