GLENWOOD SPRINGS, Colo. -- A Colorado legislator says he will propose a bill to regulate Colorado's medical marijuana industry by cutting out individual distributors and creating a state monopoly.

State Sen. Al White said the state's failure to regulate the industry has raised concerns that illicit drug cartels are using local dispensaries as quasi-legal outlets for black market marijuana.

"There are also concerns that the drug is being handed out liberally to many who don't really qualify," the Republican from Hayden said.

Colorado voters approved medical marijuana use in 2000, but it is up to local governments to set regulations for dispensaries.

The number of dispensaries and people registered to use medical marijuana with a doctor's recommendation has increased rapidly in the past few months. The pace picked up after the state health board's rejection in July of a proposal to limit suppliers to five patients.

Last week, however, state health officials narrowed the definition of who may sell medical marijuana in response to a court ruling that caregivers must have personal contact with patients and do more than just provide marijuana.

White said that in 2007, fewer than 2,000 people held medical marijuana cards. "That number has now grown to around 13,000, with some 600 new applications coming in every day," he said.

The lawmaker's plan would take the business out of the hands of entrepreneurial caregivers and establish a state monopoly to grow and distribute marijuana. Licensed pharmacists would have to fill prescriptions for medical marijuana.

White's bill would split revenue from marijuana sales between a state "rainy day" fund and a special fund for colleges and universities. All the money would go to higher education after the rainy day fund reached $1 billion.

Jesse Lafayette, who runs the Peaceful Warrior Medical Marijuana dispensary in Glenwood Springs, said White's plan would put him and others out of business.

"It seems to me like they're still fighting marijuana and continuing this war on drugs, when what we really need from our elected officials is more advocacy for marijuana and more awareness," Lafayette told the Glenwood Springs Post Independent.