Extensive Colorado Pot Rules Don't Prevent Crackdown

DENVER (AP) -- Colorado's booming medical marijuana industry is regulated like no other. Public officials boast of tracking, measuring and taxing pot from seed to sale, calling Colorado a model of how to bring order to a medical marijuana business often compared to the Wild West.

The controls were thought to protect Colorado's 700 or so medical marijuana dispensaries from a federal crackdown. It didn't work.

U.S. Attorney John Walsh in Denver sent letters this week to 23 dispensaries near schools telling them to shut down or else. The warnings are the strongest message to date that federal law enforcement won't tolerate commercial marijuana sales in Colorado.

"When the voters of Colorado passed the limited medical marijuana amendment in 2000, they could not have anticipated that their vote would be used to justify large marijuana stores located within blocks of our schools," Walsh wrote.

Sixteen states and Washington, D.C., allow medical marijuana. But unlike California, Washington and Montana, where federal officials have cracked down on state-sanctioned pot shops, Colorado has extensive state regulations spelling out every aspect of the industry.

Colorado mandates how marijuana can be grown, down to a list of banned pesticides. The state monitors dispensaries with live video feeds and requires dispensary employees to pass background checks and wear visible badges while working with the plants. Dispensaries must prove they grow most of the pot they sell, at approved grow facilities under their own licensing scheme.

Colorado has the nation's only regulations for how unsold pot should be disposed of and the only guidelines for marijuana labeling and the safe production of hash.

"We have worked really hard to have a transparent, unambiguous regulatory scheme," said Julie Postlethwait, spokeswoman for the Colorado Medical Marijuana Enforcement Division, part of the state Department of Revenue.

The regulations came from two laws passed by Colorado lawmakers to rein in the state's exploding pot industry. Walsh's letters surprised the crafters of the pot bills, but they insisted Colorado was right to wade in to the business.

"We're on the right track," said state Rep. Tom Massey, a Republican who sponsored the two main marijuana regulation bills. "It's something that's here to stay, and we better make sure it's properly regulated."

A Colorado congressman who has proposed federal changes to how marijuana is treated, Democratic Rep. Jared Polis, said the state is a model and that federal authorities should defer to the state regulations. The dispensaries targeted by Walsh fall within federal drug-free school zones, but they have state and local licenses.

"Colorado's tough system of medical marijuana regulation is the best way to keep drugs out of the hands of minors," Polis said in a statement after Walsh sent the letters.

A lawyer who represents dispensaries and helped write the state regulations, Rob Corry of Denver, was telling his clients who received letters not to panic. Corry pointed out that federal crackdown letters were sent to California dispensaries, too, but it's unclear what actions were taken by authorities against those that didn't close or move.

"This is a massive bluff on the part of the federal government," Corry said Thursday.

Not everyone in the marijuana business is so cavalier. One dispensary manager who anticipated a letter because of her shop's proximity to a school said she'd move rather than risk a federal-state showdown.

Samantha Beckmann said dispensaries like hers should be left alone because they were grandfathered in when state regulations started prohibiting medical marijuana businesses within 1,000 feet of schools.

State marijuana regulators said they've been up front with the businesses that exhaustive state regulations aren't a legal defense.

"The allowance of medical marijuana in state statute is in conflict with federal law," Postlethwait said.

By Kristen Wyatt, AP Writer (© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)