Managing Affordable Housing in a World of Marijuana

Managing Affordable Housing in a World of MarijuanaModerated by:Charles Borgman Ireland Stapleton Pryor & Pascoe PC and Colorado Housing and Finance Authority

Tom Downey Gerritt Koser Scott Aker Debi Ross

Tom DowneyAttorneyIreland Stapleton Pryor & Pascoe PC

Direct: (303) 628-3639Mobile: (303) [email protected]

Gerritt Koser, Esq.Staff AttorneyDenver Housing Authority

Direct: (720) [email protected]

Deborah Ross WeselohCEO and PresidentCPM, NAHP, HCCP, CPO, SHCM, BrokerThe Ross Management Group, Inc.


Scott AkerChief Operating OfficerGrand Junction Housing Authority




It’s Spreading

Federal / State Law Conflict

ARTICLE VI of US CONSTITUTION:

(2) Supremacy of Constitution, Treaties & Laws.

This Constitution, and the laws of the United Stateswhich shall be made in pursuance thereof,… shall be thesupreme law of the land; and the judges in every state shall bebound thereby; anything in the constitution or laws of anystate to the contrary notwithstanding.

Federal / State Law Conflict

Federal EnforcementMarijuana Laws:Schedule 1 Narcotic - 1970

Federal seizureAiding and abettingLegal line never ends – enforcement line is wherever enforcer draws itState trooper enforcement analogy

Three Categories Of Vulnerability1 – Criminal2 – Regulatory / Licensing 3 – Civil / Contracts / Grants

Marijuana Industry StatusHalf the states have legalized marijuana, including GeorgiaInformal political coalitionPre-2000: 95% of MJ smoked2019: Less than 40% of MJ smokedOligopoly Sophisticated operators

Industry Status(Reflected In All Jurisdictions)125K Medical Cards in Colo. – 2.5% of Colo.700,000 Colo. Users – 12% of Colo. Colorado’s 2018 gross sales - $1.6 billion Market Size in 2019 - $20 billionMJ consumption mirrors alcohol

Federal Money Laundering LawWhoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified activity,WITH THE INTENT TO PROMOTE THE CARRYING ON OF SPECIFIED UNLAWFUL ACTIVITYIs in a Heap O’ Trouble…

Federal Money Laundering Law KNOWING = Knew or should’ve knownILLEGAL ACTIVITY = Federal drug felonyFINANCIAL TRANSACTION = Rent/purchasePROMOTE = Making it easier

Special IssuesBanking - How does it work now for Marijuana, and what’s happening with Congress?Bankruptcy / ReceivershipsSecurity interests / contingent equity

Hemp / CBD –A Completely Different AnimalThe 2018 Farm BillDEA, USDA and FDA Rulemaking

Prospects For Change In The Laws / Regulations Going ForwardBanking / 280ERescheduling v. Descheduling



Marijuana Statement re HCV S8Housing Choice Voucher/Section 8 Participants:You are receiving this notice because you are a participant in DHA’s Housing Choice Voucher/Section 8 Program. This is your notice that the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana will continue to be a program violation and may subject individuals to termination of assistance. If you have any questions regarding this notice please contact your assigned Certification Specialist.

Housing Choice Voucher/Section 8 Participants Spanish:Usted está recibiendo esta notificación porque es un participante en el Programa Housing Choice Voucher/Sección 8 de DHA. Ésta es su notificación de que la posesión, consumo, uso, exposición, transferencia, distribución, venta, transporte o cultivo de marihuana continuará siendo una violación del programa y puede someter a las personas a la terminación de asistencia. Si tienecualquier pregunta relativa a esta notificación, por favor, póngase en contacto con su Especialista de Certificación asignado.

Housing Choice Voucher/Section 8 Landlords:You are receiving this notice because you are a landlord in DHA’s Housing Choice Voucher/Section 8 Program. This is your noticethat the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana by HousingChoice Voucher/Section 8 participants will continue to be a program violation and may subject individuals to termination of assistance. If you have any questions regarding this notice please contact the DHA Inspections Department.

Marijuana Statement re PHDHA Residents:

You are receiving this notice because you are a resident of a DHA property. This is your notice that the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on any DHA property will continue to be a lease violation and may subject individuals to eviction. While this prohibition takes effect immediately, you will be required to sign a copy of the enclosed lease addendum no later than your next lease renewal. If you have any questions regarding this notice or the enclosed lease addendum please contact your property manager.

Marijuana StatementDHA tenants:

In spite of the legalization of marijuana under state law in Colorado, Amendment 64 gives property owners the right to regulate marijuana on its property. Additionally, marijuana remains a Schedule I controlled substance under the Federal Controlled Substances Act. DHA’s Public Housing properties receive federal housing program subsidies and are subject to federal rules and regulations. Given these realities, and the fact that a majority of DHA residents are elderly, disabled, and youth under age 21, DHA’s policy is to adhere to stricter federal law and statutes and continue to prohibit marijuana, both medical and recreational, in all of its programs.

MARIJUANALEASE

ADDENDUM

1. Resident(s) resides at a property owned and/or managed by the Housing Authority of the City and County of Denver (“DHA”).

2. Resident acknowledges that the possession, consumption, use, display, transfer, distribution, sale, transportation, or growing of marijuana on any DHA-affiliated property is a Lease violation and may subject Resident(s) to eviction.

3. Resident(s) will ensure that Resident(s), Resident(s)’ family, guests, and invitees will comply with this Addendum.

4. One or more violations of this Addendum constitutes a serious violation of Resident(s) Lease and shall be considered a material non-compliance with the Lease. Any such violation is grounds for termination of Resident(s) tenancy.

5. This Addendum is incorporated into the Lease between Management and Resident.

6. In the case of any conflict between the provisions of this Addendum and any other provisions of the Lease, the provisions of this Addendum shall govern.

I/WE HAVE READ, UNDERSTAND AND AGREE TO THE ABOVE ADDENDUM AND CERTIFY BY MY/OUR SIGNATURE(S) BELOW THAT I/WE HAVE RECEIVED A COPY OF THE ADDENDUM.

________________________________________________________SIGNATURE OF RESIDENT DATE________________________________________________________SIGNATURE OF RESIDENT DATE________________________________________________________SIGNATURE OF MANAGER DATE



764 Units – 11 Properties- ~ 50% Seniors (62+)- ~ 25% Families- ~ 25% Disabled



Questions?

Moderated by:Charles Borgman Ireland Stapleton Pryor & Pascoe PC and Colorado Housing and Finance Authority

Tom Downey Gerritt Koser Scott Aker Debi Ross









Documents

Managing Affordable Housing in a World of Marijuana