The below discussion is an analysis of the current legal environment related to the recent COVID-19 pandemic. This analysis highlights the ability of both medical and retail businesses to continue operating in light of several emergency orders from the State of Colorado and emergency rule changes from the Marijuana Enforcement Division (“MED”). This summary is not a legal opinion, but rather perspective and analysis on the current status of such emergency rules and orders. The content provided herein is subject to change as the laws and interpretation of such laws change.

STATE ANALYSIS

Below is a summary of the current status of Governor Polis’ Executive Orders, Colorado Department of Public Health’s (“CDPHE”) Public Health Orders (“PHO”), Emergency Rules, and MED Guidance (the “Releases”) updated as of March 30, 2020.  For ease of reference, at the end of this summary is a link to all applicable Releases.

OVERVIEW:

Under the Amended Colorado PHO dated March 25, 2020, Medical and Retail Marijuana Stores are specifically designated “Critical Businesses”, and Cultivations and Manufacturers are likely also considered Critical Businesses.  Each of these may continue operations so long as they are practicing Social Distancing Requirements and in compliance with all CDPHE guidance for maintaining a “clean and safe work environment.”[1]

Pursuant to the Executive Order issued by Governor Polis on March 25, 2020, all businesses other than those designated by the CDPHE (“non-critical businesses”) must temporarily cease operations other than the performance of Minimum Basic Operations. Minimum Basic Operations are those activities needed to protect assets and maintain personnel functions.[2]

MED has released Emergency Rules along with an updated Industry Bulletin dated March 30, 2020 to help provide additional guidance for Licensees. in contravention or superseding earlier guidance.

SPECIFICS:

Medical and Retail Stores

So long as Medical and Retail Marijuana Stores comply with Social Distancing Requirements, they may continue operations. However, there are several changes that you should be aware of:

  • Medical and Retail Marijuana Stores and dispensaries may conduct in-person purchases within the Restricted Access Areas, receive online and phone orders, expand their Licensed Premises to facilitate in person pick-ups, and offer “Curbside” services.[3]
  • Retail and medical marijuana stores may modify their Licensed Premises temporarily to facilitate social distancing including extending the Restricted Access Area into the lobby or waiting area of the premises.[4]
  • Curbside pick-up may occur outside of the Licensed Premises, only for orders that have been previously placed, and no orders may be placed outside the Licensed Premises.[5]
  • Payment for Curbside pickup can only be made by check, debit or credit card, and no cash may be exchanged outside the Licensed Premises.[6]
  • Curbside pickup should occur on the property immediately adjacent to the Licensed Premises and under the control of the Licensee (e.g. a private sidewalk or a parking lot under control of the Licensee).[7]
  • Licensees cannot provide Curbside services on any public property, such as a public street or sidewalk.[8]
  • Licensees providing these services are required to provide patients and customers with detailed instructions for online or phone orders and payment protocol, a description of the designated location for pick-up, and any other information required to ensure that pick-up occurs in an orderly and compliant manner.[9]
  • Licensees are responsible for limiting the formation of lines outside of the Licensed Premises, ensuring persons waiting maintain social distancing and do not block pedestrian traffic or entry/exit to any neighboring businesses.[10]
  • Licensees must also remain in full compliance with all state and local laws and regulations unless specifically stated otherwise. A Licensee may conduct sales as explained above so long as there is video surveillance which records (i) the Licensee verifying the identification, and if a patient, their medical card; (ii) the consumer, patient, or primary caregiver picking up the marijuana; and (iii) the vehicle (if marijuana is brought direct to the vehicle).[11]
  • Medical and Retail Marijuana Stores are encouraged to implement increased security measures in connection with these curbside transactions or any temporary modifications of the premises, including but not limited to, (x) the installation of security cameras, (y) the employment of security personnel, and (z) the addition of security lighting.

Cultivation and Manufacturing

While Medical and Retail Cultivations and Manufacturing facilities are not specifically stated as Critical Businesses in the PHO, Cultivations and Manufacturers likely are considered a “Critical Business” under such definition as “Critical Manufacturing” because they provide necessary support to medical and retail stores that are expressly considered Critical Businesses .[12]  To the extent the State or MED updates its guidance or disagrees with this position, Cultivations and Manufacturers would also qualify as performing “Necessary Activities”, as they are providing essential products and services for a Critical Business.[13]  In both instances, Cultivations and Manufacturers may continue operating so long as they are in strict compliance with Social Distancing Requirements and all CDPHE guidance for maintaining a clean and safe work environment.

Social Distancing Requirements

Social Distancing Requirements require marijuana businesses to maintain at least a six-foot distance from other individuals, in addition to requiring that all employees (i) wash their hands with soap and water for at least twenty seconds as frequently as possible or use hand sanitizer, (ii) coughs or sneezes (into the sleeve or elbow, not hands), (iii) regularly clean high-touch surfaces, and (iv) refrain from shaking hands with others. [14]

To further protect the public and ensure compliance with all Social Distancing Requirements the MED has provided the following recommendations for Licensees (“Social Distancing Considerations”): directing clients and customers to online or phone ordering, virtual waitlists/lines, implementing appointment scheduling, the limitation of the number of people on-site at any time, ensuring all individuals are 6 feet apart, limiting the amount of time patrons may spend on premises, modify the premises to provide additional space for patrons, or limiting lines outside the premises among other options.

Stay at Home Order

Effective Thursday, March 26, 2020, Executive Order 2020-17 requires all Coloradans to stay at home subject to limited exceptions including going to and from work at Critical Businesses or performing Necessary Activities.[15]  All businesses other than those qualified as “Critical Businesses”, must close temporarily other than for the performance of Necessary Activities or Minimum Basic Operations.[16]

Delivery

Delivery rules have not been changed and only those medical marijuana stores with a valid delivery permit may deliver medical marijuana to patients; the local jurisdiction in which the Medical Marijuana Store is located must allow for delivery.[17]

Contact Us

To learn more about the impact of COVID-19 outbreak on your cannabis businesses, please contact Meghan BrennanMegan Herr,  Steve Levine,  Alyssa Samuel or your Husch Blackwell attorney.  Husch Blackwell will continue to provide updates upon additional information. Husch Blackwell has launched a COVID-19 response team providing insight to businesses as they address challenges related to the coronavirus outbreak. The page contains programming and content to assist Colorado Marijuana Industry clients and other interested parties across multiple areas of operations, including labor and employment, retailing, and supply chain management, among others.

RELEASES

MED Emergency Rules – https://drive.google.com/file/d/1TJPjixRku7K8-IzuM3KsFfxNQ0wVflSx/view

MED Guidance – https://drive.google.com/file/d/143epybzBiHjTmVdsEeOICK3rFfU4lTbt/view

Executive Order 2020-11 – https://drive.google.com/file/d/1HXTMP8E5KF9ppvusW4kAJIIDQrdHckqQ/view

Executive Order 2020-13 – https://drive.google.com/file/d/1LQpL1oDurg4Iiasq_d6Cu_v2zM_0IMd3/view

Executive Order 2020-17 – https://drive.google.com/file/d/1O1EDCY6-A6QBKxzDImCSF8bBBdOOI3Km/view

Governor’s Press Release – https://www.colorado.gov/governor/news/gov-polis-colorado-leading-example-and-taking-action-address-covid-19

Amended CDPHE Public Health Order – https://drive.google.com/file/d/1IzfYUaxEf-UFSVAzkY_b9Cf1OMPOdlxH/view 

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[1] Amended Colorado PHO 3.25.2020 (III.C.); Executive Order 2020-17 (§ II(C)).

[2] Executive Order 2020-17 (§ II(C)).

[3] Emergency Rule 3-345; 2-260(A)(1).

[4] Industry Bulletin (20-04) and (20-03); Emergency Rule 2-260(A)(1).

[5] Industry Bulletin (20-04).

[6] Industry Bulletin (20-04); Emergency Rule 3-345(B).

[7] Industry Bulletin (20-04).

[8] Industry Bulletin (20-04).

[9] Industry Bulletin (20-04).

[10] Industry Bulletin (20-04).

[11] Emergency Rule 3-345(C)

[12] Amended Colorado PHO 3.25.2020 (III.C.)

[13] Amended Colorado PHO 3.25.2020 (III.A.4.).

[14] Amended Colorado PHO 3.25.2020 (III.F.).

[15] Executive Order 2020-17 (§ II(B)); Amended Colorado PHO 3.25.2020 (III.A.).

[16] Executive Order 2020-17 (§ II(C)); Amended Colorado PHO 3.25.2020 (I.F.).

[17] Industry Bulletin (20-04).