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Legalization of Marijuana - Pitfalls for Landlords and Employers?

On November 6, 2012, Colorado voters adopted Amendment 64, which decriminalizes the possession, transfer (including retail sales), and cultivation of marijuana with certain limitations. The Amendment adds Section 16 to Article XVIII of the Colorado Constitution. While it will be some time before a regulatory scheme is developed and implemented as required by the Amendment, parts of the Amendment will take effect upon certification of the election results by the Governor (i.e., decriminalization of possession and transfers without remuneration).

The Amendment makes it prudent for residential and commercial landlords to proactively define their policy on marijuana possession, transfer, and cultivation within and on their property and to structure their leases accordingly. In particular, landlords need to understand that while the possession, transfer, and cultivation of marijuana may become legal at the state level, the federal Controlled Substances Act still remains in force and the federal government's response, at present, is unclear. Landlords complicit with marijuana possession, transfer, and cultivation on their property by tenants may expose themselves to a variety of uncertainties and risks. However, the Amendment does allow several opportunities for landlords to protect themselves.

Likewise, employers will no longer have the benefit of a state-level criminal law and enforcement regime to deter the use of marijuana by employees. Accordingly, employers may want to reinforce their policies on employee marijuana use. While marijuana possession and use has been decriminalized at the state level, Amendment 64 does provide employers with certain rights, including drug testing.

Wick & Trautwein, LLC has extensive experience in advising residential and commercial landlords as well as businesses in an employment context. If you have concerns about how Amendment 64 may impact your operations, our attorneys can provide guidance necessary to navigate Amendment 64 effectively.

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