MED Issues Statement of Position Regarding Retail Sales Transaction Limits

MED Issues Statement of Position Regarding Retail Sales Transaction Limits


Author: Jeffrey R. Wilson, Esq.

The Colorado Marijuana Enforcement Division (“MED”) recently issued its first position statement of 2017. The MED may issue a position statement when it receives a written request for clarification about the specific applicability of the Colorado Retail and Medical Marijuana Codes, or the rules promulgated thereunder. The MED has discretion to determine whether or not to answer a request, and position statements may be adopted and published by the MED as binding on the entire industry.

This most recent position statement, addresses the single sales transaction limit contained in Rule 402(C), which states that a retail marijuana store cannot sell more than 1 oz. of marijuana or its equivalent to a customer during a “single sales transaction.” Such language begs the question of what exactly is a “single sales transaction.”

Unfortunately the MED’s position statement does not offer much clarity. The MED states it will take action against businesses who attempt to “circumvent” the sales limitation, but concludes that circumvention can only be determined on a case-by-case basis. Colorado law prohibits adults from possessing more than 1 oz. of marijuana (excepting holders of valid medical marijuana cards), so a retail store that sells to an individual that it knew or should have known would be over his or her personal possession limit has likely committed a violation.

Accordingly, the conservative practice for a retail store to ensure compliance is not to sell more than a total of 1 oz. of marijuana (or its equivalent in concentrates or edibles) to a single person in a single day, regardless of the number of transactions involved. But some wiggle room remains. If a person held an otherwise lawful event where enough cannabis was consumed to require multiple purchases collectively totaling more than than 1 oz. over the course of the same day, such sales would presumably not violate the rules. On the other hand, making a daily maximum or near-maximum sale to the same person over many consecutive days may rise to the level of a violation, especially if the store had reason to believe the purchaser was reselling unlawfully. Given this lack of certainty, retail stores need to exercise sound judgment. The MED has a history of punishing businesses that sold maximum or near-maximum amounts to the same individual within very narrow timeframes.

Altogether, this most recent position statement highlights the limitations of the position statement mechanism in general. While position statements can aid in determining compliance, they often do not actually clarify the discrepancies they address. Worse yet, a position statement may create a binding interpretation that is contrary to the requestor’s desires, when in the absence of such interpretation the law may have allowed for multiple legitimate interpretations. Given these concerns, it appears that fewer position statement requests are being submitted than in years’ past.