As referenced in last week’s In the Weeds newsletter, on June 29, 2023, the State Licensing Authority adopted emergency rules which amend application and license fees effective July 1, 2023. The amended and new fees generally increased by approximately 8%, with four primary exceptions:
- Exception 1: Approved Social Equity licensees are eligible for a reduction on select licenses and permits for the initial fee and first renewal fee.
- Exception 2: Employee license fees have increased from $105 to $150.
- Exception 3: Complexity
- Certain highly-complex entities will have higher fees than entities which are not highly complex. For example: publicly traded corporations, qualified private funds, and trusts.
- Levels – There are new levels of fees related to ownership structures to match the complexity and increased workload that accompanies more complex ownership structures.
- Exception 4: One new fee – Reduced Testing Allowance.
Additionally, on June 29, 2023 the State Licensing Authority filed a Notice of Permanent Rulemaking Hearing which kicks off the permanent rulemaking process to make amended and new fees permanent, which will include opportunities for stakeholders to provide additional feedback.
Background:
The Division’s operations are primarily fee funded and fees collected by the State Licensing Authority are transmitted to the Marijuana Cash Fund established in section 44-10-801(1)(a), C.R.S. Further, section 44-10-801, C.R.S., requires that the amount of fees collected reflect the actual direct and indirect costs of the State Licensing Authority in the administration of the Colorado Marijuana Code, at sections 44-10-101, C.R.S., et seq. and that the State Licensing Authority review fees at least annually, and if necessary, adjust fees to reflect the direct and indirect costs.
In 2019, the Division engaged a third party to analyze fees and to align with section 44-10-801, C.R.S., including initiating a fee rulemaking. In 2020, the Division terminated fee rulemaking to ensure the Division had the resources necessary to conduct pandemic related emergency rulemaking to support licensees’ compliance with public health orders. In 2021, the Division restored license fees that had been reduced in 2016, which included the issuance of a cost-benefit analysis. This cost-benefit analysis informed the reinstatement of fees as part of incremental efforts to proactively respond to a $3.5 million projected shortfall between fiscal years 2021-2022.
Although the Division has (and continues to) engage in efficiency measures and has identified opportunities to reduce expenditures, the Division faces a negative cash fund balance at the end of the 2022-2023 fiscal year.
On June 5, 2023, the State Licensing Authority hosted a stakeholder meeting to discuss the Emergency Rules and proposed permanent rules to adjust application and licensing fees. The State Licensing Authority also initiated the permanent rulemaking process pursuant to the Colorado Administrative Procedure Act, section 24-4-103, C.R.S., on June 29, 2023 by filing the Notice of Permanent Rulemaking Hearing with the Secretary of State. As part of that permanent rulemaking process, the Division and State Licensing Authority will facilitate an additional stakeholder work group meeting and the permanent rulemaking hearing to solicit and gather public comment, which will be part of the permanent rulemaking record.
Additional Opportunities for Stakeholder Feedback:
Recognizing impacts on applicants and licensees, the Division values opportunities for stakeholder engagement, collaboration, and feedback. The Division is proud of and remains dedicated to collaborative approaches to its rulemaking and other initiatives. And as the Division prepares for its annual summer rulemaking session, we look forward to offering many opportunities for engagement to ensure permanent rule recommendations and process updates are informed by stakeholder feedback and dialogue.
Please submit any written comments on the amended and new fees using this form. Additionally, MED will host a second stakeholder meeting to solicit feedback and answer questions on Monday, July 31, 2023 from 1:00 – 3:00 pm at the Department of Revenue building at 1707 Cole Blvd., Ste. 300, Lakewood, CO 80401 in the Red Rocks Conference room. MED encourages all stakeholders who are able to attend in person, and those who are not able to can join virtually using the following Zoom information:
Topic: MED Fee Rulemaking Stakeholder Meeting
Join Zoom Meeting: https://us02web.zoom.us/j/
Meeting ID: 854 9345 0957
Additional information regarding the Division’s permanent rulemaking session can be accessed on the Division’s website.
Regards,
The Marijuana Enforcement Division
Sean Hocking
Source link