Eight suspects are listed as having state pot licenses
Eight of the 16 people indicted on charges they ran a massive illicit marijuana operation that sold and shipped weed out of state are listed in Colorado records as having active or expired licenses to work in the legal pot business.
Michael Alan Stonehouse, the alleged ringleader, has an active “key” license — for operating a marijuana business — that is valid until November 2018, Marijuana Enforcement Division records show. That’s despite a past felony conviction and state rules that bar people “not of good moral character” from getting licenses.
His brother, Theodore Stonehouse, who also was indicted, is listed as having the same type of license, which also doesn’t expire until November 2018, according to an MED database.
In fact, as Michael Stonehouse, 53, appeared in court Thursday, his attorney, Christopher Decker, said the Castle Rock man has invested in legal cannabis operations and acts as a consultant for the pot industry in Colorado. Decker also said
some of the pot seized in raids targeting the alleged ring was produced legally.
“My client has significant and legitimate ties to the lawful marijuana industry,” Decker said Friday. “This is not someone who was trying to keep a low profile in the marijuana industry.”
Prosecutors have hinted that those involved in the operation possibly used the guise of legitimate weed to hide their activities. But at a news conference earlier this month, 18th Judicial District Attorney George Brauchler, whose office is prosecuting the case, declined to definitively say.
“There’s information that we’re still chasing down on aspects of this case that will reveal whether or not any of these individuals have been issued MED licenses,” he told reporters.
Asked about how authorities knew the marijuana was not being legally grown, Brauchler added: “Let’s just say, hypothetically, someone has an MED license. That, in and of itself, comes with that a bunch of regulations about reporting your grows, how much you produced, all these of other things that we have no evidence took place. We also know that the way they con- ducted business was consistent with defeating the regulator framework.
“You don’t get to put hundreds of pounds of marijuana in duffel bags and run them over state lines.”
Authorities say the alleged pot ring, over about three years, used houses and properties in places such as Colorado Springs, Castle Rock, Elbert County and Denver to cultivate cannabis and then sell it across the country.
Colorado Department of Revenue, where the Marijuana Enforcement Division is housed, says it was involved in the probe into the alleged ring and is “conducting a regulatory and administrative investigation.”
“MED’s priority is public safety and will take appropriate administrative actions, and impose appropriate administrative sanctions as determined by the state licensing authority,” the division said.
One of the people indicted, Rudy Saenz, is listed in MED records as having an associated key license — a direct owner in a marijuana business — that expired in September 2014.
MED spokesman Robert Goulding said Saenz and his business, Absolute Manitou Wellness LLC, were fined $30,000 in September 2014. It’s unclear what for.
The criminal history of an applicant seeking to be licensed by MED must indicate he or she is of “good moral character.” An applicant can’t have a controlled substance felony conviction in the 10 years before the application date or have other felony convictions that have not been discharged in the five preceding years.
Michael Stonehouse served four years in prison for a forgery and theft after being charged in 1999.
Goulding said MED does not comment on specific licensees. “Through statute, the Colorado legislature provided specific disqualifying criteria for who cannot receive a license,” MED said in a statement. “MED addressed those criteria in regulations. The ‘good moral character’ clause allows MED to evaluate other circumstances not specifically outlined by the legislature that may otherwise be disqualifying to receive a license.”