The Stoner Asks John Hickenlooper About Pot-Tax Holiday — and Cheetos

On September 16, and September 16 alone, the state will not collect the 15 percent retail marijuana excise tax — a tax holiday that could reduce state revenues by as much as $3.7 million, but greatly increase the happiness of Colorado’s cannabis consumers. When Amendment 64 passed, Governor John Hickenlooper cautioned people not to “break out the Cheetos or Goldfish too quickly.” Now, nearly three years later, is the time finally right? To find out, the Stoner sat down with Governor Hickenlooper and Andrew Freedman, his director of marijuana coordination, to talk about the state of cannabis in Colorado.

The Stoner: Explain the marijuana tax holiday.

Governor John Hickenlooper: We figured we needed a celebration — just kidding. The tax on recreational marijuana will go off for a day because the language of the constitutional amendment tied to TABOR calls for a second reauthorization.... I don’t think anyone outside of four people understands this.

Andrew Freedman:
The tax has to turn off because we [the state’s Blue Book] underestimated our non-marijuana tax revenue.

It’s just good enough to be bad.

You initially opposed Amendment 64, and right after its passage warned that it wasn’t time to break out the Cheetos and Goldfish. Is it time now?

I think a lot of us looked at it back then as a very steep hill to climb to create a regulatory framework that would simultaneously protect kids, make sure driving while impaired didn’t increase, maintain our level of public safety, and also eventually exterminate the black market. All worthy goals — but trying to create a regulatory system when you’re in conflict with federal laws isn’t easy. It’s no fun. Banking, for example. We’re unable to find any avenue into banking. No checks, safety deposits, charge cards — anything that makes it easier to regulate an industry. An all-cash industry is an invitation to corruption.

"Trying to create a regulatory system when you're in conflict with federal laws isn't easy."

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How often do other politicians ask you about marijuana?

It’s the first thing they ask: How is “it” going? How are you dealing with edibles? Are you letting them have marijuana candy? Are you keeping that out of the hands of kids? We’ve gone a long way in building up the system. We’ve put more muscle on the skeleton than most of us thought we could do this quickly. Ramp-up speeds have been very fast.

What advice do you give those politicians? And how has it changed since Amendment 64 was approved?

Hickenlooper: I first tell them to wait, we don’t understand the unintended consequences…. If I’d had a magic wand the day after, I probably would have reversed the vote. Now I look at how far we’ve come, and I think there’s a real possibility that we’ll have a system that works…if you eliminate the black market, make it harder for kids to get marijuana. We can put more money into education for kids.

How would you compare how Colorado has handled regulating marijuana to other states?

Hickenlooper: In some ways we’ve done better, in other ways not. With Washington state, there were a lot of things we’ve done here that they’re envious of, and vice versa. As Louis Brandeis says, states are the “laboratories of democracy.” States need to create their own systems. We’re watching what Washington is doing; we try to harmonize. My guess is that our regulatory environments will become increasingly similar.

What’s been the biggest challenge?

Hickenlooper: The hardest part is that you’re having to negotiate with an industry that’s being created even as it constantly evolves. It has its own self-interest, and the primary point isn’t public health. They want to be safe, but they also have a business to run. We’re moving so fast that the rate of change often builds to almost a necessity of conflict.

What about the recent pesticides issue in Denver?

Science is complicated in terms of different pesticides, how they might be taken into a plant. Complexity of plant growth is tied into how different chemicals might affect the health of a human. There’s just a preliminary list. The science isn’t perfect, but we’ll get to a point where we recognize which pesticides we use are effective but don’t pose any risk.

We rely on the federal government. We are erring on the side of pesticides that are safe for consumption.

What’s the one thing people outside Colorado should know about recreational marijuana here?

Most people who were not smoking marijuana before it was legalized still don’t.

What’s the one thing people inside Colorado should know?

Most people who were not smoking marijuana before it was legalized still don’t.

Is how much attention marijuana gets an issue?

People read about one failure of the system — a tragic accident — and they don’t see the context. There are tragic accidents every day, everywhere: accidental deaths, prescription-drug abuse — over 1,000 people died from that last year. No one cared, but if someone died from overdosing on marijuana, it’s on the front page of the newspaper. It would serve people better to have a sense of proportion. The sky isn’t falling. People thought it was the end of civilization as they know it. It wasn’t: The sky is mostly still up there with the stars and the clouds.

The state budget is about $26 billion, and [the marijuana business] is $100 million this fiscal year; to date, $120 million. It’s a very small part of our budget. In terms of a cost effort, and certainly in terms of prison time, it’s even smaller. We’re not sending people to prison for having marijuana now. Yet it’s the first thing I’m asked about every time I’m out of state. We’ve made progress, but there’s work to do. There’s not enough study on kids and how their attidudes are changing toward marijuana. We’ve got to be able to measure that in our state and look at other states that haven’t legalized and see if there’s a difference.

Do you have a favorite late-night joke about Colorado and cannabis?

Hickenlooper (after some conversation around the table — there have been a lot of jokes): Jimmy Fallon said, “Those folks in the stoner state of Colorado — they’re so high, they can’t even spell Hickenlooper anymore.”

After talking with the governor, The Stoner moved on to the bunker-like space in the Colorado Department of Revenue building that Freedman shares with deputy director Skyler McKinley and a couple of interns. Both Freedman and McKinley are Colorado natives whose jobs in the brave new world of legalized marijuana make them the envy of their friends — even if their workspace is lacking. In Freedman’s office, we asked some follow-up questions, starting with the fact that the marijuana tax holiday is a one-time fix. On the November ballot, Coloradans will be asked to again vote about marijuana — this time, on a proposal that asks if the overall state tax-collection level can be increased so that Colorado can keep marijuana taxes that have already been collected.

The Stoner: Too much tax money for TABOR?

Andrew Freedman: It’s a request to retain money we’ve already collected — $40 million for schools, for empirical programs to help kids…. All of this is going to be learning money for Colorado. It’s a little bit of a nuance — not that we came in too high, but we collected too much from July 1, 2014, to this July. Proposition AA in general is going to be confusing to people.

Are counties and towns on the border more hesitant with legal marijuana because of neighboring states?

Freedman: There are great stories of some small towns making $100,000 they wouldn’t have had before. Others want no part of it, probably due to cultural differences. There’s the potential to tear those communities apart. That’s what you’re seeing.

What have you been taking into consideration for fighting pesticides and ensuring quality control in the marijuana industry?

Freedman: The label is the law. From the beginning, from day one, if you’re using a pesticide that is not labeled for sufficiently broad enough use that you could use it on marijuana — say, all indoor crops — then you are breaking the law. All of that is part of the process. What we’re trying to do is get out there and be proactive. Put money in as education for growers; it’s really confusing both for growers and state government to do on their own. Most of the time the state agriculture department just has to look at the label, tell the USDA or the EPA.... Now we’re learning how to do all those.

"Most people who were not smoking marijuana before it was legalized still don’t."

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Denver Environmental Health took matters into its own hands in March by quarantining eleven commercial grows for pesticide use. Is the state taking a similar stand?

Freedman: Denver was first out of the gate to really try to do that, led by firefighters and others over safety issues. Again, we’re enforcing throughout the state.

Do you have enough staff for that?

Freedman: We have the same as exist for every crop. What doesn’t exist yet is the culture of what’s right and wrong for growing. That’s why we threw in education.

What’s the biggest challenge of operating in a fish bowl with something new like legal marijuana?

It’s a strange combination: We are doing it for the first time, and people are hyper-aware of what we’re doing. Part of what our office has discussed is, we have to be willing to make mistakes as long as we’re working in the best interest of public health…. We’re willing to take the brunt, mold it and remold it, even though the industry is up and running.

Is there anything about the industry that has surprised you?

Freedman: What’s continued to surprise me is that with the industry, they’re better self-regulators than we thought they would be. For the most part, the actors in this want heavy regulation; they see it as a way to make their industry legitimate and not go away overnight. It’s not this typical tension of we’re big, bad government.

How has your job changed as more money, buyouts and chain businesses come into Colorado marijuana?

Freedman: It’s a pretty explicit, market-based system here. With LivWell, there are fewer actors we have to deal with. But less competition means some people get more powerful. We’ve not made it our role to decide who are going to be the winners and losers.

How closely is your department following Denver’s Limited Social Marijuana Consumption Initiative? Do you think other cities will follow suit if it passes?

Freedman: We’re monitoring it very closely. Obviously, what happens in Denver has a large say on what happens in the rest of the state. Are we accidentally pushing people to edibles because there’s no place to consume? Are we pushing people to the streets? We respect the people doing it, but worry about any system that allows for poly-drug use — a beer in one hand, joint in the other. I worry about establishments with under-age use. I also think there seems to a feeling that people have a right not to be around marijuana — that this might force people to be around marijuana who don’t want to be. (Editor’s note: After this interview took place, proponents of the limited-consumption initiative withdrew it from consideration to redraft a measure that “reflects the interests and concerns of all stakeholders.”)

What is the status of Oklahoma and Nebraska’s lawsuit against Colorado for legalizing marijuana? And the lawsuit headed by Colorado sheriffs for violating federal law?

Freedman: With the Nebraska/Oklahoma case, we’re still waiting for the U.S. Solicitor General. For the rest, we’re all working together to make sure they go away.

So do you drive or fly through Nebraska?

In fifth grade, I learned my big crush didn’t like me at all, and I spent the next thirteen years avoiding eye contact. I fly over.

What do your peers, friends and family think about your job?

Most of my friends are miserable lawyers. To them, I’m definitely winning the day. A little cousin wants to know if I can smoke pot every day. It’s an incredibly interesting job.

What should people know about the day-to-day of Colorado’s marijuana administration?

One of the things Colorado should be really proud of is, everyone has gotten involved in making sure this really works. We meet regularly with the Colorado Association of Chiefs of Police; they take it very seriously. We meet with parents in Smart Colorado. The governor’s office is very proactive. The more people joining the conversation, the better. Sometimes we think it’s silly how much attention it’s getting, but it’s helping get us through, helping to have an engaged electorate who’re far more nuanced than we ever thought they’d be.

What programs has Colorado spent its pot money on so far?

"For the most part, the actors in this want heavy regulation; they see it as a way to make their industry legitimate and not go away overnight."

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Freedman: The very first thing we do: put it to regulation, make sure it pays its own way, the Marijuana Enforcement Division is fully staffed. Then we put it to public safety and youth prevention, like the new prevention campaign,“What’s Next.” There are start-up costs that we’d like to see go down. We’d like to put more money to addiction treatment in general. We would love to see that if a substance is ruining someone’s life, we have the money to put it back on track.

How do you feel about the first 21 months of legalization?

Freedman: How’s the rollout going? Much better than we anticipated, because of the law of unintended consequences. A year and nine months later, we can see that those have not been nearly as bad as we thought. But the other questions, about public health, are longer-term. If people consume marijuana, they don’t drink as much; that’s not really proven yet. And what happens to kids? How do you stop those ’60s Big Tobacco campaigns? Every year, we’ll have to ask ourselves, how are we doing?

Does Colorado’s reputation extend further than America?

Freedman: When I first got this job, I was on vacation in Uganda. Someone asked where I was from, I said Colorado, and they said, “Oh, marijuana.” I knew this was going to be a crazy job…. I think Colorado deserves to be branded for much more than marijuana legalization.

Do you learn anything by talking to other legalized states?

We talk to Washington state once every month. Now Oregon is joining. We met with Alaska, D.C. We learn a lot of things. I do think Colorado went out fastest on this; we just had a more robust industry from day one. But then, they also turn around and say, ‘Here’s what we did on edibles.’”

Can anything be done about banking, or the lack thereof, in the marijuana industry?

Freedman: Banking has been the most crazy and frustrating part of it. It’s a public-safety issue, and we’re trying to keep it very legitimate, out of the hands of organized crime. The governor points out how in Prohibition, it was not alcohol that created Al Capone, it was cash. We worry about that.

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