Medical marijuana regulations: Q&A with Matt Cook, the man behind the rules

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One of the main people to thank -- or curse -- for Colorado's new medical marijuana regulations is Matt Cook, senior director of enforcement at the Department of Revenue. Cook, who worked closely with legislators developing the rules, is now in charge of enforcing them and will be helming the rule-making process that will finalize the regulatory scheme.

It's hard to imagine a better person for the job.

In his long career, Cook's been through DEA school, worked as a jack-of-all-trades license enforcement officer in Colorado Springs and helped run the DOR's enforcement bureau. Although the way things are shaping up, regulating medical pot may be his toughest task yet.

Westword recently sat down with Cook for a chat. Here's what came out:

Westword (Joel Warner): Why was the oversight of dispensaries -- now known as medical marijuana centers -- removed from the Colorado Department of Public Health and Environment (CDPHE) and placed under the Department of Revenue?

Matt Cook: It was a public-policy decision for it to come here. I can rationalize it, though. Obviously, we have a very good regulatory enforcement reputation with legislative bodies, local government and the citizens of Colorado. I think I would also say they didn't really take it away from the health department. I think what they did is decide, here are the issues pertaining to the doctor-patient relationships, those are best referred to the Board of Health -- and here we have an industry that engages in business practices, that needs regulations, and the Department of Revenue has the background to do it.

WW: What is unique about regulating medical marijuana?

MC: Other than the fact that it is a schedule I controlled substance, I guess something that is different is this product needs to be tracked from seed to sale. So how do we do that? We decided the way to do that is to account for virtually every gram of this product from the point it's put into the ground until its put into the hands to the customer. If they pull a plant that weighs a pound, you have to account for a pound of product. All of it will be under video surveillance, so I can manage the integrity of the process.

WW: How did you do your homework on all of this?

MC: I probably know a bit more about it than the industry gives me credit for. I have been going out, meeting with the industry. I need their expertise. I don't pretend to know it all. At the same token, they need mine. For the most part, the industry has really welcomed us with open arms. They see this as validation of a new business.

WW: Have the very short deadlines built into the new law proved problematic for the industry?

MC: The timeline was a public-policy decision. Yes, the industry is scrambling, but we are also scrambling. I have no pens, no pencils, no staff, no cars, no desks, no chairs, nothing. The Medical Marijuana Enforcement Division started on July 1. Our application forms were put out on July 6. In a sense, we created them in six days. We are doing the best we can, and so is the industry.

WW: Why only allow dispensary owners to operate a grow facility? Why not allow independent grow facilities?

MC: That was a public-policy decision. From a regulatory standpoint, it's just another widget. Could we regulate a wholesale grow facility? You bet we could. But that's how the legislature decided it was going to be written, and that's how it was written.

WW: Why were dispensaries renamed "centers"?

MC: I have no idea. It's just a widget to us.

WW: What about the high application fees, which range from $7,500 to $18,000 depending on the size of the center?

MC: The law prohibits us from using general fund dollars; it has to be solely from a cash fund. That poses some problems for us. Since this is a new industry, it's analogous to building a house. The costs up front exceed the costs down the line, and right now they far exceed the money we have. All the money we collect from industry fees will be used solely for regulation of this industry. We did get a million dollar loan from the CDPHE, which I have to pay back by December.

Until I know how many licensees are out there, I can't know what my needs will be. I know I will have one agent for every 10 licenses that are out there.

WW: Will these license fees put mom and pops out of business?

MC: I am very sensitive to the small business owner. But if you look at the fee structure, you will see the larger owner pays more than double what the small guys pay. I recognize that even $7,500 is a lot of money. But again, we are building a house at this point.

WW: Is there a lot of confusion and half-truths out there regarding the new regulations?

MC: Until the final rules are drafted, there is a lot of confusion within the industry. Here's an exampled I've been using. The new law says that "A medical marijuana-infused products licensee that has an optional premises cultivation license shall not sell any of the medical marijuana that it cultivates." If you read it explicitly, it means you can grow it but not sell it. That's not what they meant. They meant a MIP licensee shall not sell the raw marijuana it produces for its products. Knowing what was intended, it's very easy for me to suggest a rule to the industry that will comply with the intent of the general assembly.

WW: What will the rulemaking process entail?

MC: I've already put together how the working groups are going to be formed under the Department of Revenue. Patient advocates, MIP licensees, grower operators, center operators, local and state government, local and state law enforcement, and the legal profession will all be represented in the process.

The rulemaking process will be at the end of this month or the beginning of next month. I anticipate our rule-making groups will meet for six months, give or take. Then we will do a formal notice and a formal hearing, and everybody will come forward and testify. But having all segments of the industry represented at the table, there should be no big surprises when the hearing is held. They should be very well informed.

WW: Could these regulations and the enforcement framework you're building work for legalized marijuana if Colorado were ever to legalize it?

MC: I suppose it could, but we didn't approach it with any foresight that legalization is in the cards.

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