The news was everywhere Nov. 21. Headlines blared that the Drug Enforcement Administration, the Internal Revenue Service and local law-enforcement agents, some in masks, were very publicly executing search warrants on dispensaries and grows and busting up cannabis operations in Denver, Commerce City and Boulder County. TV cameras focused on broken storefront windows and plants and records being taken out of buildings and hauled off in trucks. On a day when the area got its first real snow, some of the shots made the heisted plants look like holiday trees ready to be picked over at the local King Soopers.
And all this just short of six weeks ahead of the time when the state will begin selling retail cannabis to adults. WTF? Is the Department of Justice going back on its word to not interfere with Colorado sales? Is it sending a message as the state prepares to sell a product commercially that is legal under state laws and illegal under federal laws?
On Aug. 29 the United States Justice Department released a memo that indicated the federal government wouldn’t interfere with state regulation of cannabis as long as businesses abided by a list of rules that included pretty obvious criminal activities: distribution of cannabis to minors; the use of firearms or violence; growing on public lands and federal property; being involved in criminal enterprises; preventing the diversion of cannabis to other states where it’s illegal; and the trafficking of other illegal drugs.
From what we have found out since then — and I’m writing this on the morning of Nov. 25 — it appears that the raids were focused on certain individuals whom the Justice Department suspects broke one or more of the guidelines.
I am skeptical of the government when it comes to cannabis, but the release issued by Jeff Dorschner, spokesman for the U.S. Attorney’s office, couldn’t have been more clear. “Although we cannot at this time discuss the substance of this pending investigation … there are strong indications that more than one of the eight federal prosecution priorities identified in the Department of Justice’s August guidance memo are potentially implicated.”
Local news organizations filled in some details. The Denver Post reported that the Department of Justice was looking into possible connections to Columbian drug gangs and that a couple of homes, including one in Englewood “a mile from the home of Peyton Manning,” had also been raided.
At the home, agents found weapons and ammunition and arrested and charged Hector Diaz with a single count of possessing a firearm while in the U.S. under a non-immigration visa. A hearing was scheduled for Nov. 27. The investigation seems aimed at individuals connected to the VIP Cannabis dispensary in Denver. In the court filing is a photo of Diaz wearing a DEA cap and holding what appears to be two semi-automatic rifles and handguns in his belt.
Among those named as persons of interest were Laszlo Bagi, whose grow operation at the Beech Aircraft plant north of Boulder and another in Commerce City were among those visited. The Daily Camera reported that Bagi had been involved in civil suits regarding dispensaries in the past.
Right now it’s unknown exactly how many businesses were targeted, but it appears to be less than a dozen, which would represent less than 1 percent of the more than 1,300 cannabis businesses in Colorado’s medical industry. And it’s important to note that at this point, though people are under investigation, no one has been accused of anything nor charged with a crime.
With that many businesses, to imagine that each and every one would be operating totally legally would be naive in almost any industry, let alone this one. Given that a recent audit of the state’s governance of medical marijuana pointed out lax execution and enforcement, the fact that medical businesses have no access to the banking system and that cannabis remains illegal under federal law, there are still incentives for criminal enterprises to become involved. And it’s certainly not much of a stretch to understand that some Colorado cannabis entrepreneurs, knowing how much more it might fetch in say, Florida, might be involved in distributing it in other locales.
It’s likely that innocent employees lost their jobs. Grow facilities are legal in Colorado, but when federal agents encounter cannabis plants, they are obliged to destroy evidence. The facility at the old Beech Aircraft site, which apparently contained several medical grow operations, was raided and all plants destroyed under federal guidelines. If the warrants were intended only for one business, it’s not likely the others will be compensated for their loss.
If there are those working outside the law, this would suggest that the system is working the way it is supposed to, say people in the industry with whom I spoke. Honest entrepreneurs want proper state regulations and enforcement that works, and for the federal government to be comfortable with those rules.
While headlines like these likely will be interpreted and spun by those who oppose Amendment 64 as evidence of an industry out of control, I’m more inclined to see events like these as necessary corrections indicative of the growing pains of an uncertain industry set to change our state in ways we don’t quite understand yet.
It could be a sign of the system working, and wouldn’t that be a kick?
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