Wednesday, July 23, 2014

Colorado's director of pot enforcement thinks legalization is going great

Seth McConnell / Denver Post via Getty Images

Ron Kammerzell is at the center of Colorado's experiment with marijuana legalization. As the director of enforcement at the Colorado Department of Revenue, Kammerzell has overseen the implementation of regulations on legalized marijuana sales following Colorado voters' approval of Amendment 64, which legalized pot in the state, in 2012. Given all the attention surrounding Colorado's growing marijuana industry, I reached out to Kammerzell to discuss how he sees Colorado's experience going so far. This interview has been edited for length and clarity.

German Lopez: How would you say Colorado's experiment with marijuana legalization is going?

Ron Kammerzell: We're pretty pleased thus far with the rollout of Amendment 64. We started issuing licenses in January. That process went very well.

We're currently rolling out testing programs for retail marijuana, and that's going pretty well. That will continue rolling out through July. The first part of that was potency testing for edibles in May, and then potency testing for the flower and concentrate products in June, and then contaminate testing will occur from July to October.

But thus far we're pretty pleased with the progress that we've made.

GL: How have those tests gone so far?

RK: They've actually gone pretty well. We haven't had too many rejected batches that I'm aware of.

The way that the rules are written it gives an opportunity to manufacturers: if they have a failed test on their potency, they have the ability to get a second test to confirm the results of the first test. They also, depending on what type of product it is, can try to rectify the situation. In other words, if they have a brownie that exceeds the 100 milligram limitation [on THC, the psychoactive substance in marijuana,] they could go back and divide them into smaller pieces and repackage them in order to comply.

So the manufacturers have some options, and so far it's gone pretty well. Most of the manufacturers really recognize that they want to stay clear of the 100 milligram limit, and they really try to keep it well under that amount to make sure they don't have any problems.

GL: What's been the biggest challenge with implementation so far?

RK: From our standpoint, the biggest challenge has been the timelines that were built into Amendment 64. They're pretty aggressive for us in terms of having to put all the regulations and the requirements in place. One example is last year we had to have rules adopted by July 1, and the legislative process didn't conclude until the end of May, which left us about 30 days to put together the regulations for retail marijuana.

So pretty aggressive timeline there. The way that we did it is we adopted emergency rules July 1, and then we went through a more thoughtful process with permanent rule making where we pulled together working groups so we had representatives from all the different stakeholders.

Another example of a tight time frame for us: built into the constitutional amendment was that we had to take licensing action on any business application within 90 days of receipt. That's, again, a pretty aggressive timeline, but we've been able to really develop processes that work for us. Thus far we've not had any one single application that hasn't met that constitutional requirement.

GL: One issue I've heard from lawmakers is the safety of edibles and concentrates. Has anything in particular surprised or concerned you so far?

RK: Well, we had to go with what the legislature adopted in terms of statutes, and that was really the framework that we've built our rules around. Since that time, there have been issues and concerns raised by the General Assembly, as well as challenges surrounding edibles and how you regulate them.

We've put together a working group to really examine that and try to determine if we need to potentially look at serving sizes and limitations on the amount of THC that can be contained in edibles. So we're right now really working through that with a group that has law enforcement, the medical community, youth advocates, and folks in the industry. So we've got really a diverse group of people to really examine if there are some good policy changes that we can make to make consuming edibles a better proposition.

GL: One of the issues is the marketing of edibles. Some people are worried that they might be marketed to children — not even on purpose, but because they can be colorful products. Is that something the working group is looking into as well?

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Justin Sullivan / Getty Images News

RK: We really pushed the envelope in terms of the amendment with our regulations concerning packaging and advertising of marijuana products. One of our number one priorities is to make sure that we protect the youth, so we really pushed the envelope on that.

But that's something we're certainly looking at. We're really more focused the potency of serving sizes and the potency of packages of edibles right now, but that's something that's on the periphery when we're discussing that in the working group.

But the way that we've really tried to address that is through child-proof packaging, which is really stringent in the state of Colorado. Edibles have to be in child-proof packaging and they have to have a child-proof or child-resistant exit package as well.

GL: You mentioned that you were pushing the envelope with the amendment. In retrospect, is there anything in the amendment that's restraining you and making these products riskier? Is there any regulation you wish you could enact but you can't?

RK: I think we're pretty satisfied right now with where we are in terms of the regulatory framework. Certainly there's going to be adjustments over time. You come out with the best laid plans for how you think something's going to work and how the regulatory framework is going to perform, and you're going to have to make adjustments to that. And that's something we're committed to doing: reevaluating things constantly and being adaptable and flexible to, say, "Okay, we thought this was going to be the most flexible to do this. It's not really panning out that way in the real world, so we're going to have to make some adjustments."

But I think overall we're pretty happy with the regulatory framework. We don't see any significant areas of concern. I think that's a testament that we took that started with the Amendment 64 task force with the governor's office. They brought in all these stakeholders to really created a roadmap for the General Assembly when they created the enabling legislation.

Subsequent to that, we followed that same model for rule making and really tried to bring together all the stakeholders that had different perspectives on things, and really tried to address those as best we could in developing the rules. Because of that, we have a comprehensive set of rules that have performed pretty well thus far.

GL: Prior to legalization, there were plenty of warnings about what could go wrong. I remember law enforcement officials in particular warned about a spike in crime, which never panned out. Has there been anything like that since January?

RK: I don't have any crime statistics in front of me right now. But I can tell you anecdotally that the average person would say it was much ado about nothing. I would say that the rollout was extremely smooth, the sky hasn't fallen like some had predicted, and we're moving forward and trying to fine tune this regulatory model.

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GL: I know opponents have warned about a supposed rise in youth using marijuana as it becomes legal. Is that something you're keeping an eye on as legalization moves forward?

RK: The governor's office has taken it as a priority to really ensure that, number one, we have education programs in place to address this issue with our youth, but also to conduct studies to make sure that we're not seeing increases in abuse by our youth. A lot of that is being rolled out right now as we're starting to collect all this tax revenue and a lot of those programs get funded.

So there's a lot of active involvement in terms of, for example, the Department of Human Services, Department of Public Health and Environment, and Department of Public Safety. They're all monitoring it and collecting statistics and data that we'll continue to analyze.

GL: If those studies came back and there was a rise in youth, what could regulators potentially do about that? Are education efforts pretty much the only tool, or is there more that can be done?

RK: I think that we would have to leave that to the policymakers — certainly the governor's office and the General Assembly. I think, obviously, they're very interested in that.

But I think a real key to this is education. Colorado has already started launching campaigns for education with our youth. I think that's the number one priority.

The Division of Marijuana Enforcement is also out there right now doing compliance inspections for underage violations. So we do it very similarly to what they do in liquor regulation where you send in operatives who are underage and try to make them buy product and make sure the industry is identifying those people and not selling to them.

There's another component of education on the industry side. We need to make sure that they know how to identify people using fraudulent IDs, and making sure that they're taking their role very seriously in terms of keeping it out of the hands of kids.

GL: Another issue is how the revenues have come in. I know the governor's office put out some numbers a while back. Have those numbers surpassed or fallen below expectations?

RK: I think, so far, the numbers are not pacing with the original projection.

One of the biggest contributors to that is that, while the state has licensed in excess of 200 retail stores, these businesses can't operate until they also have local approval. Local jurisdictions are slowly rolling out their approvals. So right now we're in the range of 80 to 100 retail stores that are operating in the state, and the state has actually approved over 200 stores.

Retail_marijuana_sales_in_2014

Once those local governments get all their approvals process and we have those stores up and running, I think we're going to start getting closer to what we were initially projecting in terms of revenue.

GL: There are some states now — there's Oregon, there's Alaskalooking to legalize marijuana. What would you tell these states? How would you advise them?

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RK: The best advice I can give them is to take a look at the approach we took to creating the public policy and the rules by bringing together all the stakeholders, making sure that you listen to all the different points of view, and try to get as many different perspectives on things before you actually formulate that public policy to make sure that you've addressed everything. You have to have a balanced approach to it. That's the number one recommendation I would make.

The second thing I would say is make sure you give yourself ample time to roll out and create a regulatory framework. Again, we were able to get it done. But it would have certainly been nice to have a little more time to put things together. Unfortunately the way the constitutional amendment works really drove a lot of those deadlines, so there wasn't a great deal of flexibility.

GL: I have to say that I'm a little surprised just how generally positive you seem. Did you expect legalization to go this well?

RK: Well, you always hope that it's going to go that well. I can tell you that we've had a lot of sleepless nights here. Certainly we expected that there would be challenges, but, like I said, we're very, very pleased with the success that the rollout has enjoyed so far.

Still, you can't let your guard down. You have to continue working on issues. And like I said, we still have more deadlines ahead of us. We have new applications coming in in July, the rollout of the testing. So you never let your guard down.

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