The State House voted 46-19 on Tuesday afternoon to approve House Bill 1284. The legislation requires dispensaries to be licensed and monitored throughout the state but also gives local communities the ability to ban them.
Individual caregivers would still be able to provide marijuana to up to five people wherever there's a ban.
Medical marijuana advocates argued it would restrict chronically ill Coloradans from having access to a Constitutionally-protected drug. Law enforcement officers had also criticized the measure as legitimizing dispensaries which they do not believe was the intent of Colorado voters last decade.
Supporters of the legislation say it will help bring order to an industry that has exploded in the state over the last two years.
"We're going to see about a 50 percent contraction in the number of dispensaries. They're going to become medical marijuana centers. They're going to look more like wellness centers not 7-Elevens with just jars of pot," Sen. Chris Romer (D-Denver) said.
The measure also regulates where dispensaries can be located (no closer than 1,000 feet from a school, much like liquor stores).
Lawyers opposed to the bill say they are ready to sue the state if the bill becomes law partly because of the provision allowing local bans. They also object to excluding non-Colorado residents from opening dispensaries and dispensary application fees which they say are excessive.
"The less wellness centers or dispensaries there are, the less convenient access patients have to medicine," Brian Vicente with Sensible Colorado said.
Regulators expect only about half of the existing 1,100 dispensaries in the state to be able to continue operating under the rules. Smaller dispensary owners have complained that high application fees could drive them out of business.
Under the bill, dispensary owners would have to undergo criminal background checks, and the state revenue department would check that their funding has no criminal ties, similar to conditions in the gaming industry. Dispensaries would also have to grow 70 percent of their marijuana, a provision aimed at keeping tabs on where the drug is being sold.
The bill would also keep the location of marijuana grows secret. Attorney General John Suthers objected to that provision along with some news outlets.
Some members of the House wanted to try to negotiate those parts out of the bill before the end of the session on Wednesday. Rep. Tom Massey, R-Poncha Springs, feared any last minute changes could unravel the proposed rules, negotiated with the help of dispensaries.
The revenue department says it will need 27 enforcement agents, auditors and administrators to enforce the regulations. Those positions would be paid for with $2 million in fees paid by dispensary owners, growers and makers of marijuana products.
Combined with another bill seeking to regulate the doctor-patient relationships, lawmakers feel they finally have a grasp on the issue.
"We believe it's in as good a place as it's going to be," Ritter said.
(KUSA-TV © 2010 Multimedia Holdings Corporation with The Associated Press)