Sayonara, Sweet Leaf: MED Punishment Includes Heavy Fines and Loss of Licenses

The Colorado Marijuana Enforcement Division has confirmed that it's come to an agreement with Sweet Leaf's ownership. Under the terms, the dispensary chain's three owners, Anthony Sauro, Christian Johnson and Matthew Aiken, must sell the licenses of their remaining businesses outside of Denver, pay seven figures in fines, and potentially face additional punishment from the MED.

On October 4, Sweet Leaf agreed to waive its appeal against the Denver Department of Excise and Licenses's decision to revoke all 26 of its cannabis cultivation, processing and dispensary licenses within the city; at the time, sources told Westword it was part of a larger agreement between Sweet Leaf, the MED and the Denver District Attorney.

The DA has yet to confirm any deals with Sauro, Johnson, Aiken or any other Sweet Leaf executives, but MED documents confirm our report that the regulatory agency reached a deal with the three owners and their attorneys.

The agreement reached on October 1 stipulates that Sweet Leaf ownership will surrender an additional three business licenses outside of Denver's jurisdiction, but the three owners will be allowed to attempt to sell three different licenses — obtained for retail dispensaries in Aurora, Federal Heights and Thornton — with the MED signing off on any final deal. Any entity that buys the licenses cannot make any references to the Sweet Leaf brand, according to agreement documents.

The proceeds from sales of the licenses must go toward paying off taxes, penalties and interest that Sweet Leaf owes the Colorado Department of Revenue; fines and penalties owed to the Denver DA; fines owed to the IRS and local jurisdictions in which Sweet Leaf operated; and creditors of Sweet Leaf (in that order). Sweet Leaf must also surrender and destroy any remaining cannabis product it was allowed to hold on to as it appealed various regulatory decisions from the MED and Denver Excise and Licenses.

Per the agreement, Sauro, Johnson and Aiken owe $1,467,978 to the DOR in taxes, penalties and interest; they must pay a collective fine of $550,000 to the MED, as well. The MED also requires that all three men surrender their MED working licenses. They cannot reapply for fifteen years, and are also barred from holding any ownership stake or financial interest in a licensed Colorado cannabis business for the same time period, either directly or indirectly.

The ownership group also agreed to drop any pending litigation against the State of Colorado, according to the MED documents, which were agreed upon days before Sweet Leaf attorneys filed a motion to dismiss the company's appeal against Denver Excise and Licenses.

Sweet Leaf did not respond to requests for comment about the agreement, and the company's attorneys declined to comment on the case.

Responsible for eleven storefronts at one point, the Sweet Leaf brand was once one of Colorado's largest dispensary chains, but a majority of its shops and production facilities were raided in December 2017 by the Denver Police Department after a yearlong investigation into the company for illegal cannabis sales.