Denver’s Outgoing Marijuana Czar Reflects on Seven Years of Building an Industry

A lot of people look at weed to treat stress, but marijuana was likely the source of it for Ashley Kilroy, the outgoing executive director of the Denver Department of Excise and Licenses. Kilroy was named to head Denver’s efforts regarding the plant after it was legalized by Colorado voters, and has been busy parenting those who grow and sell it for over seven years.

Kilroy, who joined Mayor Michael Hancock’s office in 2014 to lead his new Office of Marijuana policy, eventually became executive director of Excise and Licenses, overseeing the rules of the country’s first major recreational marijuana market. Since then, Denver has become home to well over 200 dispensaries, as well as 300-plus marijuana cultivators, extractors, product manufacturers and other licensed pot businesses located in the city.

On the way to licensing hundreds of businesses that provide over $70 million in annual tax revenue, Kilroy has faced several challenges and pivotal moments. Now she’s resigning as of January 7, to spend more time with her daughters — all of whom have been abroad since the COVID-19 pandemic began. Before she leaves the office, we caught up with Kilroy to look back on her tenure and relationship with legal pot.

Westword: Did marijuana take up a lot of your energy and attention as executive director of Excise and Licenses? Or did we make it seem more time-consuming than it really was?

Ashley Kilroy: Remember that first we had the Office of Marijuana Policy in the mayor’s office from 2014 to 2016, and that was obviously all weed, all the time. After I transitioned [from there] into the director role, I guess it came and went in waves, depending on what we were doing at the time. When we adopted liquor common consumption, we focused a number of months on that in outreach and stakeholding. When we revised a security ordinance, we did the same. In 2018 and 2019, we did a lot of work around marijuana in regard to new license types and social equity. So it all really depends on the policy issue at the time.

How have you seen marijuana’s ownership landscape change in Denver during your tenure?

That industry ownership structure isn’t what we in government follow very closely. It’s not that we don’t follow it closely, but you could probably find someone in that area more educated than I am. I will say that what we’ve done over the past couple of years, and our regulations in Denver, have supported this industry in a number of ways and set the ground level for them to be profitable, to reach $2.2 billion in [statewide] sales in 2020 as entrepreneurs and innovators.

What marijuana policy areas are you most proud of during your time with the City of Denver?

I think our team and our city should be very proud of all of our marijuana regulations. Because of the regulations we have in place, we were really able to support the industry and see a groundswell of support for marijuana legalization throughout the country. We’re seeing legalization spread through the country, and I think the conversation about federal legalization is not “if,” it’s “when.” And if Denver had not succeeded the way we did, I don’t think we’d be here. We still get calls regularly. I think we just met an official from Colombia, and I’ve talked to another state recently.

Some of the first questions we get nationally are what happened to youth usage and crime. And what I can say is that in Denver, we had strict rules and robust enforcement, and we had a great youth education campaign. We did not see youth usage increase, and crime remained the same. Those are the first questions other states have, and if we weren’t able to say that and hadn’t reached the full promise of legalization, I don’t think marijuana legalization would be where it is today.

If or when federal legalization does come, how would Denver’s current marijuana licensing and tax system intermingle with federal laws?

I think all of that is still TBD. It will depend on federal legalization components. I do think for the industry and everyone involved in marijuana, that changing legalization can impact our markets and impact their businesses. If they’ve got a model that works under these regulations and those regulations are changed, there will be big impacts — but one thing we know about this industry is that they’re nimble. They’re innovators and entrepreneurs. They’ve been taking risks since 2014, when recreational marijuana first opened. So I do think they’ll be up to the task, but it’s to be determined based on how the feds come down with legalization.

When the federal government is doing this, I hope they do it the way we do our work in Denver. You’ve seen our stakeholder outreach, and we hope the feds do that, as well. Get in touch with states, and understand what states and local jurisdictions have done so they don’t just scrap it and start all over, but take what’s already been proven to work. I also hope the feds are very cognizant of taxation and don’t overtax the product to the extent that consumers continue going to the black market.

What were your biggest challenges during your tenure?

It was really the first year. Amendment 64 passed in November 2012, and we had to have our license structure up and running in about a year. We had to guess things like how many people were going to want to open these businesses. What would regulations look like? What kind of inspections will we have? How many inspectors do we need to hire? How many license techs do we need to hire?  What’s the turnaround going to be on this? The mayor told us the voters spoke and we needed to get it right. We needed to have it open on January 1, 2014, and we did that.

The State of Washington also voted in favor of legalization the same time we did, and they weren’t ready to go on January 1. It was months later. So in the beginning, it was building this with absolutely no model and no one else to turn to, and with a product that had been illegal. So we didn’t have people like an expert cultivator to turn to and ask about the best cultivation practices, or the risks involved, or what kid of pesticides they’re using. We didn’t have experts to talk to about what they did, like how to extract marijuana. We didn’t have those people who’d been doing it, regulated, before that.

So we had to have the industry at the table with us right away and do this from the ground up, to ask things like how do you grow marijuana safely? How do you ensure the product is safe for consumers, and how do you ensure it’s not tainted? Then it was how to extract: How do we extract safely? Then we had to think about the consumer standpoint, and how to ensure it’s safe for consumption. Does hash oil have to be kept cold, or can it be stored at room temperature?

All of that stuff, we had to figure out, so we had to have the industry at the table with us, knowledgeable experts and advocates, the fire department, public health department and everyone there, to learn what they’re doing and how they’re doing it so we could anticipate risks and regulate against them. I would say that first year was crazy.

There was an established medical marijuana industry in Denver before recreational legalization. Was there just not much documented at that point?

Medical legalization had occurred in 2000, but the city didn’t start regulating it until around 2010. So we did have some [information] to look at, and we did rely heavily on the medical industry, but it hadn’t been regulated until we adopted the medical marijuana code in 2009 or 2010.

Given that so many new issues and regulatory challenges were thrown your way, is there anything you would’ve done differently in regard to marijuana rules?

When we first got started and we were trying to build this regulated market from the ground up and support businesses, we did not anticipate the popularity of edibles. We had the medical market, but we had seen those individuals with a knowledge and tolerance about using edibles. When we opened that up recreationally and had nascent users using marijuana or edibles for the first time, we weren’t prepared for that. You probably remember that really early on, that young man, Levy Thamba, over-consumed marijuana and wound up jumping off a balcony and passed away. We also had that other instance when a man was on another substance and had combined it with marijuana, and shot and killed his wife.

That was really horrible, and is something that sticks in my mind. We did not anticipate that. So we started working with the state and figured out dosage, packaging and serving size. The industry started an education campaign about edibles to give consumers more information. So that was something. We had seen edibles on the medical market, but we did not anticipate the popularity of them on the recreational side, and that many people didn’t understand the dosing.

Have you experienced any of these educational issues recently with THC potency and extracted marijuana products?

That’s really all at the state level. We’ve had a very successful youth education campaign, and that was something at the very beginning. The promise of legalization was we’d have additional taxes, youth usage and crime wouldn’t skyrocket, and we’d legitimize this industry. With youth usage, we’ve seen real success. I think our High Cost campaign has been viewed around 260 million times. But I do wish we had known earlier about high-potency marijuana and that it might be attractive to youth, so we could’ve incorporated it into some of the messaging to our youth.

It’s been almost three years to the day since Sweet Leaf dispensaries were raided in what began a year-long battle over illegal marijuana sales and nearly two dozen marijuana business licenses. What do you remember most about it, and how do you feel like you handled it?

That started off strictly as a law enforcement thing. It was an issue with the community seeing this illegal conduct and reporting it. The neighbors were first reporting it, and we at Excise and Licenses weren’t involved while it was a confidential law enforcement operation. But once we learned of it, we took immediate action to show cause and revoke those licenses. We want to support our legitimate industry and we want them to succeed, and if people are engaging in criminal conduct — whether they’re diverting marijuana out of state or not following regulations — they’re putting our legitimate industry at risk.

We don’t worry as much about it anymore, but years ago the feds told us that under the Cole Memorandum, if we had strict rules and robust enforcement, they’d basically stay out of our business. So we want to make sure when we find someone engaging in illegal activity like that, we take action and revoke their licenses.

Recreational marijuana delivery and the city’s social equity licensing program are just starting. Where do you see the marijuana landscape playing out in Denver over the next few years?

We’re really proud and excited that we got our marijuana legislation and omnibus bill passed, and that we’ve opted into these new license types. That was two years of really hard work to get where we are. One thing I keep looking back on and saying “Wow” is that we got it passed through City Council without one amendment, and it passed unanimously. So I feel like that was successful. Obviously, you’re never going to make everyone happy, but I think we did a pretty darn good job. We’re excited that we’ve got that legislation set up. Now for Excises and Licenses, we need to implement. We’ve done the policy piece, and now we make sure this works appropriately.

Molly Duplechain led the whole stakeholder process, and she’s about to be Excise and Licenses interim director. She’s also overseeing this new program, and [Excise and Licenses cannabis process navigator] Joey Peña is helping her. They’re figuring out the legislation, and now we need to support these entrepreneurs to get where they need to be. That’s going to be the focus of Excise and Licenses this next year, along with everything else we’ve got going on, like the residential rental program that Councilwoman Stacie Gilmore passed. That’s a big lift for Excise and Licenses, as well, but the marijuana equity program is near and dear to our hearts, and it’s something that is extremely important to the mayor. It was extremely important to get that legislation passed, and we’re going to make it work.

On your way out, how do you feel when you see the scale and growth of Denver marijuana? The revenue growth, the maturity of the market, the ownership landscape — what stands out the most?

What I’m most proud of is that Denver did this, and we did it right. We really balanced all the interests so we were able to stand up a successful regulated market to thrive — to flourish, and realize $2.2 billion in [statewide] sales in 2020 alone. We tripled our [local marijuana] tax revenue from 2014 to 2020. I think in 2014, our tax revenue was about $20 million, and it was over $70 million by 2020. We’ve stood up this industry, have seen the benefits of tax revenue, and supported our youth. About $18 million in marijuana tax revenue has gone to youth programing through our Office of Children’s Affairs and our Office of Behavioral Health. Our intention from the beginning was to develop regulations that support the full promise of legalization and the positives we were looking forward to, and to mitigate the potential negatives. I think our team did that, and I’m really proud of that.

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