A practical framework for regulating for-profit recreational marijuana in US States: Lessons from Colorado and Washington (2017)

Despite the federal prohibition against marijuana, state-level recreational use appears to be moving forward. Public opinion is shifting. Following well-publicized state-legalization in Washington and Colorado, states across the US have begun considering similar measures. Since the 2016 election, over 21% of Americans now live in places where recreational marijuana is state-legal, and over 63% of the country permits medical or recreational use at the state level. This paper does not consider whether states should legalize marijuana nor does it weigh all regulatory options available to states. Instead, it considers how states can create a practical framework to regulate recreational marijuana, particularly in a climate of federal uncertainty where marijuana remains illegal. We draw lessons from Colorado and Washington - assuming that other states will adopt similar models and employ commercial, for-profit systems. Considering both the variety of goals that states could adopt and how they interact, we offer recommendations in five areas: cultivation, production, and processing; sale, consumption, and possession; taxes and finance; public health and safety; and governance. We recommend that states implement a relatively restrictive regulatory approach, with a single market for recreational and medical marijuana, if appropriate. This should make marijuana laws easier to enforce, help reduce diversion, and satisfy federal guidance. Moreover, drawing from Colorado and Washington's experience, we suggest a flexible system with robust data collection and performance monitoring that supports a thorough evaluation. This should allow states to "learn as they go" - a must, given the uncertainty surrounding such policy shifts. Of course, a tightly regulated approach will have drawbacks - including a significant illegal market. But political experience teaches that states will be better off loosening a tight market than attempting to tighten a loose one. We also consider a potential role for the federal government under the status quo.