To begin with, the state needed a way to track plants from seed to sale. MED contracted with Franwell, a Florida-based company, to create a Colorado-specific version of its Marijuana Enforcement Tracking Reporting Compliance (Metrc) system. The state requires growers to track each plant with a unique radio frequency identification tag. The RFID tags allow the plants to be inventoried more quickly without direct contact, and they create data at each step of the supply chain as plants move from growers to shippers to final packaging.

The RFID tags, like the sensors that are becoming ubiquitous in the emerging economy of connected devices, build regulatory intelligence directly into the regulated object, streamlining enforcement across the board. The tracking system, for example, can automatically flag facilities that are producing substantially less marijuana than expected based on the outputs of comparable growers, which allows state employees to more easily identify potential illegal diversion. And because the state is able to track the origins of any product, it can easily issue public recalls for specific batches or growers if regulators discover traces of potentially harmful pesticides.

This system of constant, real-time tracking allowed Colorado to shift away from an older regulatory model in which governments must depend on slow bureaucratic procedures for permitting and licensing. Rather than simply hoping that procedural factors would prevent noncompliance, the state can respond to problems as they arise, which increases accountability and allows for better-informed enforcement.

The Colorado Department of Public Health and Environment, for example, analyzed hospital-visit data and found that marijuana-related visits had tripled after commercialization and that poison control calls had doubled. Around the same time, MED noticed that marijuana-infused edibles were comprising significantly more of the market than expected -- fully 50 percent, according to Freeman. As MED discovered, the two were correlated: Many of the hospital visits and poison-control calls stemmed from a lack of dosing information or packaging safeguards.

MED quickly intervened, adopting new requirements that included childproofing edibles and clearly marking doses on the edibles' packaging. These changes have helped lower the instances of unintentional exposure to edible marijuana products. Colorado has hired a full-time analyst dedicated to deriving similar insights from these new flows of marijuana data.

Whatever one might think of the advisability of legalizing marijuana, there's much to be learned from Colorado's experience in data-driven regulation. While many of the practices Colorado is pioneering can be adopted by other states that may be considering legalizing marijuana, they also could help to broadly improve regulatory systems across all levels of government. Colorado is demonstrating how data-driven regulatory models can enable governments to quickly understand the realities of a market and hold businesses accountable -- ultimately resulting in stronger, more effective consumer protections.