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May 4, 2022 SB 22-205
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Revised Fiscal Note
(replaces fiscal note dated April 28, 2022)
Drafting Number:
Prime Sponsors:
LLS 22-0901
Sen. Coram; Fenberg
Rep. Valdez A.
Date:
Bill Status:
Fiscal Analyst:
May 4, 2022
Senate Appropriations
Clare Pramuk | 303-866-2677
clare.pramuk@state.co.us
Bill Topic: INTOXICATING HEMP & TETRAHYDROCANNABINOL PRODUCTS
Summary of
Fiscal Impact:
☒ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
This bill authorizes the Department of Public Health and Environment to promulgate
rules prohibiting intoxicating tetrahydrocannabinol isomers that originate from
industrial hemp or may be synthetically derived, requires the Department of Revenue
to establish a task force study intoxicating hemp products and make legislative and
rule recommendations, and creates an unfair or deceptive trade practice. The bill
increases expenditures beginning in FY 2022-23 and ongoing, and may increase state
revenue.
Appropriation
Summary:
For FY 2022-23, the bill requires an appropriation of $587,347 to the Department of
Law.
Fiscal Note
Status:
The revised fiscal note reflects the introduced bill, as amended by the Senate Business
Committee and Senate Finance Committee.
Table 1
State Fiscal Impacts Under SB 22-205
Budget Year
FY 2022-23
Out Year
FY 2023-24
Revenue
Expenditures Cash Funds $587,347 $576,687
Centrally Appropriated $58,250 $58,250
Total Expenditures $645,597 $634,937
Total FTE 3.0 FTE 3.0 FTE
Transfers - -
Other Budget Impacts - -
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May 4, 2022 SB 22-205
Summary of Legislation
This bill makes several changes involving hemp, described in more detail below, including:
authorizing the Department of Public Health and Environment (CDPHE) to promulgate rules
prohibiting intoxicating tetrahydrocannabinol isomers that originate from industrial hemp or may
be synthetically derived;
requiring the Department of Revenue to establish a task force to study intoxicating hemp products
and make legislative and rule recommendations; and
creating an unfair or deceptive trade practice to be enforced by the Department of Law.
Rulemaking. The CDPHE is authorized to promulgate rules to prohibit the sale of final products that
contain the chemical modification, conversion, or synthetic derivation of intoxicating
tetrahydrocannabinol isomers, including delta-8, delta-9, and delta-10, or other intoxicating
tetrahydrocannabinol isomers that originate from industrial hemp or may be synthetically derived.
Task force. The Marijuana Enforcement Division (MED) in the Department of Revenue is required to
create a task force to study intoxicating hemp products and make legislative and rule
recommendations. Members include representatives of several state agencies and stakeholders in
industrial hemp and medical and retail marijuana. The task force must be convened by
September 1, 2022, and report to the General Assembly by January 1, 2023. The report must contain
the task force's legislative recommendations concerning the regulation of industrial hemp and an
analysis of the effectiveness of each recommendation. The report must also include rule
recommendations concerning the regulation of intoxicating hemp products.
Consumer Protection Act. A person who violates the Pure Food and Drug Act or the Marijuana Code
as either applies to hemp, industrial hemp, industrial hemp products, intoxicating hemp, adult use
cannabis products, the plant cannabis sp., or anything derived from or produced from the plant
cannabis sp. commits an unfair or deceptive trade practice, enforceable by the Department of Law.
Background
Delta-9 THC occurs naturally in cannabis and is the main psychoactive ingredient in medical and
retail marijuana. Industrial hemp is defined in Colorado law as cannabis that contains a delta-9 THC
concentration of no more than three-tenths of one percent on a dry weight basis. Industrial hemp,
because of its low delta-9 THC content, is not considered a Schedule 1 Controlled Substance federally.
Industrial hemp also contains cannabidiol (CBD) which is made into a number of products including
foods, lotions, and medications that are widely available. Industrial hemp products are currently on
the market, outside of regulated marijuana markets, that contain delta-8 THC, an artificially derived
CBD produced from industrial hemp. The delta-8 THC is synthesized from CBD with the use of
solvents and has psychoactive and intoxicating effects. The federal Food and Drug Administration
has not evaluated or approved products containing delta-8 THC.
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May 4, 2022 SB 22-205
State Revenue
The bill may increase revenue from civil penalties for violations of the Consumer Protection Act which
are deposited in the General Fund and subject to TABOR.
State Expenditures
The bill increases state expenditures from the Marijuana Tax Cash Fund by $645,597 in FY 2022-23 and
$626,997 in FY 2023-24 for the Department of Law. Expenditures are shown in Table 2 and detailed
below.
Table 2
Expenditures Under SB 22-205
Cost Components FY 2022-23 FY 2023-24
Department of Law
Personal Services $313,747 $313,747
Operating Expenses $4,050 $4,050
Capital Outlay Costs $18,600 -
Vehicles $4,630 $4,630
Mileage $1,320 $1,320
Consultant and Laboratory Costs $245,000 $245,000
Centrally Appropriated Costs
1
$58,250 $58,250
Total $645,597 $626,997
Total FTE 3.0 FTE 3.0 FTE
1
Centrally appropriated costs are not included in the bill's appropriation.
Department of Law. By establishing violations of this bill as unfair and deceptive trade practices, the
bill is expected to increase the number of complaints the Consumer Protection Section of the
Department of Law receives. The section is also expected to initiate investigations. The section
requires an increase of 3.0 FTE to investigate complaints and take enforcement action if indicated. The
section also requires a consultant to provide expertise on intoxicating hemp and laboratory testing to
determine THC content in industrial hemp products. Costs include standard operating, capital outlay,
and vehicle lease and mileage and assume a July 1, 2022 start date. Staff will be hired at the salary
midpoints.
Other State Agencies. The Department of Revenue will have an increase in workload to appoint
members and convene and participate in the task force. The Department of Agriculture and the
Department of Public Health and Environment will have an increase in workload to collaborate on
the appointment of members to the task force and to participate in the task force.
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May 4, 2022 SB 22-205
Centrally appropriated costs. Pursuant to a Joint Budget Committee policy, certain costs associated
with this bill are addressed through the annual budget process and centrally appropriated in the Long
Bill or supplemental appropriations bills, rather than in this bill. These costs, which include employee
insurance and supplemental employee retirement payments, are shown in Table 2.
Local Government
Local government representatives that participate in the task force will have an increase in workload
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature.
State Appropriations
For FY 2022-23 the bill requires an appropriation of $587,347 from the Marijuana Tax Cash Fund to
the Department of Law and 3.0 FTE. Of this, $4,630 is reappropriated to the Department of Personnel
and Administration for leased vehicle services. Currently, the bill includes an appropriation of
$675,000 to the Department of Law.
State and Local Government Contacts
Agriculture Counties Information Technology
Law Municipalities Public Health and Environment
Revenue
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.