Colorado Pot Shops Raided By The Feds May Be Shut For Good

Colorado Pot Shops Raided By The Feds May Be Shut For Good

Four Denver-area medical marijuana businesses may be permanently shuttered after federal officials reportedly probing links with Colombian drug cartels raided the shops in November.

The raid on the four interconnected companies came during a search of more than a dozen medical marijuana businesses in Denver and Boulder -- the largest by federal law enforcers on Colorado pot businesses since the state legalized medical marijuana in 2000. The Denver Post reported Tuesday that no federal charges have been filed as a result of the raids and people involved in the businesses denied any connection to illicit drug activity or Colombian drug cartels.

Nevertheless, Colorado marijuana industry regulators are pursuing the shutdown of four of the raided businesses: VIP Cannabis, Kushism, and Highlands Cannabis Co. in Denver, as well as Grateful Meds in Nederland. State regulators notified the four shops on April 3 that state licenses to operate as medical marijuana dispensaries and cultivation facilities would be denied. The state alleged violations of state code that in some cases stretched back to 2012, according to state Marijuana Enforcement Division documents.

"You have operated the licensed premises in a manner that adversely affects the public health or welfare or the safety of the immediate neighborhoods in which your establishments are located," the state notice of denial reads.

The denial notices say regulators have placed administrative holds on the shops' inventory of "marijuana plants, marijuana, finished marijuana products, marijuana-infused products or other marijuana inventory." Shop owners have 60 days to request hearings on the denial notices.

Federal raiders seized more than $2 million worth of marijuana plants and products from VIP Cannabis. Owners Carlos Solano and Gerardo Uribe said the raid forced them to lay off more than 100 employees. They reopened about a month later.

Grateful Meds reopened about a week after the raids. Several other raided shops also have reopened, but Kushism and Highlands Cannabis Co. remain closed.

The Department of Justice has released little about the raids, which came less than two months before Colorado's legal recreational marijuana shops opened. Federal authorities suggested the businesses may not have complied with guidelines outlined in DOJ's August memo that assented to the new retail marijuana laws in Colorado and Washington state.

“While the investigation is ongoing, there are strong indications that more than one of the eight federal prosecution priorities identified in the Department of Justice’s August guidance memo are potentially implicated," Jeff Dorschner, a spokesman for the U.S. Attorney's office, said of the November raids.

The DOJ guidance says federal authorities will continue to prosecute to prevent:

  • The distribution of marijuana to minors;
  • Revenue from the sale of marijuana from going to criminal enterprises, gangs and cartels;
  • The diversion of marijuana from states where it is legal under state law in some form to other states;
  • State-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
  • Violence and the use of firearms in the cultivation and distribution of marijuana
  • Drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
  • Growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
  • Marijuana possession or use on federal property.

"There is little information available about the details of the cases against these businesses, and we will be awaiting further details as they are released," Michael Elliott, executive director of the Marijuana Industry Group, told The Huffington Post. "We continue to believe that everyone needs to abide by the 500 pages of state marijuana law in Colorado, which includes state and local licensing, background checks, financial disclosures, mandatory video surveillance, testing for potency and harmful contaminants, child-resistant packaging, labeling, and seed-to-sale tracking with mandatory RFID tags."

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