Legal dispensaries on edge
Businesses operating under state laws may face federal charges
In an aggressive new tactic, the U.S. Attorney’s Office in Denver says it’s shifting its marijuana enforcement from busting illegal grow operations to targeting dispensaries that use their licensed businesses and legal grows as fronts for the more lucrative illegal drug trade.
This new approach also could lead to federal charges being brought against marijuana businesses that are in full compliance with Colorado law and not selling pot on the black market, U.S. Attorney Bob Troyer acknowledged in an interview with The Denver Post this week.
“We could,” Troyer said when asked whether his office might prosecute marijuana businesses operating legally under Colorado law. “We make decisions based on safety. Sometimes compliance with state law is relevant to that, and sometimes it’s not. We do not make decisions based on labels like ‘compliance with state law.’ Labels are not relevant to us — people’s safety is.”
Troyer offered no further explanation of the circumstances under which he would pursue federal charges against marijuana businesses in full compliance with Colorado laws.
But very soon, he said, his office — working with Colorado drug task forces — will take enforcement action against an unnamed chain of licensed marijuana dispensaries in the Denver metro
area that he alleges is an illegal drugtrafficking organization disguised as a legitimate pot business. The action will come within two weeks, he said.
Advocates of Colorado’s legal marijuana industry said they fully support Troyer’s mission of going after marijuana businesses operating illegally, but have concerns if he intends to put the spotlight on dispensaries and grow houses following Colorado law.
“When there are bad actors in the marijuana market, it makes it really hard for the rest of us to overcome the negative stigma linked to the industry,” said Kim Casey, spokeswoman for the Native Roots marijuana dispensary in Colorado Springs.
But going after dispensaries that often spend millions of dollars to shape and run their cannabis businesses in strict accordance with Colorado’s laws is a whole different matter, said Kristi Kelly, executive director of Marijuana Industry Group, a trade association that lobbied for strong industry regulations in Colorado even before retail marijuana was legalized.
“Targeting legal dispensaries that are doing their best to follow the letter of Colorado’s laws makes no sense without meeting with the owners and discussing their interpretation of the laws,” Kelly said. “We would have extreme concerns about that.”
The shift in strategy at the U.S. Attorney’s Office in Denver comes as Troyer is on the verge of being replaced. President Donald Trump in June nominated Jason Dunn, a former Colorado deputy attorney general, to be the state’s chief federal prosecutor. Dunn’s nomination is before the U.S. Senate.
Troyer initially was made interim U.S. attorney in Denver following the resignation of U.S. attorney John Walsh, an appointee of President Barack Obama’s, in July 2016. Under Troyer, operations at the U.S. Attorney’s Office in Colorado had not dramatically changed from the Obama administration.
Blackmarket drug trade
Troyer said his decision to focus on licensed marijuana dispensaries is driven in part by poorly written and enforced Colorado laws that have caused blackmarket drug trade in this state to boom and contribute to a spike in violent crime. Recent governmental reports weighing the impact of marijuana on Colorado bolsters his resolve to take a new strategy, he said.
Going back to when Colorado’s recreational marijuana law was passed in 2012, the U.S. Attorney’s Office in Denver along with state and federal drug task forces largely targeted illegal marijuana grows making no attempt to follow state laws. Most of them had operated in remote Western Slope counties. Colorado, local and federal agents and prosecutors had great success, making dozens of arrests and seizing 7.3 tons of marijuana.
In 2017, drug task forces seized and destroyed 80,000 pot plants taken from federal lands, Troyer said. The fact that only a few thousand marijuana plants have been seized on federal lands so far in 2018 indicates cartels have been convinced that’s not a viable business strategy, Troyer said.
But now Troyer said his office and its law enforcement partners, including federal Drug Enforcement Administration agents and scores of Colorado drug task force members, are mobilizing against traffickers in urban parts of Colorado, including some that use milliondollar homes in the Denver metro area as grow houses. Some, he alleged, are doing business with international drug cartels from Cuba, China and Mexico.
The need for taking a harder stance against retailers and grow houses is reflected in crime and indus try statistics, Troyer said. The pot business is booming in Colorado.
As of June of 2017, there were 491 retail marijuana stores in Colorado compared with 392 Starbucks outlets and 208 McDonald’s restaurants, according to a state study.
Ten drug task forces within the Rocky Mountain High Intensity Drug Trafficking Area reported in September that they have investigated 144 blackmarket marijuana organizations that were illegally shipping marijuana to 24 different states.
The number of highway seizures of Coloradogrown marijuana increased 39 percent from an average of 242 annual seizures between 2009 and 2012 to 336 seizures a year between 2013 and 2017, the report says. Over the same period, the number of seized U.S. mail parcels containing marijuana increased more than tenfold from 52 to 594, the report says. Violent crimes increased 19 percent in Colorado since 2012, it says.
Compelling economics
The economic advantage of selling Coloradogrown pot in states where marijuana is illegal instead of at home is compelling, Troyer said.
One marijuana plant can generate about 2 pounds of marketable weed, Troyer said. A pound of marijuana in Colorado is worth about $1,200, he said. Ship that same weed to the East Coast, and it’s now worth about $7,000 a pound, Troyer said.
Essentially, Troyer argued, Colorado is viewed by drug syndicates as a perfect cover for the illegal marijuana trade. The per ception is that it is easier to get away with growing marijuana in Colorado and other states that have legalized the drug than in states that ban the drug.
Kelly, the executive director of Marijuana Industry Group, said she supports Troyer in his effort to root out illegal businesses. But she argued federal and Colorado law enforcement officers should approach legal pot growers they may differ with legislatively by writing more descriptive laws. Many believe that Colorado’s marijuana industry laws are too ambiguous and open to interpretation.
“That ambiguity is not helpful to the cause,” she said. Kirk Mitchell: 3039541206, kmitchell@denverpost.com or @kirkmitchell or denverpost.com/coldcases