DENVER (AP) – A proposal to divert money from medical marijuana patients in Colorado has prompted a sharp outcry and accusations of fiscal mismanagement in the closing days of the state Legislature.

State lawmakers are considering using nearly $8 million from fees patients pay for medical marijuana cards to revive the cash-strapped Medical Marijuana Enforcement Division, which regulates pot growers and sellers.

At first glance the bill seems like a no-brainer. The state health department has millions in excess marijuana “red card” payments, and the state revenue department can’t afford marijuana inspectors and other staff to oversee the medical marijuana industry.

But the cash transfer bill has prompted accusations of fiscal mismanagement and worse. It also has uncovered a sharp divide among marijuana activists themselves.

Some medical marijuana patients have threatened to sue, saying that the $35 they pay each year for medical marijuana cards isn’t supposed to produce a profit for state government to raid.

In a letter to Colorado Attorney General John Suthers, prominent marijuana industry attorney Robert Corry said he’d file a class action lawsuit on behalf of patients to block the transfer. Corry wrote that marijuana registry money “cannot lawfully be used for any purpose other than to administer the registry on behalf of patients.”

Other marijuana activists disagree, saying the medical marijuana industry needs properly funded regulators. Earlier this year, the MMED had to shed nearly half its staff because it’s a cash-funded agency within the Department of Revenue and wasn’t bringing in enough licensing fees to cover staffing costs.

Michael Elliott, executive director of the Denver-based Medical Marijuana Industry Group, urged lawmakers Tuesday to make the transfer and revive the enforcement agency, which would boost public confidence that marijuana businesses are acting ethically.

“It really is the power of the state to make sure people that are a part of this program are doing things the best way,” Elliott said.

A sponsor of the measure pleaded for the transfer, saying pot shops are being unfairly hampered by inadequate enforcement.

“We are leaving the legitimate medical marijuana centers out there hanging in the breeze,” Rep. Beth McCann, D-Denver, said.

Corry insisted that the MMED “squandered” money from would-be marijuana industry licensees. He found agreement from senators who seldom find themselves on the same side of an argument – Democratic Sen. Joyce Foster, of Denver, and Republican Sen. Kevin Lundberg, of Berthoud.

“I knew this was exactly what was going to happen,” said Lundberg, who said he opposed high licensing fees to get the MMED started a couple years ago. Foster decried the slow pace of licensing and said she couldn’t vote to give the MMED more money.

“It feels so wrong right now,” Foster said.

The governor’s budget director, Henry Sobanet, made a rare visit to the Senate committee Tuesday to urge approval of the marijuana money transfer. He conceded that Colorado’s first-of-its-kind marijuana regulation has been slow going.

“The original plan didn’t go exactly as envisioned a couple of years ago,” Sobanet said.

The transfer measure passed the committee on a 5-3 vote. However, it has more steps to go, and its fate is far from certain in the closing hours of the state Legislature. If the House and Senate can’t agree on the measure by midnight Wednesday, it dies for the year.

LINK: House Bill 1358

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