When news broke on March 25, 2015, that 32 people had been indicted as part of an investigation into a massive, illegal marijuana growing and distribution operation that was smuggling cannabis from Colorado to Minnesota, the puns started flying. The investigation — dubbed Operation Golden Gofer in reference to the drug-running term "gofer" as well as the mascot of the University of Minnesota, where some of the indicted individuals had attended college — made national headlines, but news of what happened after that was minimal.
As former Westword staff writer Chris Walker kept looking at the case, however, he saw a Blow-like story of an epic drug-smuggling ruse, built on planes and skydiving aspirations, drama between longtime friends, and the black-market underbelly of Colorado's early cannabis industry. In The Syndicate, his podcast that debuts August 11, Walker jumps head-first into the story of Operation Golden Gofer, the characters behind the illegal empire hiding in plain sight, and the investigators who took them down.
Westword: What about this bust stood out to you? It was covered nationally in 2015, but not much beyond the initial announcement.
Chris Walker: When this news broke, there was a lot of low-hanging fruit. There were skydivers involved, SWAT raids, and some of these guys, who were longtime friends who had come out here specifically to take advantage of marijuana laws, had become informants. It all turned sour, with the friends turning against each other, so there seemed to be a lot of drama there. But it also raised questions: Colorado's cannabis industry at that time was still relatively young, and it was booming. So why take such a risk by operating a black-market operation where a legal industry was thriving? It turns out there were good reasons for that, and a lot of it had to do with state-by-state legalization.
Back in 2015, how big of a market was there in other states for illegally grown cannabis in Colorado?
As I got more into the story, I realized it's an important issue that states face during legalization, as long as there are neighboring states where pot is still illegal. So why come to Colorado to set up an organization like this? It's extremely risky to run outdoor or indoor grows anywhere, especially in places where pot is still illegal. These places take up huge amounts of space and electricity, and there's all this waste they have to get rid of, so how do they do all that without drawing attention? There's also the mechanics of bringing in supplies and exporting the harvest.
In a state like Colorado with a mature cannabis industry, there are so many growing operations in people's homes and industrial spaces. There are over 600 cannabis cultivation facilities in Denver alone, so you can hide in plain sight with all these other places that are legitimately sucking up electricity and throwing away pot trimmings all the time. The group in the Syndicate had paperwork in which they were posing as [medical marijuana] caregivers, and their operations were in Elyria-Swansea, Globeville, Valverde and Athmar Park, next to a bunch of other established marijuana operations, so they looked like anyone else.
So there became a black market opportunity to hide in plain sight, but how else were they flying under the radar?
What may have been the group's biggest accomplishment was that they had fire departments coming through their facilities to check building safety code, members of the Denver Police Department to inspect their facilities — and this group would show police officers these fake caregiving certifications, and the officers, who didn't know much about the laws, would just nod their heads. These guys had out-of-state visitors with pot tourism companies come through and investors visit the facilities. By posing as a legitimate business, that absolutely led to the longevity of their run, which lasted almost five years.
This group always had an intention to go legal, and anyone who's been involved with cannabis for decades has an illegal background. Even the legal medical marijuana industry is a couple decades old, so these guys were trying to do what a lot of people did: make a transition from the black market to the legal industry and draw upon all of their expertise in growing and developing strains. And another part of this is that legal marijuana licenses got snatched up fast when it started; they're very limited by municipality, and there's a whole set of criteria in terms of who gets them. Nowadays, there are million-dollar bidding wars for limited marijuana licenses, and these guys were coming from Minnesota in 2010, when it was even harder for out-of-staters to get a license.
These guys were developing these massive growing facilities and a real reputation for their yields and harvest quality. They were making a deal with an existing dispensary, which had already gone through the rigmarole of getting licensed here and would've made these guys a commercial supplier — and that almost happened. Had it happened, we probably would have never known about all of the illegal distribution they were doing and all the drama going on behind the scenes. They almost pulled it off, but that's not how fate was stacked against them.
Do you know of any cannabis businesses they partnered with that are still operating today?
Yes. They were very close to partnering with Peak MJ [a dispensary in Denver], which was just getting its start around 2014, when this group was looking for investors and a partner. But the group wasn't in Colorado's seed-to-sale tracking program, because they could evade that while posing as caregivers. In the [medical marijuana] caregiving model in Colorado, which is a completely antiquated and ridiculous program to still have, there is no sale of marijuana, because it's supposed to be grown by the caregiver and essentially given to the patients for free. Because of that, the state isn't tracking those plants, because they assume it's all going to the patients.
After talking with Peak MJ, they realized they'd have to completely start over with all of their plants and facilities and register every new seedling to Colorado's seed-to-sale program. Their plants numbered in the thousands over their five Denver warehouses, and I heard they were looking at $12 million in lost harvest — and this was while they were expanding and had up to sixty people on payroll. So they didn't have a runway to make that transition, but they were still looking for investors to make a more gradual transition.
What part of the story stood out to you the most? At what point were you investigating this and realized the amusement and gravity of the case?
The moment this turned into a podcast was when I realized the State of Colorado was sitting on over 100 hours of interrogation tapes and I might be able to get my hands on them. When this group was busted, the feds and local police were really effective in getting members of the group to rat each other out to avoid stiff sentences, and the interrogation tapes were a gold mine in looking at how this group rose and fell. It was really something unprecedented in terms of learning how these groups operate. Some of the firsthand interviews revealed a lot of eyebrow-raising stuff, too, like throwing bags of cash in the Rockies with GPS trackers on them to retrieve later, and an exploding basement after a failed butane hash extraction. He basically created a loud explosion in the neighborhood, and the cops and fire department just never came.
After all the resources the state and federal government put into this, and considering the scale of the operations and your own feelings toward cannabis, do you think it was worth it?
Absolutely not; 100 percent no. It was interesting, coming from a newspaper background, that I didn't do too much editorializing in this podcast at first. But it did present an opportunity to do that, and it makes sense to look at this story through the scope of what we're learning as a society. It absolutely makes no sense to spend the type of resources the federal, state and local governments did as this case grew. They made an example out of these guys, but it didn't stop black market activity in Colorado, and it's unclear if people are even paying attention to these large busts. It really comes down to removing the incentives for these black market operations, and that largely rests on the fact that we have state-by-state legalization. As long as you leave that incentive to bring cannabis into those illegal markets where prices are elevated, there will be an argument for the federal legalization of cannabis.