Feds raid Denver area marijuana dispensaries and grow operations

Seven weeks before the nation’s first retail marijuana shops open in Colorado, federal authorities Thursday morning raided more than a dozen Denver metro area marijuana facilities. In the largest federal raid on Colorado marijuana facilities since medical marijuana became legal, federal law enforcement agents with an assist from local police officers executed search and seizure warrants at multiple dispensaries and cultivation facilities throughout the region — at least a dozen in Denver alone.

At one raid in Boulder, a pile of seized marijuana lay in the snow like Christmas trees until a front-end loader scooped it up. At the VIP Cannabis dispensary in Denver, broken glass from a shattered front window littered the parking lot while masked agents hauled boxes of evidence into a U-Haul truck.

Police turned customers away. And the dispensary’s website said it would be closed on Thursday and Friday.

Jeff Dorschner, spokesman for the U.S. Department of Justice in Denver, said the raids were being conducted by the Drug Enforcement Administration, Internal Revenue Service criminal investigations unit, the Denver Police Department and state and local law enforcement.

“Although we cannot at this time discuss the substance of this pending investigation, the operation under way today comports with the Department’s recent guidance regarding marijuana enforcement matters,” Dorschner said in his e-mailed statement to The Denver Post.

On Aug. 29, the U.S. Justice Department issued a memo to federal prosecutors revealing the federal government wouldn’t stand in the way of marijuana legalization. The memo warned the federal government would still “aggressively enforce” eight areas of concern surrounding the drug:
• Preventing distribution to minors;

• Preventing revenue from marijuana sales from going to criminal enterprises, gangs, and cartels;

• Preventing diversion of marijuana from states where it is legal to other states;

• Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;

• Preventing violence and the use of firearms in the cultivation and distribution of marijuana

• Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;

• Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands;

• Preventing marijuana possession on federal property.

It is unclear what areas are being investigated by federal authorities in Thursday’s operation.

In March, Kevin Merrill, assistant special agent in charge of the Drug Enforcement Administration’s Denver field division, told The Post his investigators were aware of many instances of operators with pending license applications who would not qualify because of criminal records, failure to meet residence requirements or because they have registered the business in another name while they are in control.

At the time, he declined to elaborate, citing ongoing investigations.

Mike Elliott, head of the Medical Marijuana Industry Group, which represents some of Colorado’s larger industry players, said the organization has always supported a robust and comprehensive regulatory framework and strict enforcement.

“Really, I see enforcement actions happening as a sign our industry is maturing and this program is working,” Elliott said.

Elliott added that details on the enforcement actions are not available and “it’s important to remember people are innocent until proven guilty.”

Mason Tvert of the Marijuana Policy Project, who pushed for legalization, said he doesn’t know what inspired the raids.

“The Justice Department said it would respect states’ rights to regulate marijuana, and that it would not go after businesses as long as they are complying with state laws,” he said in a statement.

“We hope they are sticking to their word and not interfering with any state-regulated, law-abiding businesses. … If a business is suspected of violating state laws, they will likely face increased scrutiny, and if they are found to be in violation, they will likely face consequences. That is how our society treats alcohol, and that is how we expect to see marijuana treated.”

Rob Corry, an attorney and marijuana activist, said it appears that the crackdown is focused on “mostly mom-and-pop” businesses.

“That is true to form, the DOJ, behaving like the classic schoolyard bully picking on the little guy,” he said. “The DOJ needs to explain in a logical fashion why they are picking and choosing , going after only some of these entities when every one of them selling marijuana is running afoul of the federal law.”

Tom Gorman, director of the Rocky Mountain High Intensity Drug Trafficking Area, a federal program that works with law-enforcement agencies to reduce drug trafficking and production, said he was glad to see the raid. Gorman’s program was not involved in the investigation or Thursday’s enforcement actions, he said.

Gorman said he does not think the timing is connected to the recent guidance to Colorado and Washington state from the DOJ, or to Colorado’s looming transition to recreational marijuana retail centers.

Typically, he said, such investigations last 18 months or longer and it just takes that long to gather information for search and seizure warrants.

“I have said it before and I’ll say it again — you cannot regulate this illegal industry,” Gorman said. “You can’t any time you talk about money and profits, and dealing with a customer base and selling product. There are too many loopholes, too many ways to get around it. You just can’t do it ….

“It looks likes we are becoming a stoner state.”

Andy Williams, owner of Medicine Man dispensary in Denver and a board member with the Medical Marijuana Industry Group, said he welcomed raids on businesses breaking the rules and doubts the federal government would target business indiscriminately.

“I want the bad actors gone, quite honestly,” he said.

Williams said he is confident the recreational marijuana industry will be well-regulated now that Colorado voters have approved taxes that will go to oversight.

“When the revenue starts rolling in, (state officials) are going to be able to hire the people necessary to make sure they are doing their due diligence,” he said. “I think the federal government is going to recognize that.”

Thursday’s actions are occurring roughly seven weeks before marijuana begins being sold legally to adults in retail stores on Jan. 1.

Colorado is the first state in the country to allow legal retail sales after voters in 2012 approved Amendment 64. Washington state also approved legal sales, but the retail operations won’t begin until the spring.

Colorado’s regulatory framework as well as Denver’s framework has been criticized in recent audits.

The state audit said regulators charged with watching over Colorado’s medical marijuana industry fell short on everything from tracking inventory and managing their budget to keeping potential bad actors out of the business.

Denver’s audit found serious problems with how the city licenses, tracks and manages the booming medical marijuana industry in the city.

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