By Reid Wilson – 02/01/17 06:00 AM EST
State regulators and government officials involved in crafting rules for the budding legal and medical marijuana industry are going to pot.
In a sign that the budding marijuana industry is moving away from the fringes and into the political mainstream, into the political mainstream, a number of officials once tasked with managing the growing legal cannabis sector are leaving their government positions to take jobs in the sector.
Many are advising states and cities as voters loosen marijuana restrictions across the country. Others are becoming industry advocates, lobbying the former colleagues and coworkers they left behind to craft more favorable rules and regulations.
In Colorado, Andrew Freedman, once the state’s director of marijuana coordination, and Lewis Koski, who headed the state Marijuana Enforcement Division, teamed up to form a consulting firm that advises local and state governments on crafting new marijuana regulations. Laura Harris, Koski’s predecessor at the Marijuana Enforcement Division, took a post this month as director of the Colorado Cannabis Chamber of Commerce.
Manny Munson-Regala, who oversaw Minnesota’s medical marijuana program, now runs a consulting firm of his own. John O’Brien resigned his post overseeing New Jersey’s medical marijuana program to take a job as chief compliance officer of a New York cannabis company. And several former top officials at Washington State’s Liquor and Cannabis Board have left in recent years to form their own firms.
“That’s how America works. You work for the government, then you become a lobbyist,” said Ian Eisenberg, a leader in the legal marijuana industry who runs Uncle Ike’s, a dispensary in Seattle, Wash. “I don’t think it’s any different than the defense industry.”
Those who have made the jump from the government sector to the private sector say they offer a valuable service, both to governments that need to establish new rules and to the businesses that need to navigate complex regulatory schemes that have never been implemented before.
“We’re the only ones to have stood this up before,” said Freedman, who now consults with governments looking to set up their regulatory structures. “There’s a real opportunity to come in and show lessons learned quickly.”
The comparison between legal marijuana and the defense industry is apt: North American consumers spent $6.9 billion on legal cannabis products in 2016, a figure that is expected to grow to $21 billion by 2021, according to an analysis by Arcview Market Research, a leading industry observer.
“This is an industry that ultimately is going to be, in gross revenues, what, eleven figures,” said Rob Kampia, co-founder of the Marijuana Policy Project. “Wouldn’t you rather have the most well-informed people in the private sector and the government sector actually knowing what they’re talking about?”
But opponents of legalized pot, and some government transparency groups, say the relationship between the marijuana industry and its regulators should be treated like any other.
“The revolving door from government to private sector isn’t anything new, but it represents the worst of our politics. This isn’t the paper clip or oven mitt lobby, this is the drug lobby,” said Kevin Sabet, who heads Smart Approaches to Marijuana, a group that opposes legalization. And we know that the pot lobby wants to make money, just like big tobacco executives do.”
Aaron Scherb, legislative affairs director at the government transparency group Common Cause, said states should implement a cooling-off period between the time when a regulator leaves government service and when he or she begins working on behalf of the industry.
“These individuals are the most familiar with the rules and regulations of a particular industry, and their experience means they’re able to exploit loopholes,” Scherb said. “At least some minimal amount of time is appropriate so we can avoid this revolving door problem.”
At least one state, Minnesota, required its regulators to take a year off before returning to work in the field they oversaw. Munson-Regala, the former head of the state’s medical marijuana program, said that reminded him of other industries he helped regulate, like the insurance business.
“Embedded in that one-year cooling off period was an understanding that regulators are in a good position to help folks who are being regulated, in part because they understand what it takes to be compliant,” Munson-Regala said in an interview.
The revolving door is just one of the ways an industry that was once seen as the domain of hippies is trying to professionalize. Just a few years ago, proponents of legalizing marijuana brought 1970s-era stoner icon Tommy Chong to Capitol Hill to woo lawmakers.
Today, Chong is gone, replaced by a booming industry of cultivators and retailers — and the trade shows, consultants and lobbyists who offer services to boost their business.
On Tuesday, the National Cannabis Industry Association kicked off a two-day Seed to Sale trade show in Denver, focusing on business practices for producers and retailers. The group’s first trade show several years ago attracted 800 participants; this year, they expect 2,000 vendors — and 4,000 to 5,000 at the annual Cannabis Business Summit and Expo, said Taylor West, the group’s deputy director. In November, 10,000 people showed up to another trade show in Las Vegas.
“This industry is not slowing down,” West said.
Around the country, hundreds of lobbyists are already bending lawmakers’ ears on marijuana measures. In Colorado alone, 81 lobbyists reported advocating on marijuana proposals before the state legislature, according to data filed with the Secretary of State’s office.
Recreational marijuana use has been legal in Washington and California since 2013. Voters passed legalization measures in Alaska, Oregon and the District of Columbia in 2014, and in California, Nevada, Massachusetts and Maine this year. On Monday, Maine’s legalization measure became law.
Marijuana is now legal to possess and consume in the four states where voters passed legalization laws this year. But purchasing and selling marijuana and cannabis edibles are on hold until regulators come up with rules governing everything from production to retail — what the industry calls Seed to Sale.
Most states have a year, under ballot measures passed in November, to implement their new structures. And as regulators move to create those rules, they will receive plenty of input from those who structured systems in other states.