One afternoon last February, a group of policymakers hand-selected by Colorado’s governor sat in a public meeting room in Denver and took up the subject of marijuana gummy worms.
Should marijuana gummy worms, which look like the old-fashioned penny candy but come laced with cannabis, be outlawed? If not, how should they be differentiated from the kid-friendly, nonmarijuana kind? Should marijuana gummy worms come only in dull, unappealing colors, as someone suggested—should they, in other words, be more worm-like? And how should the potency of these worms be measured and labeled? What if some worms are more potent than others? What if the tail is more potent than the head?
These are the sorts of questions the state of Colorado has been struggling with since its voters passed Amendment 64 in November 2012, putting the state on a fast track to doing something no polity has ever done before. On Jan. 1, Colorado will become the first state in the modern world to legalize marijuana from seed to sale. (Uruguay voted on Tuesday to legalize pot, but the law won't be implemented for 120 days. In the Netherlands, marijuana is simply decriminalized, not legal. While Washington state legalized marijuana at the same time Colorado passed Amendment 64, its regulatory system likely won’t be up and running until next summer.) That means Colorado’s lawmakers, businesses, and citizens are facing issues no one has tackled before. How do you legally produce marijuana? What procedures should be put in place for its packaging, transportation, sale, and taxation? How do you keep track of all that pot, and how do you discipline those who run afoul of your regulations? How do you regulate the financing of pot operations, the development of peripheral businesses, the marketing of marijuana to tourists? And how do you keep the whole thing from falling apart? In short, how do you build an entire industry from scratch?
Over the next two months, as Colorado’s legal pot industry opens for business, the two of us—Sam Kamin, a University of Denver law professor, and Joel Warner, a local writer—will look at how Colorado is answering these questions, with the world watching and possibly billions of dollars at stake—not to mention the federal government keeping a close eye on everything. Marijuana, after all, remains a Schedule I drug under the Controlled Substances Act, alongside LSD and heroin. That means Colorado has to figure out a way to abide by its voters’ wish to authorize marijuana’s possession, manufacture, and sale without causing the feds to act on the fact that all of these actions are still punishable by up to life in prison.
We’re beginning our coverage with the most important issue Colorado has had to wrestle with so far: How do you build a regulatory framework for pot? All other decisions on legalized marijuana derive from this one. Pretty much every legal good and service is regulated in one way or another—restaurants are inspected, plumbers are licensed, sodas have to list their ingredients—and marijuana is a psychoactive substance, like cocaine, alcohol, and sleeping pills, so clearly there have to be rules about how it’s used. Even marijuana’s most ardent proponents concede there have to be limits on its sale and usage—children shouldn’t have access to it, people shouldn’t drive under its influence. But the biggest argument of all for marijuana regulation, from the government’s perspective, is taxation. If the state doesn’t know who is selling it, where they are selling it, or who’s buying it and at what price, Colorado can’t make any money off it.
To determine the best way to regulate this new market, a week after the law passed, Colorado Gov. John Hickenlooper formed the Amendment 64 Implementation Task Force comprised of elected officials, stakeholders in the state’s existing medical marijuana industry, and various experts (including one of us—the University of Denver’s Sam Kamin). It was no easy task, especially since Colorado had just over a year to pick a regulatory model, pass legislation implementing it, conduct rulemaking around it, and go through all the licensing and inspections required to implement it by Jan. 1. Compared to how long most governmental processes take, that was a blink of an eye.
Given such pressures, the state’s best bet, the task force decided, was to borrow from existing regulatory models. But which set of rules were the right fit? What legal substance does pot most resemble?
The most obvious parallel was alcohol. Amendment 64, after all, explicitly invoked alcohol regulation as its inspiration, and its supporters built their campaign around a simple, catchy idea: Marijuana is safer than booze. When the measure passed, many people compared the moment to the end of Prohibition in 1933. But do we really want marijuana to be treated like alcohol? On the one hand, alcohol is carefully controlled, which would prove helpful for marijuana. Sellers have to be licensed, manufacturers must list their products’ potency, and rules are in place to prohibit sales to minors. On the other hand, there’s no single alcohol distribution model for marijuana to emulate. For example, liquor stores operate independently of alcohol manufacturers, and shoppers aren’t allowed to consume purchases on site. But at some breweries, the opposite is true—the beer is produced, sold, and consumed at a single location. So which should it be: pot package stores or pot brewpubs?
And there’s a larger concern with modeling marijuana legalization after alcohol. While Prohibition failed to snuff out drinking and helped fuel organize crime, there’s no denying that in the free-market system that’s flourished since then alcohol use has surged. According to health statistics, today more than half of American adults are regular drinkers, and there are more than 80,000 alcohol-related deaths a year. While there’s no evidence marijuana legalization will produce any sort of similar mortality rate, do we want a free-for-all system that could encourage so many people to regularly smoke pot?
In light of these concerns, Colorado policymakers briefly considered a state-run program, similar to systems in New Hampshire and other states that manage their own liquor stores. This approach had several benefits. For one thing, studies show that state-run alcohol programs, thanks to their lack of targeted advertising and price competition, lead to significantly less spirit and wine consumption than free-market programs. For another, a state-run dispensary model would allow the state to reap the profits of marijuana sales, rather than just levying taxes and fees.
But even if a state-run marijuana program were theoretically the best approach, it came with a major problem: It would put Colorado in direct conflict with the federal government. It’s one thing to permit and even license a substance that’s against federal law; it’s something else entirely to require state employees, as part of their job, to violate that law.