10 Reasons Why The Rollout Of Legal Marijuana Is Succeeding In Colorado

In January 2014, the bulk of Colorado’s constitutional amendment (Amendment 64) to legalize recreational marijuana went into effect. New research from Brookings expert John Hudak shows that while challenges still lie ahead, overall the state has done a great job rolling out a legal marijuana system. Here are 10 reasons why this new system is succeeding in Colorado:

1. Gov. Hickenlooper created a task force to help implement Amendment 64.

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Though Colorado Gov. Hickenlooper formally opposed the legalization of marijuana in his state, he recognized that the “the voters have spoken, and we have to respect their will.” To do this, he established a highly successful task force to recommend legislative approaches and manage the implementation of legalized marijuana.

2. From the top down, state leadership has been committed to the marijuana legalization process.

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Gov. Hickenlooper successfully communicated to state workers, appointees and career staff that regardless of personal opinions, the job of the state was to implement the will of the voters. This active commitment helped ensure that state workers and agencies successfully carried out their constitutionally required mission.

3. The state created a new Director of Marijuana Coordination position.

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In an effort to promote improved coordination and leadership on the marijuana issue, Gov. Hickenlooper created and filled the new position of state Director of Marijuana Coordination. Andrew Freedman took this post in February 2014, and meets with key policy staff twice a month to coordinate policy issues.

4. A new state Marijuana Enforcement Division was established.

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In preparation for the rollout of Amendment 64, the state legislature passed a bill that led to the creation of the new Marijuana Enforcement Division (MED), which oversaw the implementation and regulation of both medical and retail marijuana in the state.

5. And that regulatory agency is being funded by legal marijuana sales.

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Tax and fee revenue from legal marijuana sales are helping to fund MED and are also being distributed to other public policy areas.

6. Smart tracking systems are helping to enforce regulations.

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Seed-to-sale tracking systems are assisting regulators in enforcement and are helping ensure that legally grown marijuana makes it into retail stores.

7. Growers are connected to dispensaries.

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The state implemented a market that is initially vertically integrated, so each retail dispensary must be owned by the same enterprise that grows the product. This is helping to reduce early regulatory challenges.

8. Established growers are the foundation of the new market.

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The new market includes temporary barriers to entry for new participants, and currently favors existing medical marijuana firms that regulators are already familiar with.

9. Strict purchase limits are being enforced.

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The state is limiting the amount of marijuana that can be purchased at one time, and has set different limits for Coloradans and tourists. This is helping to discourage marijuana’s resale on the Colorado black market and its transfer to other states.

10. Growing and retail operations are being monitored by video.

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The state has enacted extensive requirements for video surveillance at both grow operations and at marijuana dispensaries.

Despite these impressive early implementation efforts, Colorado is still facing some major challenges.

First, the sale of marijuana edibles has generated some concern regarding inconsistencies in serving sizes, packaging, and potency. Small edibles sometimes have multiple servings and inconsistent levels of THC in them, making responsible consumption more challenging.

Additionally, the constitutional amendment that allows Coloradans to grow up to six marijuana plants at home (aka "homegrows") is presenting challenges surrounding regulation, product diversion and growing conditions.

And finally, the state has misaligned incentives in areas of taxation and tourism that can and have led to unintended consequences. Differences in tax rates between medical and retail marijuana have not motivated gray-market medical users to switch to retail, as was hoped.

Read the full Brookings report from John Hudak on Colorado's implementation of cannabis reform here.