Colorado’s retail marijuana rollout ruled ‘success,’ according to report
August 9, 2014
The experiment is working — at least according a report released last week by the Brookings Institution, an independent, nonprofit think tank based in Washington, D.C.
"The state government has met the most basic standard of success: it has done what Amendment 64 instructed it to do," wrote John Hudak in his final report. "Colorado has effectively created regulatory and administrative apparatuses that facilitate the legal retail marijuana market."
The report finds a major reason for the successful rollout was the effort made in the governor's office.
Gov. John Hickenlooper was an outspoken opponent of legalizing pot. In September 2012, just two months before the majority of Coloradans approved the measure, the governor said, "Colorado is known for many great things — marijuana should not be one of them."
For good or bad the amendment passed, and rather than maintain his staunch opposition, Hickenlooper instead tried his best to ensure it was implemented properly. Despite his vocal opposition to the legalization of retail marijuana, it was his office's efforts that made the rollout a success, according to the study.
First, he organized a rapid response task force. The task force was composed of scores of people engaged in both sides of debate. Members also possessed diverse backgrounds. Within just a few months of Amendment 64 passing, the task force had completed and issued a 200-page report on how the new law should be implemented. Many of the suggestions were used.
"Yes, opposition to the policy still exists, but stakeholders with diverse views — on both sides — took cues from the governor and others and worked to make implementation a success," Hudak said. "To be sure, it was not a kumbaya moment across Colorado, but the maturity and professionalism shown by both sides facilitated what has been an impressive implementation rollout."
This attitude has even been reflected by local leaders on the issue. For example, Breckenridge Town Council has been divided for some time on the idea of allowing retail marijuana located in the town's core.
Mayor John Warner has been an outspoken opponent of allowing retail sales on Main Street. However, he's also stated publicly if it is approved, rather than try to stand in the way, he'll work with others to make sure it's implemented and regulated in the best manner possible. It's the same attitude and spirit of collaboration and good governance that made the rollout successful statewide.
Tweaking the system
The addition of legal recreational marijuana led to improvements in regulation and enforcement of medical as well. The Medical Marijuana Enforcement Division (MMED) was created in 2010, a full decade after medical marijuana was approved in the state, to regulate the industry. The division was fraught with problems, "from leadership to administrative efficiency to funding," said Hudak.
The task force recommended dismantling the MMED and recreating it as the Marijuana Enforcement Division, which would regulate both medical and recreational. The new division not only implemented better funding mechanisms, it also relied on input from nongovernmental stakeholders.
"MED is light years ahead compared to the previous division," said Marco Vasquez of Colorado Association of Chiefs of Police.
"MED has facilitated a real partnership with industry," said Meg Collins with Cannabis Business Alliance, "which is necessary because their success is intertwined."
Hudak points out six points in regulation that have led to the successful rollout. Those include (1) the seed-to-sale tracking system that attempts to monitor every plant in every cultivation facility using a barcode tag; (2) vertical integration, which helps limit the complexity and size of the market; (3) allowing only existing medical marijuana enterprises to partake in the retail side, which also helped limit the size of the industry being regulated; (4) video surveillance requirements to monitor activities at cultivation, processing and retail facilities; (5) limits on quantities purchased; and (6) changing the tax system so marijuana tax helps fund MED as well as serve the public good through steering tax funds to education, prevention, pubic safety and unrelated policy areas like school construction.
Longtime industry leaders support the creation of the MED and how it operates.
"The first few months there were some problems," said Brett Mouser, owner and co-founder of Mahatma Extreme Concentrates in Denver. "But they've been willing to work with us and others and help develop best practices to regulate the industry. It's come a long way."
Despite the label of "success," Hudak found some areas for concern, one being edibles and their inconsistency. He said random testing of some edibles found serious problems. Candy bars labeled as having 100 milligrams of THC had anywhere from 150 milligrams to less than half a milligram.
"When there is substantially more THC in an edible than is labeled, overconsumption can occur even when the consumer follows directions carefully," Hudak said. "When THC content is lower than labeled, the user may be lulled into over-consuming a subsequent edible. Either way, the result is a dangerous miscalculation."
The state is currently looking at laws regarding the labeling and testing of edibles.
A second issue concerns home grows. Since it's so difficult to regulate home grows, law enforcement worries some of these are being used to supply the black market in other states.
There is also concern over "gray-market" medical consumers. Gray-market users are people without legitimate medical issues who have and use medical marijuana cards. It was believed that the legalization of recreational marijuana would help remedy the situation. Instead, it's made it worse. With the medical marijuana tax being so low compared with retail, the number of registered medical patients has increased since Jan. 1.
"The effort to shrink medical marijuana rolls — and collect the retail-market tax revenue that comes with it — has not borne fruit," Hudak said.
He points to marijuana tourism as a failure as well. With a ban on public smoking, and a complete lack of legal smoking clubs, the average visitor has no place to smoke their purchases, especially when almost every hotel is a smoke-free facility. Hudak said this has caused many tourists to try edibles instead of smoking the flowers, which can be more unpredictable and even dangerous for people for have never or seldom used marijuana before.
Still, the report finds the successful regulations far outweigh the negatives. And the system set up allows for improvements along the way.
The marijuana regulations don't only serve as a blueprint for other states whose voters might one day decide to legalize it, but the process by which these regulations were formed could serve as a template for how good government, be it federal, state or local, rolls out or implements any new major law or policy.
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