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8.24.18- Regulation Suggestion Change Form_Penalty Schedule- J. ThomsonName: Kate Thomson Title: Chief Operating Officer Company/Organization: Skinny Pineapple Inc dba. The Farm Date: 08/24/2018 Phone: 586-489-9633 Email: kthomson@thefarmco.com Mailing Address: 3100 Arapahoe Ave Suite #450 | Boulder CO 80303 Boulder Revised Code or City Manager Rule suggested amendment with Legal Citation/Chapter/Section: City Manager Rule --- Penalty Schedule Guidelines Suggested Wording for Change: The main concern with these Penalty Schedule Guidelines is not the language used, but the way it is interpreted and used by law enforcement and licensing. Discretion and assistance was meant to be used. Due Diligence and mitigating factors were to be considered. Unless it was a blatant violation (with little to no due diligence taken), the city would offer resources and assistance to the licensee to remedy the issue. This is not how it appears to be being used/reviewed for guidance. It seems that it is taken as regulation, when it is not. Please see the attachments for more specific information. Basic Justification for Suggested Change: Despite the fact that the MAP agreed to the draft of the Penalty Schedule based on 'discretion' and a long conversation about mitigation, the Penalty Schedule is treated as rule/law, black and white. Better language or direction needs to exist to allow for considering time passed, aggravating and mitigating factors, due diligence and overall business compliance. In an industry that is constantly evolving and changing, both businesses and law enforcement should collaborate to provide a safe space for our community. The 3 strikes and your out rule, with little to no regard for a statute of limitation, plus the fact that Liquor allows multiple offenses (and suspension, prior to revocation), the schedule should be adjusted and license revocation should be replaced with suspension, as it is in the Boulder Liquor guidelines. Examples of when the current Code or Rule has caused a problem (please provide real world examples): A Boulder Dispensary sold to an underage person (vertical ID) in August 2015. They paid a fine with City and State and made significant changes internally to ensure this wouldn’t happen again. Two and a half years later, without any other violations occurring on the premises and passing at least 4 compliance operations, this same dispensary sold to an underage person (Fake ID) in February 2018. This dispensary is known to provide tours and training for local and State staff and officials and are known for their commitment and adherence to compliance. Over the 2.5 years, this dispensary (1) spent hundreds of hours for ID training & creating ID Checking processes and (2) spent over $25,000 on ID classes, ID resources and ID training and (3) performed due diligence in checking the Fake ID used in the compliance operation. The Boulder Police Department Marijuana Enforcement Officer, City Marijuana Licensing Authority and City Attorney’s office seemed to view the violation with little consideration to the intent of the current Penalty Schedule regarding the time passed, limited resources available, confusing nature of the compliance operation, due diligence taken by staff, mitigating factors and efforts launched by the Boulder Dispensary. The City used the Penalty Schedule as more of a black and white law (with very little to no deviation), as opposed to it’s intended purpose, to be a guide for sentencing, to provide city staff and businesses with a framework to go off of. Explain how the change would affect/benefit the Industry: For businesses to be on a level playing field with other businesses and industries across the city and state. To use due diligence as it is defined - reasonable steps taken by a person in order to satisfy a legal requirement, especially in buying or selling something. Explain how the change would affect/benefit the City organization: Allow discretion to play a role in sentencing, as it does in other industries including law enforcement and sentencing practices. To provide a space where businesses want to operate, fairly and with consideration. Explain how the change would affect/benefit members of the Public who are not related to the marijuana industry or marijuana customers: Clarity and fairness to it’s local businesses creates a more stable and thriving community. To allow good actors that make significant efforts a chance to remain in the city to operate. To create a culture of learning between operators and law enforcement to keep our community safer. List any documents you have provided which support the proposed change: Document A: City of Boulder Penalty Schedule Guidelines (highlighted), Document B: Beverage Licensing Authority Violations and Penalty guidelines. Document C: The MAP Notes sections regarding the Penalty Guidelines from MAP meetings 7.7.2016 and 7.25.2016. Document D: City of Boulder Penalty Schedule Red-lined STANDARD (NON-EMERGENCY) RULE Rules 1 through 6 Regarding Medical and Recreational Marijuana Businesses 1.Penalty Schedule Gu idelines The following chart is adopted as the Guidelines for (a) the Marijuana Licensing Authority in recommending fines, suspension or revocation, and (b) the Municipal Court in quasi-judicial proceedings pursuant to Subsections 6-14- 14(c) and 6-16-14(c). City of Boulder Draft Marijuana License Penalty Schedule Guidelines -August 3, 2016 The following is the Penalty Schedule that is used for guidance by the Boulder Marijuana Licensing Authority when proposing penalties. This schedule includes the most frequently occurring violations, but it is not an all­ inclusive list of all possible violations of the Boulder Marijuana Codes. The city Marijuana Enforcement team members are always available to answer questions beforehand about compliance from Boulder Marijuana businesses to ensure that their business operations remain compliant with our local law. Additionally, the City of Boulder offers MJ sales and service training for stores, key-holder training about city inspection requirements and enforcement trends, and MJ city tax requirement trainings so that Boulder Marijuana businesses can acquaint themselves with local laws and operating requirements. Notices for these city trainings will be posted on the City of Boulder licensing office website. Actual penalties may vary depending on a variety of factors such as mitigating or aggravating circumstances, efforts of business to correct the violation, or time between violations. Boulder marijuana businesses have a right of appeal for fine, suspension, and revocation recommended penalties, and if an appeal is timely filed a quasi­ judicial hearing before a city municipal court judge will be held. Qg1C1iigai1l lafCilSiiiga1 First Second Third Fourth Fifth Offense Offense Offense Offense Offense Unsealed MJ possession by $1,000 $2,500 $3,000 $5,000 Revocation employees at licensed premise fine fine fine fine or acceptance of samples by employees MJ product or plants not $1,000 $2,500 $3,000 $5,000 Revocation properly packaged for fine fine fine fine removal/transport or MIP products not properly labeled Unapproved goods sold at $1,000 $2,500 $3,000 $5,000 Revocation licensed premise fine fine fine fine ID scanner not utilized and/or $1,000 $2,500 $3,000 $5,000 Revocation failure to properly verify ID for fine fine fine fine det ermination of age Refusing to remove key-holder $1,000 $2,500 $3,000 $5,000 Revocation from management when fine fine fine fine background is unapproved by city Failure to obstruct view MJ of $1,000 $2,500 $3,000 $5,000 Revocation sales or storage of MJ from fine fine fine fine public view Page 3 of 23 Document A: City of Boulder Penalty Schedule Guidelines Page 4 of 23 Document A: City of Boulder Penalty Schedule Guidelines STANDARD (NON-EMERGENCY) RULE t:llillib, §illlW IDd §1,uciw First Second Third Fourth llli2li1il1201 Offense Offense Offense Offense Use of unapproved locking $3,000fine $4,000fine $5,000fine Revocation storage that does not qualify as a safe Not making disposed of MJ $3,000fine $4,000fine $5,000fine Revocation unusable and unrecognizable and not locking dumpsters Not locking product or receipts $3,500fine $5,000fine Revocation in a safe for overnight storage MJ or MJ product outside of a $3,500fine $5,000fine Revocation licensed premise Making a permanent $3,500fine $5,000fine Revocation modification of the licensed premises without prior city approval On-premise consumption by $3,500fine $5,000fine Revocation employees, managers or owners Video unavailable, cameras not $3,500fine $5,000fine Revocation wor king, or 40 days videq off- site storage copy unavailable A person under the age of 21 in $3,500fine $5,000fine Revocation the licensed premises of a recreational marijuana business Sale of MJ or MJ product to a $4,000fine $5,000fine Revocation person under 21 years of age Except for blatant violations irduding but not limited to selling to minors, it is the practice of the city Marijuana Enforcement Team inspectors to work with a business to assist with compliance before referring a violation to the Marijuana Licensing Authority When the city proposes revocation , on a case by case basis and balanced with the seriousness of the violations, repeated violations or lack thereof, the city may offer the licensee a one-time opportunity to sell the business to an already approved Boulder licensee with a good enforcement history and prior approved background checks. This will not be offered to a licensed business more than one time. Mitigating factors include: •The violation is a first offense with a single count•the MJ business contacts the city with a plan for future compliance so that the business will not have future violations. Aggravating factors include: •multiple counts or a repeat offense•the violation occurs after the legal requirement has been explained to the licensee•the licensee does not contact the city to present a plan for future compliance to avoid repeat violations. 2. Chart of Classification for Modifications. The follo wing chart is adopted as the classification of different type of work that is exempt from the requirement to file a modification application, and work that qualifies as a minor or major modification. A modification shall be considered a Major Modification unless it fits into one of the other categories on this chart. Page 5 of 23 Document A: City of Boulder Penalty Schedule Guidelines Enclosed you will find a “Notice of Show Cause,” which is issued by the Boulder Liquor Authority (BLA). Your Show Cause Order alleges a violation of the Colorado Liquor Code under your alcohol beverage license. Your appearance date is noted in the Show Cause Order and a representative of the licensee is required to appear. At the Show Cause Hearing, the licensee will need to “show cause” as to why the liquor license should not be suspended or revoked. You may have an attorney represent you at the Hearing, but one is not required. You or your attorney must contact the prosecutor at least one week prior to the hearing. If you fail to contact him, you may be subject to the maximum suspension/revocation penalty. You will also need to provide proof of training for all of your employees that are involved in the sale or service of alcohol. Please use the attached form to summarize attendance by your personnel at a state-certified Responsible Vendor alcohol service training. The Boulder Beverage Licensing Authority has determined that class attendance will be deemed valid for the current term indicated on the card or the certificate. In addition, please provide copies of Certificates of Completion or Class Cards from the state-certified Responsible Vendor alcohol service trainings for all of your employees involved in the sale or service of alcohol (such evidence of complete employee state approved training must be considered by the Authority as to mitigation for violations from compliance checks). Please return completed proof of training chart and above certificates or cards to Mishawn J. Cook, Licensing Manager, delivering same to Brenton Building- 1136 Alpine Avenue, Boulder, CO 80304, Attn: Tax and License Division- 1st Floor, no later than nine days prior to the hearing (this will fall on a Monday). Please also submit any other Mitigating Facts evidence no later than nine days prior to your hearing. Failure to turn in these documents or to turn in these documents by the deadline may be viewed by the Authority as an “aggravating” factor and could potentially increase any suspension days imposed. The prosecutor is Lucas Markley, City Attorney’s Office Prosecutor for the Boulder Police Department, the telephone number is 303-441-3020 and the mailing address is City Attorney’s Office, P.O. Box 791, Boulder, CO 80306. Please be advised that it is your responsibility as a liquor licensee to know the state and local liquor codes and regulations. Mr. Markley will discuss the issues involved in your pending Hearing, but they cannot provide you with legal advice as to defense of your case. A copy of Boulder Liquor Authority “Penalty Schedule” for violations is attached. If you are found to have committed a violation, this schedule will be used as a guideline, at the discretion of the BLA, to impose your penalty. Dates of Suspension are selected by the BLA, and generally start on the Monday after the hearing date. In certain situations, C.R.S. 12-47-601 permits you to petition the BLA for permission to pay a monetary fine or “fine in lieu” of having your license suspended for all or part of the suspension period. If you decide to petition the BLA to pay a fine in lieu, you must bring to the hearing your books and records for the period of the last 90 days of your overall sales totaled and your alcohol sales totaled for that period. The fine amount shall be not less than $200 or more than $5,000. The BLA may, in its sole discretion, grant the petition to pay a fine, instead of a closure. The BLA will consider these requests on a case-by-case basis but do not have to grant them. Per state law and local rules, you will be required to display a poster for the duration of all suspension days. Failure to serve your suspension, post during your suspension, or abide by any additional local conditions directed by the BLA will result in an additional notice of show cause for violation. City of Boulder- Finance Dept. P.O. Box 791 Boulder, CO 80306 LicensingOnline@bouldercolorado.gov (303) 441-4192 (303) 441-1919 (FAX) Page 6 of 23 Document B: Beverage Licensing Authority Violations and Penalty Guidelines Rev. 2/17/15 Trade Name: ___________________________________________________________ Location Address: ______________________________________________________ PROOF OF TRAINING: The Beverage Licensing Authority has determined that it is a local condition of a liquor license that everyone involved in service/sale of alcohol is required to take a State approved Responsible Vendor Alcohol Service training within three months of premise opening or three months of hire date and that such training is valid and current at the time training certification is provided. Please fill out the following form, list any and all employee training below, and attach all Certificates of Training and Class Certification cards, or other evidence of training completion for each listed employee. Employee’s Name Training Title Hire Date Previous Training Date Latest Training Date Page 7 of 23 Document B: Beverage Licensing Authority Violations and Penalty Guidelines CITY OF BOULDER’S BEVERAGE LICENSING AUTHORITY MITIGATING AND AGGRAVATING FACTORS FOR VIOLATIONS AND PENALTY SCHEDULE GUIDELINES Effective January 1, 2003 and last updated on September 22, 2016 The Beverage Licensing Authority MAY, in their discretion, consider the following mitigating and aggravating factor evidence in imposing penalties. WRITTEN MITIGATING FACTOR EVIDENCE NEEDS TO BE SUBMITTED TO CITY LICENSING OFFICE AT LEAST 9 DAYS PRIOR TO ANY SHOW CAUSE HEARING. Mitigating Factors Aggravating Factors Training Programs- initial and on-going. Responsible Vendor Training and supplemental. Must be current. Failure to submit Mitigating Factor evidence at least nine days before hearing to City Licensing Written Policies Prior Offenses in the past five (5) Years Supervision Procedures Violations occurring outside of compliance checks (aka “Stings”) Self-check programs Lack of effective operational/training programs Use of birth-date input cash registers Multiple Police Contacts Community Involvement Failure to cooperate with liquor enforcement representatives Responsible advertising practices Irresponsible advertising policies Active Responsible Hospitality Group membership (8 out of 11 yearly meetings) Failure to Accept Responsibility for Violation Other Pertinent Facts Other Pertinent Facts These suspension penalties are guidelines only and are not binding on the Authority. The Authority reserves the right to impose any penalty authorized by law. Suspension dates are selected by the Authority, but generally start on the Monday after the hearing date. Also, Fines in lieu of suspension days served are generally not granted by Authority. Code Violation All Other Licenses Days Served Liquor Store Tavern License Days Served All Other Licenses Abeyance Days Liquor Store Tavern License Abeyance Days Sale/Service to a Minor 1 count 2 counts 3+ counts Second Offense within 1 year 5 10 15 10 3 6 9 6 9 20 30 20 6 12 18 12 Conduct of Establishment 1 count 2 counts 3+ counts Second Offense within 1 year 8 13 18 20 6 9 12 11 6 17 27 20 3 9 15 12 Sale/Service to Intoxicated Person First Offense 1 count 2 counts 3+ counts Second Offense within 1 year 5 10 15 10 3 6 9 6 9 20 30 20 6 12 18 12 Page 8 of 23 Document B: Beverage Licensing Authority Violations and Penalty Guidelines Sale/Service after Legal Hours First Offense Second Offense 3 10 2 6 7 20 4 12 Removal of alcohol from licensed premises 1 count 2 counts 3 5 3 5 7 5 7 5 Underage Employee selling or serving First Offense 1 count 2 counts 3+ counts 2 4 10 1 3 6 5 10 20 3 6 12 Permitting Disturbances First Offense Second Offense 10 20 6 12 20 30 12 18 Purchases of liquor from someone other than wholesaler 1 count 2 counts 3 5 3 5 7 5 7 5 Failure to maintain adequate books and records First Offense Second Offense 5 10 3 6 9 20 6 12 Failure to report manager, corporate, financial or trade name changes First Offense Second Offense 0 3 0 2 5 7 3 4 Failure to Meet Food Requirements First Offense Second Offense 5 10 [Includes Taverns] N/A N/A 9 (w/30 to correct) 20 (w/ 30 to correct) [Includes Taverns] N/A N/A Permitting Illegal Gambling First Offense Second Offense Third Offense 3 15 20 2 9 12 7 30 30 4 18 18 Video Poker Gambling First Offense Second Offense 15 20 9 12 30 30 18 18 Violations on Follow Up Inspections For each Offense 1 1 2 1 Altered Alcohol 1 count 5 3 9 6 Shake a Day 1 count 2 counts 5 10 3 6 9 20 6 12 In determining whether or not a second or subsequent violation occurred within a one-year period for abeyance days, the Authority will use the date of conviction for the first violation (usually the date of the show cause hearing) to the actual date of the second violation. For example, if a licensee was “convicted” of their first violation at a March 1, 2001 hearing and had ten days held in abeyance for one year and then they were cited on February 1, 2002, that would be considered a second violation within a year. The licensee would automatically have to serve the ten days held in abeyance from the first violation, plus their new suspension days determined by the Authority. If however, the licensee were cited on March 9, 2002, then it would not be considered a second violation within a year. Page 9 of 23 Document B: Beverage Licensing Authority Violations and Penalty Guidelines Page 10 of 23Document B: Beverage Licensing Authority Violations and Penalty Guidelines 1 MARIJUANA ADVISORY PANEL Thursday, July 7, 2016 Meeting Summary – Final Attendance Panelists: Heath Harmon, John Hartsor (Alternate for Alana Malone), Bob Hoban, Travis Howard, Andrea Mengehel, Bill Rigler, Kate Thompson, City Staff: Jon Berglin, Beverly Bookout, Mishawn Cook, Kathy Haddock, Sandra Llanes Facilitation: Heather Bergman and Katie Waller Action Items City Staff Update the Agreements Summary table based on today’s discussion. Change “Staff Concerns” to “Staff Considerations” on the Agreements Summary table. Add language to the schedule of penalties that inspectors may use their discretion in issuing verbal warnings. Gather information about how the sale of clones will be impacted by State transfer, METRC, and City zoning regulations. Heath Write language about advertising appealing to minors. Write messaging for youth, parents, and tourists. All Submit changes to the “Issue/Description” column in the Agreement Summary table. Submit comments and suggestions to draft code language to Heather. Bill Organize a subcommittee meeting with Jane, Heath, Alana, Bob, Sandra, and CVB representative to discuss social clubs. Andrea Provide Bill with a CVB contact for the social club subcommittee Schedule of Penalty Guidelines Most of the current licenses have been active in the City since 2013. Staff has recently been working on developing a schedule of penalty guidelines for the most commonly assessed violations to ensure consistency between licensees. This schedule does not include all violations, but rather those that have happened more than twice. If there are no mitigating or aggravating circumstances in the violation, the penalty will usually be the same between any two licensees. The most commonly assessed penalties are fines, but one suspension has been assessed by a municipal judge. Both the recreational and medical marijuana codes allow the assessment of fines up to $5,000 and other penalties in severe circumstances. The process for licensees to appeal violations changed at the end of 2015. Previously, the appeal of marijuana penalties went to the District Court as an appeal on the record, and now it goes to a municipal judge in a quasi-judicial hearing. A licensee pursuing the appeals process can wait to pay their fine until after the appeals process has been completed. Roughly 60 percent of licensees choose to pursue the appeals process, but there are many that do not participate simply because they do not want to go to a hearing or other reasons of the particular business. Before participating in the appeals process, licensees are given the option to provide City staff with mitigating evidence that shows the offense is not likely to be repeated; should they still choose to go forward with the appeals process after being assessed a penalty, the judge is given all the information including previously-provided mitigating and aggravating evidence. The Panel discussed the proposed penalty schedule guidelines provided by City staff; below are the highlights of this discussion. Page 11 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 2 Third offenses are infrequent. License revocation has only been recommended once in the last two-and-a-half years, and the judge overturned this decision to instead issue a fine and a suspension. The most frequent violations are related to advertising, distribution of coupons, unlawful signage, unapproved modifications, and lack of business manager or owner on site. There have been four offenses for sales to minors since the City started doing compliance checks at recreational dispensaries. Up until this point, this document has only been used internally, and it would be helpful to City staff to receive feedback on the structure and organization of the document. The current organization of the schedule of penalties does not use the same categories as the State, as the fine amount speaks for itself as to which violations the City finds to be more or less important. The State organizes its schedule of penalties in categories based on severity, starting with the least severe infractions and escalating. Public safety violations should be the most severe. It is helpful to provide licensees with information about what type of violation is considered the most critical or concerning and to be transparent about the consequences. This schedule of penalty guidelines should be shared in a long-term way that can change as penalties change. The schedule of penalty guidelines should be posted on the City website. City Council will have to look at this document before it can be posted on the City website. It may not be city council reviewing the document because of separation of powers issues. All violations are enumerated in the recreational and medical code, which lists every ticket and inspection a licensee can receive. Licensees sign a statement saying that they understand the Code when they are issued their license. Many business owners may not understand the intricacies of the Code since it is so sophisticated; licensees should have access to simplified language and the schedule of penalty guidelines. Staff is always available to answer questions, and the City offers many mentoring opportunities. It is inappropriate to say that some violations are more important than others when all code provisions should be followed. The schedule should include language that states assessed violations are not limited to those included in the schedule and refers the reader back to the Prohibited Acts portion of the Code. It would be useful for staff to know what is not understandable in the Prohibited Acts portion of the Code so that they can make the necessary changes. Many business owners understand the code, but business managers may not understand the intricacies; it would be useful to provide a cheat sheet. The previous Panel discussion and recommendation regarding advertising gave business owners more latitude which gives more exposure to minors, so the fine for violating advertising rules should be considered a public health and safety violation and increased. The regulations about printed materials within the store is clear, but many owners and employees are confused about what advertising may take place outside of the store; it would be useful to have clear language in the Code about this. Questions about what constitutes a violation typically occur on the enforcement level, not when penalties are being assessed. Page 12 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 3 There are circumstances when businesses think they are in compliance with the rules but are assessed a penalty due to miscommunication or lack of communication. Violations are given by inspectors, not the Licensing Department; the Licensing Department assesses penalties for the issued violation. There has been one case that the Licensing Department did not assess a penalty for a violation that was issued because it did not agree it was a violation. Many businesses do not appeal violations because they would rather just be done with the process. City staff is available to answer questions whenever businesses have questions; it is best to ask them questions before doing anything that may be a potential violation. Creating a mechanism to continue the discussion about marijuana policy after the end of the Panel will help alleviate some business concerns about violations and code interpretation. Many violations occur when there is a change in staff, particularly business managers. While the schedule of penalty guidelines is very helpful, it does not reflect the practice of issuing verbal warnings to businesses with a change to come into compliance. It could be useful to add something to the narrative at the bottom of the penalty schedule that states officers are allowed to use their discretion in issuing verbal warnings, but verbal warnings are not required. If a written Police Department affidavit makes it all the way to a hearing, it is not the Beverage Licensing Authority’s (BLA) practice to only issue a verbal warning. If the licensee is found guilty, there will be a penalty assessed. Issuing verbal warnings is different than what is done in the case of liquor violations. The problem for businesses is with interpretation, not the actual enforcement; this problem is not unique to the City of Boulder. After considering the above points, the Panel agreed to recommend the following: Organize the schedule of penalties into tiers, starting with the smallest fine. Add a disclaimer stating that the violations included in the penalty schedule guidelines are not exhaustive and that an exhaustive list of violations can be found in the City Code. Add language that inspectors maybe use their discretion in issuing verbal warnings or offering clarifications for violations. This will also be added into the agreements table for the next meeting. Develop a one-page cheat sheet about the new advertising rules. Post the penalty schedule guidelines on the website once the appropriate city entity has reviewed all MAP-suggested changes and the schedule has been reviewed internally by City staff. Increase the fine for advertising violations. Update the schedule of penalty guidelines to reflect Panel recommended changes if or when City Council approves them. Sale of Clones The current Code says that any germinated seed is a plant, and plants may not be stored or sold at medical or recreational sales locations. This policy was enacted due to concerns that allowing plants at sales locations could turn them into small cultivation facilities, leading to increased electrical load, water use, and marijuana odor. Also, the City requires that marijuana be locked up every night in sales locations, and allowing plans in sales locations would increase the amount of product having to be secured. Adding cultivation to a retail location is not allowed by the zoning. Industry receives many requests to sell plants, but they are currently unable to do so. Staff created a Page 13 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 1 MARIJUANA ADVISORY PANEL Monday, July 25, 2016 Meeting Summary – Final Attendance Panelists: Leisha Conners-Bauer, Heath Harmon, Travis Howard, Alana Malone, Andrea Mengehel, Dave Miller, Bill Rigler, Teri Robnett, Jane Theodore, Kate Thompson, Andy Tucker City Staff: Jon Berglin, Beverly Bookout, Mishawn Cook, Kathy Haddock, Sandra Llanes Facilitation: Heather Bergman and Katie Waller Action Items City Staff Change the MIP table under major modifications to read, “New or change to equipment (HVAC, irrigation) with effect on operation plan, floor plan, security plan, or industrial hygiene plan.” Find out when MED changes are made public and come into effect to inform the annual meeting time of the Panel in the future. Edit the agreements summary table to reflect the Panel discussion. Send out draft code language for comments. Heather Send out a doodle poll to find a meeting date for mid-September. Collaborate with staff on the presentation to City Council. Organize a presentation drafting meeting with Bill, Andrea, Kate, Heath, and Alana. Work with drafting group to write an executive summary for the City Council meeting and create PowerPoint presentation. All Submit any edits to the Creative Ideas messaging to Heath. Heath Add education for hospitality industry staff to the creative ideas document and sent to Heather. Permanent Modifications A small group met to create tiers for permanent modifications, based on the Panel discussion at the previous meeting. This proposal broke modifications into three tiers – minor, minor plus, and major. Minor modifications would require businesses to file an application, complete an inspection during the license renewal process, and pay a $50 fee. Minor plus modifications would require an application, a one-department inspection, and a $500 fee. Major modifications would require an application, multiple department inspections, and a $3,000 fee. After reviewing the small group proposal, staff created a secondary proposal that would ensure the City recovered its costs. This proposal broke modifications for stores and grows into three tiers – non- modifications, minor modifications, and major modifications. Non-modifications would require an inspection at the time of license renewal and no fee. Minor modifications would require an application, a one- department inspection, and a $250 fee. Major modification would require an application, four department inspections, and a $1,100 fee. The structure would be the same for marijuana-infused product locations (MIPs), except for a handful of outlined modifications. Staff also stated that they intend to review fees every year to ensure that the City is recovering its costs without making a profit. The Panel discussed these two proposals; below are the highlights of these discussions. It is unclear what would constitute a major change to a security plan that would not alter the square footage of the building. Structural changes, such as building a wall, would require inspections with multiple departments and would alter the security plan. Page 14 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 4 Ongoing Process for Discussion of Marijuana-related Issues A subcommittee met to discuss how future issues regarding marijuana should be addressed. They proposed that this group should schedule a meeting to address any issues that may arise after the study session with City Council. They also proposed for this group to remain a working group and engage annually at a time that is most useful to staff based on State legislative changes. The idea is that the public would be able to attend future meetings to engage in a more meaningful manner than public testimony at a City Council meeting. Below are the highlights of the Panel’s discussion. If this is an ongoing commitment, representatives should be able to change over time as long as the same perspectives are still present. The future group should retain all current perspectives and add a Boulder County representative. Staff must ask City Council how they wish to interact with this group in the future. The recommendations and work of this group could be presented to City Council in the public feedback section of the agenda memo. The group membership should remain as steady as possible to ensure cohesiveness and a strong foundation of trust. There should be more citizens on the Panel to be more reflective of the community. The membership of this group could be a recommendation to City Council. It would be most advantageous for this group to meet after the Marijuana Enforcement Division (MED) changes are made public each year. . These conversations would be most logical to occur in September. It would be beneficial for the Panel to meet again this year, as MED is expecting to release many changes. The best meeting time will be after Labor Day. Anything that City Council reviews will not include any MED changes that are coming out later this year, as they did not inform the context for the Panel’s discussion. Considering the above points, the Panel agreed to the following: All the written recommendations as drafted by this subcommittee will be given to City Council. If approved by council, this group will meet annually to discuss new and emerging issues. If approved by council, two new citizens should be added to the Panel to reflect the broader Boulder community, but membership should otherwise remain the same. If approved by council, the annual meeting should likely be held in the fall in order to address any changes by the State rulemaking, policies, and legislation. If approved by council, this group will meet in mid-September 2016 after the City Council study session. Schedule of Penalty Guidelines Staff created a new penalty schedule guideline document with the changes discussed from a previous meeting. The formatting and headers were changed to be more descriptive, and illegal advertising was elevated from an operational infraction to an impact on community or safety violations. All violations were organized by increasing level of severity and language was added and refined to the narrative at the end of the document. Below are the highlights of the Panel discussion. “Failure to obstruct view of sales or storage of marijuana” should read, “failure to obstruct view of sales or storage of marijuana from public view” to be clearer. There are still some small changes in terminology that have to be made to the document. Failure to abide by the neighborhood plan means that the business did not do what they indicated they would do in their own neighborhood plan to work with the community to mitigate impacts. Language about “working with businesses” needs to be less vague to ensure staff is held accountable. Page 15 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 5 It is hard to define how inspectors should work with businesses because it can vary depending on context, the inspector, and the business. Different departments have different requirements for notifying businesses of violations and giving them an opportunity for correction. For instance, fire requirements are different because their violations can usually be fixed quickly, while building code requirements often take more time to implement. A business not being responsive to a notice will trigger violation reports being sent to the Marijuana Licensing Authority. Businesses have the chance to correct a problem before a violation is issued. Perhaps the language should state that inspectors will consult with owners to receive voluntary compliance, which is typically what happens. Not all inspectors are as receptive to working with business owners, so it is necessary to capture voluntary compliance and mentoring in writing. Some inspectors will issue a violation and then speak with the business owner about how it can be avoided in the future. It could be stated that violations within the first two tiers will receive verbal warnings, while the third tier will be treated differently. There is not much flexibility when it comes to health and safety violations. Business owners should also be familiar with the prohibited acts listed in the City code to know what can and cannot be done. Industry is largely participating in this Panel due to issues of subjectivity in enforcement, although there is no way to ensure there is total clarity in every situation. The best way to deal with subjective enforcement is to work on building relationships. The agreements reached thus far have provided more clarity than what was available before. Staff is always available to answer questions, and it may be less helpful for business owners if all discretion is taken away from staff. This Panel is not going to be able to resolve the issue of objectivity and subjectivity. The document created by staff is good, but the Panel should find a way to indicate to City Council that there are still concerns about the subjectivity of enforcement with specific examples so any problems can be corrected. Part of the issue with subjective enforcement is that the rules are constantly changing, so there must be regular communication between the City and industry. Inspectors have committed to doing trainings with business managers and will discuss prevalent issues in hopes of decreasing their frequency. Staff has organized a financial records training that will be taught quarterly. Along with educational efforts, staff wants to stress to owners that they are always available to answer questions and are willing to participate in proactive dialogues. It would be useful for industry staff to receive the existing newsletters, rather than just owners. Email notice from Licensing to a business for license enforcement purposes can only be sent to two emails per business. However, a separate notification list can be set up for those interested in receiving regular updates and information items from city staff. Often the information reaches the business owner but is not disseminated down to staff, even though their behavior is very important in avoiding violations. Information about policy changes and trainings are currently posted on the City website. After considering the above points, the Panel agreed to the following: “Failure to obstruct view of sales or storage of marijuana” should ready, “failure to obstruct view of sales or storage of marijuana from public view” to be clearer. Language should be added to the document that references the availability of the appeals process, department trainings, staff, and other resources. All notifications for trainings and policy changes will be posted on the website. Page 16 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings 6 A new City email routing group will be set up to ensure anyone who wants to receive updates about marijuana regulations will be able to do so. All the above changes should be added to the document after the first paragraph. Staff will send the sign-up information for the new email list to Panel members and the email addresses provided by businesses for official notice. These changes will not be included in the code, but will be provided to City Council for review in a narrative document. Agreements Summary Table The Panel reviewed the latest draft of the agreements summary table. All changes to the draft document were highlighted in yellow. Language in red under advertising was added to better describe the public health perspectives. Panelists were reminded that this document will be the basis of the presentation to City Council on August 23, 2016, so all the information needs to be accurate regarding the Panel’s recommendations. Staff considerations are listed in this document to ensure that Panelists are not surprised with any staff materials that are produced later. Outstanding issues will come up later in future Panel discussions. The draft code language did not fit into the table, so staff recommended placing the current code numbers in this column for reference. Below are the highlights of the Panel’s discussions regarding this document and any agreed-upon changes. General Advertising The new proposed language to the issues/description explains the public health concerns regarding advertising. The draft code language that defines appealing to minors on page two of the document is more specific than the intent of the Panel. The language provided is still vague, and City Council could use more specificity. Cartoons and caricatures are different from illustrated animals. The definition of what appeals to minors was based on tobacco, but it is possible that the definition does not exactly fit the desires of the Panel. Illustrated animals do not appeal to minors in the way that characters do; this is exemplified by The Farm’s logo. Defining what appeals to children will vary depending on their age, as older kids may be more susceptible to think that many people use marijuana because of the abundance of pipe shops in the area. Defining what appeals to a minor is going to be partially subjective, so it may be best to leave the definition vaguer and allow businesses to take advantage of the appeals process if necessary. The language proposed by Heath Harmon that includes a reasonable person standard seems to be more effective than listing what is not allowed. The language proposed by staff works if animals are not listed with the other prohibitions. It is not possible to use Mr. Harmon’s language, as it just adds a reasonable person standard to constitutional words. It is important to be more conservative on this issue due to the agreement with the Federal government. Joe Camel is not acceptable because he is a caricature, not because he is an animal. There is no way to make this perfect for everyone, and this issue can be revisited in the future. It would be easiest to adopt the State’s definition. Animals can be removed from the current definition because cartoons and caricatures are still not allowed. The Panel agreed to accept the public health additions in the description column and take the word, “animal” out of the definition of appealing to minors in the draft code language. Page 17 of 23 Document C: The MAP Notes sections regarding the Penalty Guidelines from 7.7.2016 & 7.25.2016 meetings STANDARD (NON-EMERGENCY) RULE Rules 1 through 6 Regarding Medical and Recreational Marijuana Businesses Penalty Schedule Guidelines The following chart is adopted as the Guidelines for (a) the Marijuana Licensing Authority in recommending fines, suspension or revocation, and (b) the Municipal Court in quasi-judicial proceedings pursuant to Subsections 6-14- 14(c) and 6-16-14(c). City of Boulder Draft Marijuana License Penalty Schedule Guidelines - August 3, 2016 (updated 2018) The following is the Penalty Schedule that is used for guidance by the Boulder Marijuana Licensing Authority (BMA) when proposing penalties. This schedule includes the most frequently occurring violations, but it is not an all- inclusive list of all possible violations of the Boulder Marijuana Codes. The City Marijuana Enforcement team members are always available to answer questions beforehand about compliance from Boulder Marijuana businesses to ensure that their business operations remain compliant with our local law. Additionally, the City of Boulder offers MJ sales and service training for stores, key-holder training about city inspection requirements and enforcement trends, and MJ city tax requirement trainings so that Boulder Marijuana businesses can acquaint themselves with local laws and operating requirements. Notices for these city trainings will be posted on the City of Boulder licensing office website. Actual penalties may vary depending on a variety of factors such as mitigating or aggravating circumstances, efforts of business to correct the violation, or time between violations. Boulder marijuana businesses have a right of appeal for fine, suspension, and revocation recommended penalties, and if an appeal is timely filed a quasi- judicial hearing before a city municipal court judge will be held. The Marijuana Licensing Authority MAY, in their discretion, consider the following mitigating and aggravating factor evidence in imposing penalties. WRITTEN MITIGATING FACTOR EVIDENCE NEEDS TO BE SUBMITTED TO CITY LICENSING OFFICE WITHIN 7 DAYS OF CITED VIOLATION. Mitigating Factors Aggravating Factors Training Programs- initial and on-going. Responsible Vendor Training, BPD Training and supplemental. Must be current. Failure to submit Mitigating Factor evidence at least nine days before hearing to City Licensing Written Policies Prior Offenses in the past five (5) Years Supervision Procedures Violations occurring outside of compliance checks (aka “Stings”) Self-check programs ***to be defined Lack of effective operational/training programs Use of birth-date input cash registers or scanners Multiple Police Contacts Community Involvement Failure to cooperate with marijuana enforcement representatives Responsible advertising practices Irresponsible advertising policies Engagement with City MJ Meetings, Trainings and MAP Due Diligence ***to be defined Negligence Time between violations ***to be defined Other Pertinent Facts Other Pertinent Facts Page 18 of 23 Document D: City of Boulder Penalty Schedule Red-lined These suspension penalties are guidelines only and are not binding on the Authority. The Authority reserves the right to impose any penalty authorized by law. Suspension dates are selected by the Authority, but generally start on the Monday after the hearing date. Also, Fines in lieu of suspension days served are generally not granted by Authority. OPERATIONAL INFRACTIONS ***example*** 1 Count 2 Counts 3+ Counts Second Offense in 1 Year Unsealed MJ possession by employees at licensed premise or acceptance of samples by employees Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension MJ product or plants not properly packaged for removal/transport or MIP products not properly labeled Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension Unapproved goods sold at licensed premise Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension ID scanner not utilized and/or failure to properly verify ID for determination of age Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension Refusing to remove key-holder from management when background is unapproved by city Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension Failure to obstruct view MJ of sales or storage of MJ from public view Fine Fine + 1 day suspension Fine + 2 day suspension for each offense Fine + 3 day suspension IMPACT ON COMMUNITY OR SAFETY VIOLATIONS ***example*** 1 Count 2 Counts 3+ Counts Second Offense in 1 Year Illegal Advertising Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension For Medical Marijuana wel!ness centers only, not having a private consultation room or not offering other holistic offerings at licensed location Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension No city approved key-holder or owner on-site Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Uncooperative with PD with inspections or investigations or misrepresentation to regulators Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Refusal to allow city inspections or premise access Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Sale of LLC shares or corporate stock in Boulder business or adding officers/managing members without proper and complete 30-day pre- file with the city Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Page 19 of 23 Document D: City of Boulder Penalty Schedule Red-lined Secure dispensing area not locked or restricted licensed location unlocked Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension MJ product transport details not emailed to BPD and email bounce back not printed for transportation by licensee Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Processing of MJ in violation of the Code (e.g. at store, at a grow or illegal processing at a MIP) Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Failure to abide by neighborhood responsibility plan Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Failure to remedy odor violations as directed Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension On-premise consumption by customers Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension Failure to operate business in compliance with the license or its operating plan or security plan Fine Fine + 2 day suspension Fine + 3 day suspension for each offense Fine + 4 day suspension HEALTH, SAFETY AND SECURITY VIOLATIONS ***example*** 1 Count 2 Counts 3+ Counts Second Offense in 1 Year Use of unapproved locking storage that does not qualify as a safe Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Not making disposed of MJ unusable and unrecognizable and not locking dumpsters Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Not locking product or receipts in a safe for overnight storage Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension MJ or MJ product outside of a licensed premise Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Making a permanent modification of the licensed premises without prior city approval Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension On-premise consumption by employees, managers or owners Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Video unavailable, cameras not working, or 40 days videq off-site storage copy unavailable Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Page 20 of 23 Document D: City of Boulder Penalty Schedule Red-lined A person under the age of 21 in the licensed premises of a recreational marijuana business Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension Sale of MJ or MJ product to a person under 21 years of age Fine Fine + 3 day suspension Fine + 4 days suspension for each offense Fine + 5 day suspension In determining whether or not a second or subsequent violation occurred within a one-year period for abeyance days, the Authority will use the date of conviction for the first violation (usually the date of the show cause hearing) to the actual date of the second violation. For example, if a licensee was “convicted” of their first violation at a March 1, 2001 hearing and had ten days held in abeyance for one year and then they were cited on February 1, 2002, that would be considered a second violation within a year. The licensee would automatically have to serve the ten days held in abeyance from the first violation, p lus their new suspension days determined by the Authority. If however, the licensee were cited on March 9, 2002, then it would not be considered a second violation within a year. Except for blatant violations, it is the practice of the city Marijuana Enforcement Team inspectors to work with a business to assist with compliance before referring a violation to the Marijuana Licensing Authority Generally speaking, it is the intent that "Counts" drop off after (5) years, regardless of additional violations of the same offense. In the event of a transfer of license or if ownership majority changes and as long the changes are in good faith and not to circumvent the penalty schedule, the violation record would be reset. When the city proposes revocation , on a case by case basis and balanced with the seriousness of the violations, repeated violations or lack thereof, the city may offer the licensee a one-time opportunity to sell the business to an already approved Boulder licensee with a good enforcement history and prior approved background checks. This will not be offered to a licensed business more than one time. Please Note: if a recording of the compliance check interaction inside of your marijuana license premise was produced, it is made available so that the licensee may hear it on our marijuana licensing website at: •www.bouldercolorado.gov/.. . Having access to the audio recording associated with your show cause hearing is an important part of your review of the allegations against you, so please do not hesitate to call so that City Licensing may assist you in accessing the recording. Please call us at 303-441-4192 and select "Marijuana Licensing" immediately if you cannot find the recording or if you have any issue with your ability listening to it. IF APPLICABLE: If a suspension is suggested, enclosed you will find a “Notice of Show Cause,” which is issued by the Marijuana Licensing Authority. Your Show Cause Order alleges a violation of the Marijuana Code under your marijuana license. Your appearance date is noted in the Show Cause Order and a representative of the licensee is required to appear. At the Show Cause Hearing, the licensee will need to “show cause” as to why the marijuana license should not be suspended or revoked. You may have an attorney represent you at the Hearing, but one is not required. You or your attorney must contact the prosecutor at least one week prior to the hearing. If you fail to contact him, you may be subject to the maximum suspension/revocation penalty. You will also need to provide proof of training for all of your employees that are involved in the sale or service of marijuana. Please use the attached form to summarize attendance by your personnel at a state-certified Responsible Vendor marijuana service training or Boulder PD specific Safe Sales class. The Boulder Marijuana Licensing Authority has determined that class attendance will be deemed valid for the current term indicated on the card or the certificate. In addition, please provide copies of Certificates of Completion or Class Cards from the city/state-certified Responsible Vendor service trainings for all of your employees involved in the sale or service of marijuana (such evidence of complete employee state approved training must be considered by the Authority as to mitigation for violations from compliance checks). Please return completed proof of training chart and above certificates or cards to Mishawn J. Cook, Licensing Manager, delivering same to Brenton Building- 1136 Alpine Avenue, Boulder, CO Page 21 of 23 Document D: City of Boulder Penalty Schedule Red-lined 80304, Attn: Tax and License Division- 1st Floor, no later than nine days prior to the hearing (this will fall on a Monday). Please also submit any other Mitigating Facts evidence no later than nine days prior to your hearing. Failure to turn in these documents or to turn in these documents by the deadline may be viewed by the Authority as an “aggravating” factor and could potentially increase any suspension days imposed. The prosecutor is ______________ for the Boulder Police Department, the telephone number is 303-441-3020 and the mailing address is City Attorney’s Office, P.O. Box 791, Boulder, CO 80306. Please be advised that it is your responsibility as a marijuana licensee to know the state and local marijuana codes and regulations. _______ will discuss the issues involved in your pending Hearing, but they cannot provide you with legal advice as to defense of your case. A copy of Boulder Marijuana Authority “Penalty Schedule” for violations is attached. If you are found to have committed a violation, this schedule will be used as a guideline, at the discretion of the BMA, to impose your penalty. Dates of Suspension are selected by the BMA, and generally start on the Monday after the hearing date. In certain situations, C.R.S. ________ permits you to petition the BMA for permission to pay a monetary fine or “fine in lieu” of having your license suspended for all or part of the suspension period. If you decide to petition the BMA to pay a fine in lieu, you must bring to the hearing your books and records for the period of the last 90 days of your overall sales totaled and your alcohol sales totaled for that period. The fine amount shall be not less than $200 or more than $5,000. The BMA may, in its sole discretion, grant the petition to pay a fine, instead of a closure. The BMA will consider these requests on a case-by-case basis but do not have to grant them. Per state law and local rules, you will be required to display a poster for the duration of all suspension days. Failure to serve your suspension, post during your suspension, or abide by any additional local conditions directed by the BMA will result in an additional notice of show cause for violation. Page 22 of 23 Document D: City of Boulder Penalty Schedule Red-lined City Response and Comments: To be submitted for consideration by Marijuana Advisory Panel To be submitted for consideration by marijuana business working sub-group Denied (i.e. conflicts with state law, exceeds funding or resources limit, needs additional clarification or justification, etc) (see Comments below) Comments: Page 23 of 23