July 1 Compliance Deadline Approaching for Dispensaries in Colorado, but It’s Not Judgement Day

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After months and months of preparation, it’s almost here. Colorado medical pot dispensaries are bracing themselves for this Friday, when a host of new rules and regulations go into effect as the state looks to ensure it has a responsible, organized and well-regulated industry.

These aren’t just tweaks to the existing set of laws. Rather, they represent some major changes in how medical marijuana centers are supposed to operate in the state. We’re talking added security measures, new laws for tracking inventory, changes in investment and ownership rules and a host of other compliance measures that have literally sunk some dispensaries and put others on the brink of failure.

Here’s a link to a detailed rundown of what’s changing (click on the “Adopted Rules” link).

Given the depth of these changes, conventional wisdom says that July 1 will a big day for the industry. But that’s not necessarily the case. While it does mark the start of a new era for the state’s fledgling medical marijuana sector, I wouldn’t tie as much to the July 1 date as some do.

Technically, Friday is the date when all these new rules become law; however, it’s not like everyone who fails to meet the new compliance measures is going to be shut down overnight and the industry will consolidate over the next week. Don’t think of it as Judgement Day.

For one, the state still has a host of details that it needs to clarify, making it impossible for any dispensary to be in full compliance at this time. Secondly, the state’s enforcement division wants to see that individual dispensaries are at least moving in the right direction and trying to become compliant in some of these areas.

The Colorado Department of Revenue’s Medical Marijuana Enforcement Division isn’t even ready for all the changes. It hasn’t, for instance, certified or issued requirements for point of sale systems. It also has asked applicants looking for employee and vendor occupational licenses to wait until after July 5 to apply because it is too swamped, saying that it won’t penalize businesses until they have “had a reasonable amount of time to have obtained their licenses,” according to a memo the department issued.

And that’s just for dispensaries in Denver. The enforcement agency hasn’t yet set up regional offices in areas like Fort Collins to monitor compliance, meaning those businesses theoretically have even more time to get their butts in gear.

To be sure, July 1 is a very important date in the annals of Colorado’s medical marijuana sector. Dispensaries will now be subject to penalties or a state-order closure if they’re not working toward compliance, and many industry insiders expect to see mergers, acquisitions and closures as a result. Just don’t expect the industry to contract overnight.