A new Brookings Institution
report gives Colorado high marks for its regulation of the
state’s newly legal marijuana market. “The rollout…of legal
retail marijuana has been largely successful,” writes Brookings
fellow John Hudak. “The state has met challenging statutory and
constitutional deadlines for the construction and launch of a
legal, regulatory, and tax apparatus for its new policy. In
doing so, it has made intelligent decisions about regulatory needs,
the structure of distribution, prevention of illegal
diversion, and other vital aspects of its new market.”
There is no question that Colorado’s rollout has been a lot
smoother than
Washington’s. But some of the things Hudak admires about
Colorado’s approach seem like mistakes to me. He views mandatory
vertical integration (which expires in October) and the exclusion
of new retailers (which does not end until 2016 in Denver, the
center of the industry) as ways of limiting diversion and
reducing the state’s regulatory challenge. To me these rules look
more like blatantly protectionist measures that exemplify
regulatory capture.
Hudak does acknowledge other shortcomings of Colorado’s system.
He notes that the new marijuana taxes encourage recreational users
to pose as patients, for example, and that
restrictions on consumption encourage tourists to buy edibles,
which can result in
unpleasant overdoses if they are not accustomed to this route
of administration. “When it comes to edibles,” he observes,
“tourists tend to be naïve users—the highest-risk group.”
Hudak counts regulation of edibles as one of Colorado’s
remaining challenges, arguing that consumers do not currently
receive adequate guidance regarding appropriate doses:
In my own trip to a retail marijuana dispensary, I observed a
couple interested in purchasing a marijuana brownie. The
“budtender” explained in detail to the buyer that the
brownie contained six servings and that proper consumption
involved dividing the brownie or biting off a small chunk. The
information was correct and clear, but who eats a sixth of a
brownie or a quarter of a candy bar? Moreover, people who
smoke, dab, or vape marijuana experience the effects quickly.
However, edibles can take 30 to 60 minutes before the consumer
feels a “high.” As a result, an individual—particularly one
unfamiliar with marijuana edibles—may overconsume, believing the
product is ineffective.
In my experience, the lag can be even longer than Hudak
suggests, and he is right that the idea of eating just a piece or
two of a brownie, cookie, or candy bar is counterintuitive,
although all products have labels that indicate the total amount of
THC and the number of 10-milligram servings the package contains.
Yesterday the Department of Revenue’s Marijuana Enforcement
Division (MED) unveiled
new regulations aimed at addressing this issue. Instead of reducing
the limit on total THC per package (currently 100 milligrams for
the recreational market), the MED wants to require that all
products be readily divisible into 10-milligram doses, an approach
that makes more sense in light of consumer diversity.
While 10 milligrams may be plenty for new or occasional
consumers, regular consumers typically will want a lot more. Edible
makers were already responding to this diversity—for example, by
offering
single-serving, low-dose products for newbies and packages
containing
10 single-dose candies that might appeal to both occasional and
regular consumers. Given options like those, the new rule, which
amounts to a ban on products like 100-milligram truffles (since
they are not easily divided into 10 servings) seems unncessary. But
at least it will not interfere with consumer choice as much as
arbitrarily limiting all packages to 10 milligrams of THC, as Gov.
John Hickenlooper suggested, would have.
The new regulations—which are scheduled to take effect in
November, following a public comment period—also require that all
single-serving edibles come in child-resistant packaging. Currently
retailers are allowed to put them in child-resistant “exit bags”
(above right) instead. The change does not make much sense to me.
If anything, a multi-serving package poses more of a potential
hazard to children once it’s removed from an exit bag than a
single-serving package does. More generally, the MED’s persnickety
packaging prescriptions are hard to justify given that there are no
such requirements for alcohol, a drug that is much more dangerous
in the hands of children. Instead we rely on parents to keep
alcoholic beverages (along with lots of other potentially dangerous
products) away from their kids. Such disparate treatment seems to
contradict
Amendment 64, Colorado’s legalization initiative, which
promised to “regulate marijuana in a manner similar to
alcohol.”
Hudak does not delve into that issue, but the report is full of
details that will fascinate anyone with an interest in topics such
as policy implementation, stakeholder inclusion, internal
coordination, and inventory tracking. To me, the really exciting
aspect of all this regulatory information is that Colorado has
succeeded in making marijuana boring by making it legal.
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