By Michael W. Savage
Washington Post Staff Writer
Sunday, July 25, 2010; A03
DENVER -- When Matt Cook was coaxed out of early retirement to become Colorado's chief revenue enforcer three years ago, he assumed his time would be spent overseeing the casinos, liquor stores and car dealerships he had been keeping an eye on for much of his career.
If he had hoped for a quiet few years before heading for the golf course, his timing could not have been worse.
Cook, senior director of enforcement at Colorado's Department of Revenue, returned just as a new kind of business rolled into town promoting a controversial product. Medical marijuana was legalized a decade ago in the state, but retail-style dispensaries began springing up only in 2007.
The trickle of new outlets has turned into a flood. Officials think more than 1,100 dispensaries are operating statewide. As the numbers grew, dispensaries offered ever more cannabis strains, marijuana-infused products and delivery services.
When alarmed lawmakers decided they wanted to curb the burgeoning industry, all eyes turned to Cook. "It was last Christmas that I saw this was heading our way," he said. "Merry Christmas."
Relatively late in his career, Cook has become a pioneer in the medical marijuana industry, drawing up a stringent regulation scheme that aims to turn the industry into a legitimate -- and respectable -- enterprise.
"We plan to track the entire commodity from seed to sale," the 53-year-old said. "We will use a Web-based, 24-7 video surveillance system, and we will see virtually everything from the time a seed goes into the ground to the time the plants are harvested, cultivated, processed, packaged, stored."
The regime may be copied by the 13 other states that already have legalized medical marijuana and the 14 additional states that could soon allow its use. Cook's counterparts in other states, as well as the District, have been seeking advice.
Legislation passed by the D.C. Council in May permits the establishment of up to eight dispensaries. Virginia and Maryland do not permit medical marijuana use.
"I didn't find tough regulatory schemes out in any of the other states," Cook said. "The numbers of dispensaries they have are very limited. It is the most intensive period of work I have had at any point in my career."
A drive down Denver's Federal Boulevard, an industrial stretch running through the inner city, illustrates why his expertise was needed. New dispensaries, with their marijuana-leaf signs, are providing the latest source of urban regeneration.
Herbal Wellness, just down the street from a derelict movie theater, has a steady flow of patients. The pungent smell of its produce wafts through the front door. A sign displayed by the roadside tells passing drivers: "Sale! $250 an ounce." Chronic Wellness, Daddy Fat Sacks, Doctors Orders, Earth's Medicine and Mr. Stinky's are among the other vendors found along the strip.
Denver and Colorado Springs could have as many as 500 dispensaries each, officials estimate. Dozens also have opened in Boulder.
However, the new regulations have stopped the boom and are widely expected to cut the number of outlets significantly. No new dispensaries can be opened until next summer. Existing owners wanting to remain in business have to apply for a license by Aug. 1.
Anyone wanting a license has to fill out a 22-page form detailing immediate family and personal financial history. People with drug-related felonies are disqualified. When all the rules kick in on July 1 next year, practices such as giving away free joints will be outlawed. Delivery services will be allowed only in rare cases.
In the first year, even the smallest dispensaries must hand over at least $7,500 for a license, while bigger operations will have to find as much as $18,000 to stay in business.
Cook's starring role in shaping legal marijuana sales is all the more remarkable given that, 30 years ago, Cook was a narcotics enforcement officer who threw Colorado's cannabis growers behind bars. His Drug Enforcement Administration training certificate, dated 1980, hangs on his office wall. On a table, three volumes of Colorado statute sit next to a copy of Cannabis Connoisseur magazine.
He says his past made his new task a "big pill to swallow" but insists it is all aimed at ensuring genuine patients receive the best treatment.
Some in the industry have decided to get out before the wave of new rules hits.
"We've been jumping hoops since the beginning to get compliance, and it is getting tiring," said Charlie Van Valkenburg, who is selling his 5280 Wellness dispensary.
Cook says the new licensing requirements will shut down some shops. On a visit to the Tender Healing Care dispensary, Cook stood next to a glass counter filled with marijuana strains as he outlined some of the new rules to Geoff Graehling, the dispensary's co-owner. Cook explained that 70 percent of the marijuana sold in the store will have to be grown there and that each jar of cannabis will need to be labeled with the chemicals used during its production.
Despite the paperwork, costs and modifications, Graehling and his fellow owner, Barb Visher, say they are embracing regulation. "I think it was needed to deal with some of the bad apples that are operating," Graehling said. They are not alone in welcoming the chance to earn respectability. "Compared to the Wild West we've been in, the regulations are actually going to put some legitimacy on the medical marijuana laws," said Andy Cookston, owner of Cannabis Medical, Denver's first dispensary.