100 marijuana plants grow in a warehouse in east Denver, March 3, 2014. (John Leyba, The Denver Post)

Colo. marijuana regulators reverse roles, join industry

At least three influential officials at the state agency that regulates marijuana business have found work doing cannabis industry consulting after leaving the division, the latest sign of the industry’s growing allure in Colorado.

All three officials say they adhered to strict — but not always mandatory — ethical standards in switching from the regulators to the regulated. And an ethics expert said the moves are not necessarily a conflict, noting that such public-to-private switches are common in many regulated industries.

But the moves do show the increasing legitimization — and commercialization — of the marijuana industry. And they have caused concern among remaining state officials, who say the moves could send the wrong message to the public.

Ron Kammerzell, the senior director of enforcement at the Department of Revenue, said he would prefer a cooling-off period for employees before they were allowed to work in the marijuana industry. He said it would be be good public policy and would promote the integrity of the industry.

“It’s more a perception issue than it is in reality an actual problem,” Kammerzell said.

State law requires outgoing legislators to take a two-year hiatus before working as lobbyists, but such restrictions are less common for state employees.

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Employees in the Department of Revenue’s lottery division must wait at least a year after leaving their jobs before going to work for a vendor or service provider under contract with the lottery. All other state employees must wait six months before going to work for a business that has contracts with the state — but only if they were involved with those contracts while working for the state.

“It’s not so much a question of ethics, but it is a question of public policy,” said Luis Toro, the director of the watchdog group Colorado Ethics Watch. “Sometimes agencies can become ineffective if it’s more lucrative for employees to go work for private industry.”

Matt Cook — one of the three officials now working as a consultant — said having former regulators advising marijuana companies how to comply with state laws can make the regulatory system run smoother. And, with the governor’s office predicting medical and recreational marijuana stores in Colorado will do close to $1 billion in sales in the next fiscal year, the marijuana industry’s allure is difficult to ignore.

“It’s all about opportunity,” said Cook, who is often credited with writing Colorado’s medical-marijuana business rules at the Department of Revenue and now consults with both marijuana businesses and governments on regulatory issues. “Certainly this is a new and emerging industry, not only here but on an international basis. So obviously those who have knowledge have the opportunity to share that.”

Cook said he’s been careful in his new line of work only to explain state law to the businesses he works with and not suggest he has influence at the Marijuana Enforcement Division, the arm of the Revenue Department that regulates pot shops. Cook retired from the Department of Revenue in 2011.

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Attorney Jordan Wellington — who worked as a policy analyst at the division and was instrumental in the writing of Colorado’s recreational marijuana business rules — went to work for the marijuana-specialist law firm Vicente Sederberg this year after his short-term contract with the division ended. As a condition of his employment, Wellington said he won’t represent clients before the division on rule violations, and he said he won’t reveal any confidential information he learned while working at the division.

“I don’t want to do anything that would put them in an uncomfortable or awkward position,” he said.

Laura Harris, who was the director of the Marijuana Enforcement Division until her retirement last year, said she waited about six months before starting work at the law firm Dill Dill Carr Stonbraker & Hutchings as the firm’s administrator and as a consultant. The firm — whose offices are on the same floor of the same building as the Marijuana Enforcement Division’s — represents marijuana businesses. Its managing partner, H. Alan Dill, is also a part-owner of the building and is the division’s landlord.

Harris said she doesn’t see her current work as a conflict — in part because she wasn’t working at the division when it signed the $1.3 million, five-year office lease . This month, the firm Denver Relief Consulting — which has links to a marijuana store by the same name — announced that Harris had joined its team.

“I don’t view that as a conflict of interest at all,” she said. “I think all of us came out of state government with that finished. I certainly haven’t tried to exercise any undue influence on the agency from my position here.”

John Ingold: 303-954-1068, jingold@denverpost.com or twitter.com/john_ingold

Staff writer Eric Gorski contributed to this report.

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This story was first published on DenverPost.com