Denvers Pot Czar on Legalization Transitioning Dispensaries

Ashley Kilroy, whose official title is the Executive Director of Excise and Licenses with the City of Denver, was the lead on the city’s goal of ushering in legalization policies after the state voted to legalize in late 2012.

Kilroy says that after the state voted to legalize marijuana in 2012, with a start date of January 2014, the city had about 200 unlicensed cannabis dispensaries operating, most of them operating at the time as medical dispensaries.

She and Dan Rowland, Director of Public Affairs, Department of Excise & Licenses for the City and County of Denver, say they took a ‘phased-in approach’ by working with these business to transition or close all of them in time for the implementation of legalization in 2014.

Colorado’s experience was different than the approach being taken by many cities in Canada, Kilroy explains, because of the precedent set by the 2009 US Ogden Memo which was issued by the then-Obama Administration, establishing a federal policy of not targeting legal businesses in states that have established legal cannabis regulatory regimes. This policy helped open the flood gates to these business, Kilroy says, and the city chose to take an approach of managing and transitioning existing businesses, as well as shutting down un-cooperative ones.

“The question of what you’re going to do with those business who are already up and running, that’s really a policy question,” says Kilroy. “The way we did it is we sent a letter in April of 2013, with a deadline of being licenced by July 2013. It said you have to be licensed by the deadline, or you will be an illegal operator, subject to criminal penalties.”

By working with these business and providing information online and through workshops, etc, she says the city was able to achieve nearly full compliance by their target date of July 2013, with only two unlicensed businesses still open on June 30, 2013.

“Frankly this is uncharted territory, we’re going to have to monitor it and see how it develops. The experience of other jurisdictions such as the US has shown us that it is better to start with strong controls and evaluate the system over time.” -Ontario Finance Minister Charles Sousa

“Frankly this is uncharted territory, we’re going to have to monitor it and see how it develops. The experience of other jurisdictions such as the US has shown us that it is better to start with strong controls and evaluate the system over time.” -Ontario Finance Minister Charles Sousa

While she and Rowland say they understand the difference in the approach being taken in Canada versus Colorado, they both agree that working with cooperative, established businesses has helped the city have what they consider a successful approach thus far.

“If you’ve got people operating in a grey area but are arguably good actors because maybe the cops haven’t been called there, there haven’t been any underage sales, they are in an appropriately zoned area, can pass the criminal background checks…. our opinion was those were good operators and we allowed them to be licensed and be legal business owners,” says Kilroy.

But this approach will be different for every jurisdiction, says Rowland. Denver was the first city to take on these issues and while their approach might not be perfect, they say they do their best to learn from the process and refine it as they go.

“Our MO in our office is that there is no road map for this,” says Rowland. “We’re going to make the best decisions we can and keep a really close eye on it and be flexible and be nimble and change where we need to, be moderate and cautious at times when we roll things out.”

“We’re making the best decisions we can with limited information, making sure we’re keeping an eye on it and being ready to make a change here and there when we need to.”

These sentiments were echoed Friday by Ontario Finance Minister Charles Sousa who, in announcing the province’s plan to unveil numerous government stores while shutting down unlicensed dispensaries.

“Frankly this is uncharted territory, we’re going to have to monitor it and see how it develops,” said Sousa. “The experience of other jurisdictions such as the US has shown us that it is better to start with strong controls and evaluate the system over time.”

One of the key issues for Denver, Rowland says, has been to make sure the city receives the funding necessary to manage that system. The city of Denver has a 3.5% sales tax which the city uses to pay for a staff of about 60 new employees to help them manage marijuana in the last three years, not to mention those existing employees asked to bring cannabis management into their workflow.

“If you’ve got people operating in a grey area but are arguably good actors because maybe the cops haven’t been called there, there haven’t been any underage sales, they are in an appropriately zoned area, can pass the criminal background checks…. our opinion was those were good operators and we allowed them to be licensed and be legal business owners,” – Ashley Kilroy, Executive Director of Excise and Licenses with the City of Denver

“If you’ve got people operating in a grey area but are arguably good actors because maybe the cops haven’t been called there, there haven’t been any underage sales, they are in an appropriately zoned area, can pass the criminal background checks…. our opinion was those were good operators and we allowed them to be licensed and be legal business owners,” – Ashley Kilroy, Executive Director of Excise and Licenses with the City of Denver

“I don’t think we’ve gotten everything right straight out of the gate,” says Rowland, “but I feel fortunate we’ve been appropriately funded.”

Both Kilroy and Rowland have consulted extensively in Canada, with Kilroy speaking last year at the 2016 Association of Municipalities of Ontario (AMO) conference. The AMO, like many other municipal organizations, has long stressed the need for a coordinated effort with all levels of government to ensure municipalities are not saddled with all the costs of legalization (but none of the revenue).

The AMO released a statement today in response to the Ontario announcement, saying it has been working closely with municipalities and the federal and provincial governments on how to implement the safe, legal sale of marijuana since April 2016.

While no specifics have been released yet, Calgary Mayor Naheed Nenshi recently stated that Calgary is ‘advocating for a system of retailers that looks like the liquor store system but not existing liquor stores’ and that the city sees no need to manage home production of up to four plants.

“One of our key concerns has been local influence on where retail outlets are located in our communities,” said AMO President Lynn Dollin. “Under a provincial Crown Agency, the rollout of storefronts must begin with willing municipalities and a municipal voice on where the drug is sold to ensure community safety.”

This is a sentiment echoed by numerous municipalities across the country. The Union of British Columbia Municipalities (UBCM) released similar resolutions last year at their annual convention, and have scheduled similar ones for this year’s meeting starting Sept 25th in Vancouver.

The UBCM says they are preparing an executive resolution for debate at the 2017 convention that will seek to provide direction to members in expectation of what is described as “an intensive twelve months of consultation in development of the made in BC approach.” This will be intended to complement the two resolutions passed in 2016 that asked for more local control in the decision making process surrounding legalization and the tax revenue streams for legal cannabis.

Like Ontario, British Columbia has an extensive, established dispensary network, but unlike cities like Toronto, some major BC cities like Vancouver and Victoria have opted to try and regulate and transition dispensaries, similar to the approach taken by Denver.

British Columbia has yet to release their own plan for legalization, although they have established a Cannabis Legalization and Regulation Secretariat and Project Lead and are in the process of hiring more staff for the ticket. An announcement from BC is expected by UBCM’s annual meeting later in the month.

The Alberta Urban Municipalities Association (AMAU) released a public survey in June on legalization and has recently stressed the need for proper funding to manage legalization in their 2018 budget request to Alberta.

AUMA’s President, Lisa Holmes, will be speaking to the House Standing committee on Health Friday, Sept 15th at a two hour panel on how legalization will impact municipalities. Jodie and Marc Emery of Cannabis Culture, along with Brock Carlton, the CEO and Bill Karsten, Second Vice-President of the Federation of Canadian Municipalities will also be discussing municipal issues with the committee.

FCM released a cannabis legalization primer for municipalities to prepare for legalization.

Tax revenue aside, Rowland says working with local communities to find what works right for them is also key. About 70% of counties and municipalities in Colorado initially opted out of legalization entirely, he says, and those that opt in need to prepare for how that will impact them as well.

“Regardless of how much they get (in tax revenue),” says Rowland, “it’s important to be establishing those points of contact within the municipal government to figure out what makes sense for their individual communities.”

“A lot of cities and counties in Colorado opted out. The places that do opt in, need to have local control over where these places can go, what their hours of operation will be, what the playing field will look like… those are specific to individual communities. Even in metropolitan areas, the suburbs one from another might feel differently about this, so giving those locals the ability to craft regulations that make sense for the people that live in those communities is really important.”

Andrea Dobbs, co-owner of The Village dispensary in Vancouver, which has been making its way through the city’s Medical Marijuana Related Use (MMRU) licensing process, says she’s concerned that Ontario’s approach will only serve to strengthen the divie between the legal and illegal market, rather than helping illegal businesses become legal.

“My concern is that they will not receive buy in, the criminal element will become more deeply entrenched and access will become cloudy and inconsistent. It’s a very crude approach, in my opinion, and not in the spirit of collaboration, innovation or sustainable economic growth, nor is it about looking out for the people who use cannabis as a medicine.”

“I appreciate that they are doing stand alone shops that are going to be cannabis specific and not combined with alcohol,” Dobbs continues. “I appreciate that their intentions are potentially about rolling out a program that is government run and not about competition in the marketplace. That is my with my biggest heart centred lens focused on the decision. Outside of that I am very saddened by the decision. I feel like it’s a short cut and it is a solution that allows the government to do the most with the least communication.”

Featured image by ErgoSum88.

Source: Lift Cannabis