A House panel on Friday approved on a near-unanimous vote a measure that would allow marijuana cultivators to change the designation of a plant from retail to medical.

The sponsors of House Bill 21-1216 – Reps. Alex Valdez, D-Denver, and Kevin Van Winkle, R-Highlands Ranch – told the House Business Affairs and Labor Committee the legislation would allow the marijuana industry to redesignate a product to better meet the needs of the medical market. A handful of marijuana industry groups backed the proposal.

“This bill will allow us the regulatory flexibility to adapt to consumer demand without having to stockpile a lot of inventory early on in the process,” said Nico Pento, the government affairs director at Terrapin Care Station.

Valdez said under current law, marijuana must be designated for either medical or recreational use at a very early stage, which can often lead to shortages for medical patients. Van Winkle added those shortages were unnecessary because there is no difference between medical and recreational plants.

“This early designation that we have right now is arbitrary and inconvenient – it hinders efficient determinations of supply and demand, ultimately causing patients to have less product variety and causing business owners to really have to hold much more product on their shelves than they would otherwise need to,” he said.

The bill would allow a “one-way street” for plants designated to be sold in the recreational market to be moved to the medical market. Those products would still be subject to the 15% excise tax levied on recreational products.

Products would not be allowed to be moved from a medical designation to recreational. Joe Megyesy, the director of public affairs for Good Chemistry, said that provision was intended to address concerns from regulators that the bill could be used to dodge the excise tax.

“The one-way transfer from retail to medical is to prevent any sort of nefarious activities,” Megyesy said.

Pento also attempted to alleviate concerns about such nefarious activities, noting plants moved from a recreational designation to medical would remain in the track-and-trace system.

“I think we are at a point in this industry where we’ve been around for a very long time and there are still a few nuances in the code that we need to clean up and this is one of them,” he said.

The committee ultimately voted 12-1 to move the bill on for consideration by the full House. The only vote against the legislation came from Rep. Terri Carver, R-Colorado Springs, who otherwise did not speak during the hearing.