Denver Warns Marijuana Business Owners of Increased Code Enforcement

Denver officials have warned local marijuana businesses to prepare for fines and other forms of licensing discipline if compliance mistakes continue.

In a virtual meeting with pot industry representatives on December 8, leaders of the Denver Department of Excise and Licenses reminded marijuana product manufacturers and retailers of recent storage and odor filtration regulations. According to Excise and Licenses Inspector Robert Darrow, a number of dispensaries still aren't following new rules that require at least one safe secured to their buildings for holding cash and marijuana products, as well as increased surveillance measures.

The storage rules, adopted in 2021 by Denver City Council and implemented in January, were enacted to decrease the rate of burglary attempts at marijuana businesses, according to Excise and Licenses and the Denver City Attorney's Office. Since recreational pot sales began in 2014, the vast majority of transactions have been done in cash because of the plant's federal prohibition, leaving marijuana retailers as consistent targets for burglary and robbery attempts.

Darrow warned marijuana licensees to make sure they were compliant in order to avoid enforcement efforts. He wasn't the only city official to remind Denver's pot industry to follow the rules, either. Denver Fire Department Lieutenant Matthew Kasson, a fire-code inspector for marijuana businesses, noted that he's noticed more businesses are storing surpluses of marijuana as the industry contends with record-low wholesale prices and an expected 20 percent drop in annual sales.

"We're seeing an increase, especially at the cultivation faculties, of mass storage of dry material," he said, adding that the dry marijuana material is flammable and that there are limits to the amount of product one business can store.

"I think the industry’s been very successful in instituting safe practices," Kasson added, while acknowledging that tough financial times can affect compliance rates at all businesses.

"Margins are extremely tight for the industry right now, and we are seeing a lot of closures and consolidation of facilities. Don’t hurt your compliance budget during the down period," he told business owners. "We definitely don’t want to see any reduction in the public trust that the industry has built up in regards to safety."

Denver Excise and Licenses has issued a handful of disciplinary orders to marijuana businesses as 2022 comes to a close, with the majority of orders related to surveillance requirements and plant tracking. The city settles the vast majority of the cases without revoking business licenses, according to Excise and Licenses, and the disciplinary orders are not part of a planned effort to crack down on marijuana businesses.

"We will have to continue to enforce the code. The process won’t be changing," Kasson told those at the virtual meeting.

On top of fire and security codes, marijuana businesses have also struggled with odor control, according to the Denver Department of Public Health and Environment's Tim Allen, who conducts inspections for the city's Environmental Quality Division. Around 70 percent of marijuana businesses his inspectors visit “miss the mark” on building maintenance records for air filtration, he said, warning owners that “there will be enforcement action” in the form of citations and fines if they fail to have an odor reduction plan at their facilities.

According to Eric Escudero, spokesman for Excise and Licenses, the department has recently released an online inspection checklist with summarized code requirements that should help marijuana businesses stay ahead of inspections.