Denver Threatens Three Marijuana Businesses With License Suspension on Same Day

Three Denver marijuana businesses — a marijuana dispensary, a cultivation and an extraction firm — have been ordered to prove why their operational licenses should not be suspended or revoked after city inspectors found numerous alleged infractions in inventory tracking.

On August 31, the Denver Department of Excise and Licenses served show-cause orders to WolfPac Cannabis dispensary, Newt Brothers Artisanal extraction and wholesale cultivation CT Acoma LLC, which all have different ownership groups. They now must appear in front of Excise and Licenses to show why their marijuana business licenses shouldn't be stripped or suspended. According to show-cause orders issued by Excise and Licenses, city inspections found untracked marijuana plants or flower at all three facilities, as well as poor or missing video surveillance and other violations.

WolfPac, a Colorado dispensary chain with two locations in Denver, was visited by a city business code inspector after Excise and Licenses received information that it was hosting marijuana consumption events in a building next door to its store at 74 Federal Boulevard. None of WolfPac's alleged violations involve marijuana use, however; the reported violations involve the company's marijuana product tracking, storage and surveillance.

According to the department, the city inspector found improperly stored marijuana concentrate in an employee fridge, and also noted a lack of proper signage and obstructed or malfunctioning surveillance cameras inside the dispensary. The show-cause order doesn't mention any social consumption violations next door to WolfPac, but the inspector reportedly found 39 packages of marijuana flower in the building, which was not licensed for dispensary product storage.

WolfPac founder and CEO Emanuel Bernal says that Wolf Pac has addressed the surveillance and storage issues, and will "learn from the mistake." Bernal also admits to allowing a third party to host marijuana consumption events in the building next door, which he also owns, but says that he doesn't believe it was a violation.

"There's a unit next to us, which is a separate address. A private pop-up was hosted there, but it had nothing to do with WolfPac," he adds.

Bernal says the dispensary is willing to accept responsibility for the code violations and is hopeful for a resolution or settlement with the city before WolfPac's scheduled hearing on October 13. But he also believes the city could be putting its business resources to better use.

"It’s sad to say that this happened, especially in the shape the industry is in now. Why are sales down 60 percent? How can they help us with that? We're operating on small margins, so any hiccup is hard to recover from," Bernal argues. "I think they're doing the best they can. We were the first in the country to develop compliance, but I think there are a lot of things that can be fixed, whether it's taxes or something else."

Newt Brothers, a Denver-based extraction company that sells marijuana concentrates, vape pens and edibles at dispensaries across the state, is accused by the city of failing to track 43 young marijuana plants in the facility's vegetation room. An Excise and Licenses inspector also noted an obstructed camera, which was corrected on site.

Newt Brothers COO Patrick Stephenson says the company is still awaiting notification from the city before it addresses the issues, and says that the show-cause order "was a surprise to us" after being told by the city inspector that there were no violations.

"We have been operating for over six years, and work incredibly hard to stay in compliance at all times. We have never faced an issue like this and know the importance of being in full compliance at all times," Stephenson says. "We are working diligently to rectify any issues."

CT Acoma LLC, a wholesale marijuana cultivator in west Denver, is accused of having 112 plants and bags of unidentifiable marijuana plant matter without tracking tags, as well as failing to correct lingering surveillance recording issues and modifying the cameras and building purposes without filing a modification request with the city. The business owner listed by the state Marijuana Enforcement Division, Jiun Haw Chang, did not respond to requests for comment.

According to Excise and Licenses communications director Eric Escudero, show-cause orders are usually issued after the city finds alleged marijuana code violations, and are often released in batches after cases under investigation are reviewed.

Although license suspensions and revocations are on the table, settlements are also a possibility. Denver Packaging Company, the manufacturer of Keef Cola in Colorado, recently agreed to a $15,000 fine with Excise and Licenses after receiving a show-cause order in June for an incident at April's 4/20 festival involving THC-infused drinks at a public event.