If voters approve a ballot measure to legalize recreational marijuana for adults, a new state agency will be created to regulate the substance.
The Department of Marijuana Licenses and Control would be tasked with setting up rules and regulations for the nascent retail marijuana industry. The department would also take over regulating medical marijuana, as the ballot measure transfers authority for medical pot from the Arizona Department of Health Services to the new agency.
Proposition 205 calls for Gov. Doug Ducey to appoint a director of the agency, as well as a seven-member commission, three of whom must be “controlling persons of a marijuana establishment.”
The department would be in charge of enforcing laws related to the marijuana industry as well, and the ballot measure gives the department’s enforcement staffers “the power and duties of a peace officer.”
Among the rules the department would need to come up with: tracking procedures for marijuana growth and delivery, security camera requirements, packaging rules for edibles, standards for marijuana employment, ways to prevent sales to people under age 21, and procedures for enforcing the rules the department creates.
Initial funding for the new department would come from DHS’s medical marijuana fund, which has a cash balance of nearly $26 million, according to DHS spokesman Holly Ward.
While critics say Prop. 205 adds to government bureaucracy, proponents say creating the department is the most efficient way to regulate the marijuana industry.
Ryan Hurley, a local attorney who helped draft the initiative, said a separate marijuana agency will be the most streamlined way of handling marijuana licensing and regulation.
“I don’t know that this is really new government,” Hurley said. “These are responsibilities that either DHS would be doing now or the police would be doing separately. So, we’re taking some off of the existing government’s plate and shifting it around in my opinion.”
While the campaign’s slogan is to “regulate marijuana like alcohol,” there are key differences between the two substances and what’s required to regulate them, Hurley said. Other states, like California, have a variety of different government agencies that play a role in medical marijuana regulations, and the same would apply under an initiative to legalize marijuana recreationally on ballots in California in November.
“I think they’ve got like 17 different agencies that have to weigh in on the rules, three or four different licensing agencies,” Hurley said.
A different approach
Prop. 205 differs from other states that already license and regulate marijuana sales in its creation of a new department solely dedicated to marijuana. Alaska, Oregon and Washington state incorporated the mechanisms to regulate marijuana into those states’ existing liquor regulations.
In Washington, the state liquor board was repurposed and is now the State Liquor and Cannabis Control Board. In Oregon, regulations are handled under the Liquor Control Commission, and in Alaska, regulation was initially handled by the Alcoholic Beverage Control Board, though the state Legislature eventually created a Marijuana Control Board to handle the drug. Colorado handles cannabis within its Department of Revenue, where a new division was created to handle marijuana enforcement.
Bruce Barcott, political editor at pot website Leafly and author of “Weed the People,” said the process of setting up regulations for the marijuana industry is onerous. In Washington, the state’s liquor board took longer than expected to come up with rules, he said.
Ideally, the new department will be transparent in its dealings, Barcott said. The Oregon agency tasked with regulating marijuana is “constantly sending me records and files,” and that communication goes a long way, he said.
“What doesn’t work well is where you have essentially a state agency that gets together once a month, passes new rules and doesn’t tell anybody about it,” Barcott said.
While Prop. 205 creates the Department of Marijuana Licenses and Control, it may ease some of the burden on law enforcement, Barcott said. Government is necessarily involved in regulating the industry, something Barcott says is necessary for pot since it’s a psychoactive substance.
Anti-marijuana advocate Seth Leibsohn said Prop. 205 creates new government, which means new employees and new expenses.
“This is not, in fact, libertarian-style legalization of marijuana. It’s a new tax on a new product, in addition to the sales tax, to fund a new department and a new commission,” Leibsohn said.
Annie Vogt, spokesman for the anti-legalization group Arizonans for Responsible Drug Policy, said the ballot measure “stacks the deck” in favor of the marijuana industry and basically tasks it with regulating itself, pointing to the provision that calls for three members of the commission to be principals in marijuana businesses.
“We think that every page of Prop. 205 has something problematic, including the department,” Vogt said.
Not a ‘shoestring operation’
Will Humble, the former director of DHS who implemented the medical pot program, wrote arguments both in favor of and opposed to Prop. 205. How well the act goes depends heavily on how it’s implemented by the new state agency, Humble said.
The powers-that-be in state government should make sure the agency “uses its full regulatory authority to strictly enforce the 21-year-old purchasing age-limit, enforce robust product labeling, packaging, and potency standards, regulate advertising and place of use restrictions, engage employers to address workplace policies, and work with law enforcement regarding motor vehicle operation restrictions and penalties,” Humble wrote.
He said it would make sense to use some employees from DHS who have been working on medical marijuana in the new agency so the retail program doesn’t have to “start from zero.” And there’s plenty of money in the medical marijuana fund, meaning it won’t be a “shoestring operation.”
“In order to minimize the impact that it has to the community … you got to get the program up and running and do it quickly and do it with people that are talented and qualified and know what they’re doing,” Humble said.
The attitudes of the governor and key officials at the agency can make a huge difference in the relative success or failure of the program’s rollout, Barcott said.
“If Arizona passes Prop. 205, that’s the first step and a ton of work will follow. That work involves working with the governor, putting pressure on the governor if need be to actually implement this system. So much work goes into passing these measures. … The day after, a new phase of hard work commences,” Barcott said.