Denver wiped itself clean of Sweet Leaf marijuana stores today, July 5, after Denver's Department of Excise and Licenses executive director Ashley Kilroy revoked all of the dispensary chain's business licenses within city limits. The decision was somewhat expected, as city hearing officer Suzanne Fasing recommended the same move in April after a five-day hearing over the fate of the company's licenses.
Sweet Leaf held 26 medical and recreational marijuana business licenses in Denver that covered seven dispensaries and several cultivations and infused-product manufacturing centers. The company was one of the state's largest dispensary chains until eight of its stores in Denver and Aurora were raided by the Denver Police Department and various enforcement agencies in December 2017 after a year-long investigation into alleged looping, or selling unlawful amounts of marijuana to customers. Eighteen budtenders were arrested in connection with the investigation, although none of the company's owners or management have been charged.
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Under the language of Amendment 64 at the time of the sales in 2016 and 2017, a customer was only allowed to buy one ounce of marijuana at a time (two ounces for medical patients). The company and its legal representatives argued that the limit applied per transaction and not per day, but a statement by the state Marijuana Enforcement Division in May 2017 informed marijuana licensees that selling more than one ounce to a customer on the same day was illegal, and that was reiterated to Sweet Leaf in an MED email in August 2017, according to Denver city attorneys. Like Fasing, Kilroy felt Sweet Leaf was undermining the regulatory framework.
“Enforcing rules when violations occur is an essential part of Denver’s successful regulation of one of the largest legalized marijuana markets in the world. After reviewing the overwhelming evidence, it’s clear the Hearing Officer made the correct decision in recommending the revocation of these licenses," Kilroy says in a statement. "Sweet Leaf’s illegal actions undermine the entire regulatory framework created by Amendment 64, the General Assembly and Denver City Council. This decision supports the will of the voters for a regulated legal marijuana market, safeguards the legal marijuana industry, and protects the safety and welfare of the public.”
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During disciplinary hearings in April and March, city attorneys presented hours of video footage that included employee interviews and undercover purchases from Sweet Leaf stores by DPD officers. Evidence presented indicated that ownership and management encouraged employees to make multiple sales to the same customers under the belief that it was technically legal before January 1.
Customers arrested by the DPD subsequently reported purchasing numerous pounds of marijuana in a day during police interviews. According to MED figures cited by city attorney Emela Jankovic during the hearing, there were over 1,000 instances of medical marijuana looping totaling nearly $4 million at one Sweet Leaf dispensary during a stretch from 2016 to 2017, and one company district manager believed loopers accounted for 30 to 50 percent of overall sales for the company.
Sweet Leaf and its legal representatives did not respond to requests for comment. To appeal Kilroy's decision, the company would have to take its case to Denver District Court.
Although the company itself is having hard luck in Denver, the majority of the arrested budtenders have had their charges dropped. There are still three dispensaries open under the Sweet Leaf brand in Colorado, with its Aurora and Federal Heights locations reopening shortly after the December raids, and a new store opening in Thornton in April.