How the Cannabis Industry Can Be a Leader

As many have come to realize, cannabis is one of the most challenging industries in which to operate a business. COVID-19 presents yet another challenge to the cannabis industry, but also an opportunity to show resilience in the face of crisis and be an example for the rest of the business community.

Dispensaries and several of the businesses that support them have been designated “critical business” by the Colorado Department of Public Health (CDPHE). While this means the industry will be under a compliance microscope, it also creates an opportunity to lead by example and be a respite for the public in these uncertain times.

This post summarizes the Colorado Marijuana Enforcement Division’s emergency rule adoption in response to COVID-19 and explains what cannabis companies must do to comply.

 

Are you allowed to continue operations?
Under CDPHE’s Public Health Order 20-24, dated March 22, 2020, issued pursuant to the governor’s Executive Order D 2020 013, critical businesses are exempted from the Public Health Order and encouraged to remain open.

Critical businesses include:

– Medical supplies and equipment manufacturers and providers, including durable medical equipment technicians and suppliers;

– Food and plant cultivation, including farming crops, food processing and manufacturing, commodity sales and any other work critical to the operation of any component of the food supply chain;

– Manufacturers of: food processing, manufacturing agents, including all food and beverages; chemicals; medical equipment, components used in any medical device, supplies or instruments; agriculture/farms; any business that produces products critical or incidental to the processing, functioning, development, manufacture, packaging, or delivery of any of the categories of products above;

– Marijuana dispensaries;

– Building cleaning and maintenance;

– Warehouse/distribution and fulfillment, including freight distributors;

– Storage for critical businesses;

– Newspapers, television, radio, and other media services;

– Financial institutions including bank and credit institutions, insurance, payroll and accounting services and services related to financial markets; and

– Construction.

 

Compliance with MED Emergency Regulations
As we’ve come to expect, the rules promulgated by the Marijuana Enforcement Division raise a few questions. However, the underlying concepts are clear enough that we can make reasonable judgments as to implementation.

 

Rule 3-345 (new): Emergency Allowance for Online and Phone Ordering and Curbside Pick-Up.

Rule 3-345 is a temporary new rule implemented to help effect social distancing measures. Under the new rule, both medical and retail marijuana stores (a) may accept orders, accept payment and complete the sales transaction over the internet, and (b) may offer curbside pick-up.

“Curbside pick-up” means outside the restricted access area, but on the licensed premises (which may be modified as provided in Rule 2-260(A)(1) discussed below).

Further requirements for curbside pick-up include:

– Confirming (a) the purchaser’s name and date of birth, (b) the desired pick-up time, and (c) for medical marijuana stores, the patient’s registration number and, for patients under 18, the parent or guardian designated as the primary caregiver and, if applicable, the primary caregiver’s registration number.

– Physically viewing and inspecting the purchaser’s ID and, if applicable, registry card.

– Video recording of (a) purchaser (and purchaser’s vehicle in the event of a curbside transfer), and (b) licensee verifying purchaser’s ID and completion of the transaction through transfer.

– Ensuring that all online or phone transactions are entered into the point of sale and inventory tracking systems.

– Compliance with all local regulations.

 

Rule 1-105(B): Executive Orders & Public Health Orders.

Under this temporary provision, all licensees, their agents and their employees shall comply with any applicable public health orders issued by the agencies of the state of Colorado, including the CDPHE.

This offers little guidance since most, if not all, licensees are considered critical businesses and may be exempt from public health orders. However, based on the Marijuana Enforcement Division’s Industry-Wide Bulletin 20-03, dated March 22, 2020, we are fairly certain that social distancing requirements and other health-safety related measures are to be implemented to the greatest extent possible while maintaining business operations. (See below for a list of recommendations to comply with health and safety measures while remaining open.)

 

Rule 2-260(A)(1): Emergency Exemption.

In order to effectuate social distancing measures, this temporary provision allows regulated marijuana businesses to make temporary modifications to their licensed premises without prior approval from the Marijuana Enforcement Division. Prior approval is only waived if the temporary modifications effectuate social distancing measures, namely curbside pick-up. As mentioned above, creativity will be required to both stay open for business and comply with all emergency orders and regulations. You may need to use areas that were not originally part of the licensed premises to carry out transactions.

 

Rule 2-265(H)(1)(d)(i): Emergency Suspension of Fingerprinting.

The requirement for owner licensee to submit fingerprints at least once every two years is suspended for a period of 120 days following the effective date of this rule (March 20, 2020), or if Executive Order D 2020 003 (Declaring a Disaster Emergency Due to the Presence of Coronavirus Disease 2019 in Colorado) is rescinded, withdrawn or expires prior to the end of the 120-day period.

 

Rule 3-605(B)(1)(a): Emergency Accommodation for Transfers of Samples for Testing.

For the same period set forth in Rule 2-265(H)(1)(d)(i) above, licensees may use a property adjacent to transfer samples of regulated marijuana.

 

Recommendations
The following is a short list of recommendations to help you comply with the emergency regulations.

Most of all, use common sense and do not try to bend the rules in a way that will draw attention to this industry. As we saw this past week in Denver, not everyone agrees that marijuana businesses are essential businesses (although the decision was quickly reversed).

– Ensure the health and safety of your employees first. Do not let them work if they show any signs of illness;

– Document any temporary modification to your licensed premises and operate within the modifications you made;

– Create procedures to ensure everyone in the store, including customers and staff, is able to and maintains a six-foot distance between themselves;

– Rules prohibiting the display of marijuana outside the restricted access area (specifically Marijuana Enforcement Division Rules 5-115 and 6-110) are still in effect. This is especially important if there will be a curbside transfer;

– Increase the number of times you clean and disinfect anything people touch;

– Ensure online or phone orders are scheduled in a way that will promote distancing and avoid crowds;

– Provide clear instructions for customers, both in-store and online;

– Consider requiring online ordering to control the number of people on the premises at any time;

– Educate your employees on these regulations and your plans to implement them;

– Curbside pick-up does not literally require transactions to take place on the curb. Internal modifications to the facility may be more appropriate and provide for greater safety and compliance with distancing requirements; and

– Do not let anyone in the store who is displaying signs of illness.

 

Dean Richardson and Ezra Kramer are attorneys with Denver-based law firm Moye White.

 

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