The policy discussion around marijuana to date has focused primarily on legalization and medical marijuana initiatives at the state level or oversight and enforcement priorities at the federal level. What challenges do local jurisdictions face, however, when marijuana—long classified as an illegal, Schedule 1 Controlled Substance by the federal government—becomes a legal prescription medication, is decriminalized, or is converted to a legal product for recreational use virtually overnight? How can city, town, and county government organizations prepare for what appears to be an inevitable shift in the longstanding criminal status and public policy regarding marijuana? What will be the impact on employee workforce issues—both within our communities as a whole and on local government organizations specifically?

During a telephonic press call hosted by ICMA, which took place on Tuesday, September 16, 2014, in conjunction with the organization’s 100th annual conference in Charlotte/Mecklenburg County, N.C., a group of local government experts, including current city managers representing jurisdictions at the forefront of marijuana legalization efforts, shared their perspectives on what legalization has and will mean for local governments and their local communities. Thirty representatives from media, nonprofit, and other outlets participated in the discussion.

Download the audio recording of the call.

The Panelists

• Darin Atteberry, city manager, Fort Collins, Colorado (pop. 155,000), a community located roughly an hour north of Denver, which values a high quality of life.
• Jane Brautigam, city manager, Boulder, Colorado (pop. 103,000), a community located 25 miles northwest of the Denver Metro area with a robust outdoor culture.
• Ron Carlee (moderator), city manager, Charlotte, North Carolina (pop. 775,202), which, while not yet grappling with the issue of marijuana management, recognizes the potential challenges facing local governments that are or will have to deal with this issue in the future.
• William Kirchhoff, municipal advisor, Coronado, California, who has served as city manager in a number of communities across the country, has taught public policy at several universities, and as a consultant, has written extensively on the subject of medical marijuana in the workplace.
• David Timmons, city manager, Port Townsend, Washington (pop. 9,100), a small, coastal community and popular tourist destination located at the northeast tip of Washington’s Olympic Peninsula.

The five panelists discussed a range of topics related to local government management of marijuana:

What Emerging Marijuana Policies Have Meant for Local Governments

Washington

• Focus has been on the implementation of the new marijuana law as it relates to the initiative that created it.
• Unlike Colorado, Washington does not currently regulate the medical side of the marijuana equation. As a result, policies dealing with medical marijuana are not necessarily aligned with those concerning retail or recreational use, which has created loopholes for retailers.
• Also unlike Colorado, Washington does not share marijuana revenues with its jurisdictions, which has created friction between the state and its jurisdictions.
• In an effort to force the state legislation to level the playing field between regulations that affect medical and retail use, some Washington cities have banned the sale and location of grow operations. Others, such as Port Townsend, view the issue primarily as another land-use issue and regulate it in much the same way as they regulate alcohol.
• Major challenges have been around planning and zoning, i.e., interpreting the state regulations and how they apply to marijuana management. There are a number of prohibitions regarding proximity to schools, parks, and correct-area designations. Port Townsend, for example, has a significant number of parks, and the 1,000-foot radius around those areas that the state has established has restricted some cities from establishing marijuana grow or retail operations.

Colorado

• Colorado allows local governments to have home rule, and home rule municipalities have a great deal of leeway in creating their own regulatory systems for marijuana management.
• Roughly five years ago in Boulder, it became apparent that medical marijuana was a new, legitimate business within the state. The Boulder city council embraced that business and created a robust regulatory system that involved zoning, planning, law enforcement, licensing, and other issues. Boulder made the measured move into the recreational marijuana business with relative ease and relatively few negative experiences.
• Marijuana legalization has been more challenging in Fort Collins, where the issue has gone through two citizen ballot initiatives, both of which passed. Current emphasis is on maintaining a balance between protecting public health and safety versus recognizing the needs and will of voters. While the city has gone through a diligent process around licensing and regulation systems for medical and retail sales, it is still primarily in the very early stages of this process.
• Both Boulder and Fort Collins have taken a multifunctional, work-team approach toward marijuana management, which involves collaboration across a number of city departments, including the city attorney’s office; police and fire departments; building inspection, zoning, and licensing departments; and the sales tax and city manager’s offices.

New Workforce Realities Facing Public Sector Employers and Human Resource Departments

The U.S. Department of Justice’s Drug Enforcement Administration currently classifies marijuana as a Schedule 1 Controlled Substance, which allows employers to prohibit employees from using the drug for medical purposes.

• The question becomes what local governments will do when federal law no longer prohibits the medical use of marijuana, which many believe is inevitable.
• Cities, towns, and counties will need to shift virtually overnight from treating marijuana as a criminal issue to supporting it as a medical product that many employees feel they have the right to use.
• As a result of the potential change in marijuana’s status, managers will need to deal with four categories of employees:

1. 1. Legitimate users, who have a doctor’s prescription to use marijuana and who play by the rules.
   2. Abusers, or recreational users, who will try to game the system because of the ease with which they can obtain marijuana.
   3. Innocents, who are not directly involved with the use of marijuana but who could be affected by workforce changes, such as random drug testing.
   4. Management, many of whom may resist the changes, which will lead to the need for a concerted value alignment effort on the part of local government.

• Local governments will be required to do three things:
  1. Rewrite internal drug policies so that they are more specific and comprehensive as they relate to personnel policies. In the last year, Bill Kirchhoff has examined at least 10 existing policies of clients, most of which were fairly limited, were written after the 1988 Drug Free Workplace Act, and were not very specific or detailed.
  2. Address organizational culture issues and realign internal core values to accept the new reality that employees may be free to use marijuana without promotional, career, or assignment stigma.
  3. Develop a more enlightened effort to educate employee workforces about marijuana use and their responsibilities regarding it, particularly when dealing with the media. The last thing any manager wants to hear through the media, for example, is that employees were caught smoking pot on the job.

Other Local Government Considerations

• Because marijuana requires 24/7 grow lights, fire departments have encountered significant safety concerns—i.e., fire hazards resulting from the use of extension cords to keep the lights on—during home or grow operation inspections.
• Some jurisdictions have required growers to purchase electricity through wind power.
• "Grows" also require a lot of humidity, which has led to black-mold issues.
• Because many banks continue to perceive the marijuana industry as unlawful under federal law, many have shut down accounts held by growers and retailers, which has forced participants to conduct their business entirely in cash.
• Local governments also must deal with large amounts of cash when growers or retailers come in to pay their sales and other taxes in cash. Boulder had to hire armored cars to deal with the large volume of cash.
• The cash often comes with the distinctive odor of marijuana, and some inspectors do not want to ride in trucks or use uniforms that have been involved in the handling of marijuana.
• Marijuana management has become a highly charged emotional issue, and how that issue translates into policy, and the role local governments play in recommending good policy, is critical.
• Many law enforcement and other local government personnel have spent their entire lives enforcing laws against marijuana usage, and employees who are managing these programs may have very real personal issues with these changes. Regulatory changes will require significant cultural change.
• Challenges include striking a satisfactory balance between allowing and protecting, i.e., distance from schools, criteria for issuing business licenses, criminal and moral character background checks, and the like.
• When developing new policies and regulations, it is important for communities to be extremely thoughtful about the impact of these changes on children.

Advice for Managers

• In addition to external issues (such as zoning, revenue collection, and licensing), if and when marijuana comes off the Schedule 1 Controlled Substance list, managers will need to focus on dealing with internal workforce issues. HR directors will need to be added to the list of people and departments that must be involved in addressing these issues.
• Don’t reinvent the wheel. Research and plagiarize the best management practices already available. Washington and Colorado have done a good job of laying the groundwork. Spend time thinking and planning ahead and learning from others.
• Be prepared for what promises to be a very complex, emotional issue, as well as for the type of creativity that will give rise to new enterprises, such as smoking lounges, party bus tours, and delivery services that will challenge managers. There are many unknown consequences that come with these new policies.
• Be aware that many of the individuals and businesses that apply for medical, retail grow, or retail sales licenses are new to the business and regulatory side of local government, e.g., land-use and tax collection systems.
• Be prepared to deal with a unique set of governance issues. Some people, for example, argue that because of the high energy consumption of indoor operations, marijuana grows should be located outdoors.  
• And marijuana grows are not like apple orchards. Because of the product’s intrinsic monetary value, grows invite burglaries and other criminal activity.
• Understand where you stand on the issue personally. Managers are and will be responsible for orchestrating all aspects of the marijuana management picture and must know where they stand and how they can maintain their personal integrity. Managers will need to strike a balance between their personal and professional positions and then communicate that balance to councils and the larger community.